Will Dubai's debt problems affect Kentucky's horse industry?
An already nervous American economy reacted quickly just after Thanksgiving to news from the Middle East that state-owned conglomerate Dubai World had asked creditors for a six-month delay in making debt payments on tens of billions of dollars in real estate investments. Dubai is in the midst of an extraordinary real estate boom such as the world has never seen. In the United States, the Dow Jones Industrial average plunged 155 points on news of the Dubai revelation. Asian markets and those in the UK were also impacted. In Kentucky, some began to wonder if Dubai, sometimes called an "oasis of excess" in the United Arab Emirates, was in trouble.
So why should Kentucky care about Dubai World's economic woes? Dubai's ruler happens to be Sheik Mohammed bin Rashid Al-Maktoum, one of the biggest figures in international Thoroughbred racing and breeding, with hundreds of Thoroughbreds purchased in the Bluegrass State.
"I haven't seen any impact so far," said Bob Beck, chief equine attorney for the Lexington law firm of Stites & Harbison, who also chairs the Kentucky Horse Racing Commission.
"My understanding is that his investments in the horse business are really a personal investment and not related to the financial status of Dubai," Beck continued. "Apparently, he has pretty deep pockets. I'm not sure problems in the real estate industry in Dubai will adversely impact him to where he will change his participation in the horse industry."
If true, that would be a huge relief for Kentucky where the sheik, his family and various associates have poured millions of dollars into horse sales, even in tough economic times. In addition to farms and stables he owns in foreign countries, the sheik purchased Jonabell Farm in Lexington in 2001. But some are asking if the mounting debt situation in Dubai could spread to global credit or commercial real estate markets. If it does, would the sheik pull back some of his investments, including those involving his equine operations?
Some Kentucky equine observers noted that neither the sheik nor his representatives bought horses at the recently completed Keeneland sale. But that fact has apparently created no alarm at the track offices.
"We didn't read too much into that," said Jay Blanton, director of communications and marketing at Keeneland. Blanton added that every indication he and other Keeneland officials have is that "nothing will change with respect to the sheik and his involvement with the horse industry, and that's a good thing."
"The sheik and his family and associates are passionate about the horse industry and are important players and we have every expectation that nothing about that will change," said Blanton.
Beck is also not alarmed by the nonparticipation of the sheik in recent sales, saying it probably had nothing to do with the economic situation in Dubai.
"They have been buying a lot of brood mares and stallions over the last couple of years and are concentrating on breeding them to produce their own winning race horses," Beck explained. "There's no public indication that there was any connection."
The sheik has made only a couple of public comments about Dubai World's debt problems. In October, he accused the media of exaggerating the situation and said market reaction around the world showed a "lack of understanding of what is going on in Dubai," according to a report on the online Huffington Post. Questioned by a reporter about Dubai's debt load, the sheik reportedly said, "I assure you we are all right. We are not worried." But more recently at a meeting of international investors, the sheik had two words for media inquisitors: "Shut up."
Beck speculates that if there is a financial problem involving Sheik Mohammed, Kentucky might begin to notice it late in 2010.
"When you might see it would be at the yearling sales next September," said Beck. "Between now and then, the only other sale of breeding stock is the January sale, and I don't think Sheik Mohammed has been a big participant in that. That involves lower-level blood stock. In the spring, you've got the two-year-olds-in-training sale, but again, he seems more active in the yearling and brood mare markets. I think it may be next September before we can reach any conclusion."
Sheik Mohammed has been the leading horseman in the world over the last decade. He hosts the Dubai World Cup, the world's richest series of horse races. If he did not participate in sales in 2010 or began to sell some of his assets, "I do think he could have a significant impact on the (equine) markets here in the U.S. and possibly in England," said Beck. "He's been such a big player."
But Beck also acknowledges that it would be personally heartbreaking for the sheik to scale back his love of horses.
