No, that’s not an outrageous slur. It’s a reference to this — the Souk al-Manakh.
This was former camel trading venue was home to the 1982 stock market crash in Kuwait, which wiped out many billions in regional wealth at the time. Older investors in the Gulf will see it as a history lesson for Dubai in how one localised problem can suddenly become much wider and deeper.
The Al-Manakh – or ?????? ,”camel” – was an unofficial stock market that sprang up alongside the regular Kuwait Stock Exchange.
One August day in 1982 a young employee from the Passport Office called Jassim al-Mutawa presented a post-dated cheque to an equity broker which promptly bounced. That set off a chain of events that culminated in the Kuwait Ministry of Finance having to organise a forced clearance of all outstanding trades — revealing the equivalent of $94bn in dud cheques from some 6,000 investors.
You can read the story here and get an idea of the wider implications from this Time magazine article published the following year.
But the point to note is that the severity of the Al-Manakh crash was blamed on the fact that Kuwait had mismanaged a much smaller stock market crash five years earlier. It bailed out all the victims and introduced tougher regulation, which effectively restricted trading to a small group of wealthy families on the main Kuwait exchange.
Other market players were forced onto the Al-Manakh, where they proceeded to run prices so high that at one stage this kerb market was second only to Wall Street and Tokyo in terms of market capitalisation. When the bubble burst, so too did the local banking system and much of the Gulf region was plunged into recession.
Related links:
Kuwait’s Souk al-Manakh Stock Bubble – Stock-Market-Crash.net
Bubbles in the Gulf – FT