"The horse business seems to be a passion with him," he said. "I think keeping the operation at its current level or expanding it would be a high priority for them." - Dan Dickson
Airline offers golden word for times: "cheap"
Allegiant Air, the latest airline to try a low-cost fare approach (remember People Express?) is opening a new base at Orlando International Airport (MCO) on February 1, 2010. Allegiant will initially serve 10 U.S. cities, including Lexington. The airline will offer an introductory one-way fare as low as $57.99 for flights between Orlando International and Blue Grass Airport.
By March 5, 2010, the leisure-focused carrier will base five, 150-seat, MD-80 series jet aircraft at MCO. The new base is the carrier's eighth scheduled service base, the airline also has scheduled service bases in Las Vegas; Sanford, Fla.; Fort Lauderdale, Fla.; Bellingham, Wash.; Phoenix; Los Angeles and St. Petersburg/Clearwater, Fla. Allegiant currently provides nonstop scheduled service to/from 69 U.S. cities.
Counseling can prevent foreclosure
Foreclosure advice is an unfortunate but critical commodity these days. Homeowners who receive foreclosure counseling are 60 percent more likely to avoid losing their homes than those who do not, according to the findings of the National Foreclosure Mitigation Counseling (NFMC) program. The program was created by Congress to address the nationwide foreclosure crisis.
A recent NFMC report analyzed NFMC program activity during its first year (January 1-December 31, 2008) and found that program clients were more likely to receive a loan modification than homeowners who did not receive counseling, and NFMC program clients who received loan modifications lowered their mortgage payments significantly more than homeowners who received loan modifications without NFMC program counseling.
In Lexington, the Community Ventures Corporation is serving as a grantee of the program and is offering counseling services. Information is available online at nw.org/nfmc or by contacting Keysha Cuyler by e-mail at HYPERLINK "mailto:kcuyler@cvcky.org" kcuyler@cvcky.org or by phone at (859) 231-0054 or 1-800-299-0267.
When the going gets tough, the tough grow (and sell) produce
A silver lining of these tight economic times may be the necessity of becoming innovative and entrepreneurial - of finding a new way to make a living. For those who are in transition or just thinking that there has to be a better way, the 2010 Kentucky Fruit and Vegetable Conference and Trade Show is coming up and will have something of interest for anyone interested in fruit and vegetable production.
This year's event convenes January 4 at Lexington's Embassy Suites Hotel, and concludes around 5 p.m. on January 5.
Highlights will include a pre-conference record-keeping training session; a Midwest Apple Improvement Association session where participants may taste new selections; and sessions on farmers markets, commercial fruit and vegetable production, small fruit production, organic farming and gardening, woody cut stems, the Grape and Wine Short Course, winemaking and marketing; a food safety session detailing good agricultural practices training; and a course on third-party audit preparation. Participants also will have an opportunity to use a Trading Post bulletin board to sell used equipment.
The conference is a joint meeting of the Kentucky State Horticulture Society, the Kentucky Vegetable Growers Association, the Kentucky Farmers Market Association, the Midwest Apple Improvement Association and the Kentucky Grape and Wine Short Course. The conference also includes the inaugural meeting of the Organic Association of Kentucky.
Conference registration is $30. Banquet and luncheon tickets are only available with advanced registration by Dec. 18. The conference is jointly sponsored by the University of Kentucky Cooperative Extension Service, Kentucky State University and the Kentucky Department of Agriculture.
The conference program and registration sheet are available online at www.uky.edu/Ag/Horticulture/conference2010reg.pdf.
Doug High returns to local television news
Television news and production veteran Doug High has moved into the weekend news anchor's chair at WTVQ, Lexington's ABC affiliate. High has more than 15 years of experience anchoring, reporting, hosting and producing news and magazine program broadcasts. Doug has worked in several television markets including Toledo and Mansfield, Ohio, and Denison, Texas, as well as Lexington. Additionally, he has hosted a variety of television programs with organizations such as Business Lexington, Insight Cable, Ohio's PBS network and KET.
He also currently produces documentaries for KET.
The station's weekend newscast schedule now reverts back to its pre-football season lineup with programs at 6:30 p.m., 10 p.m. and 11 p.m. on Saturday and Sunday nights.