Has Dubai's Overblown Bubble Finally Burst? (PHOTOS)

"People were buying anything" my cousin told me over dinner at an empty, but delectable, Lebanese restaurant at The Emirates Mall of Dubai.

"It didn't matter what it was or even if it was worth it. Everyone was buying whatever they could, even if they couldn't afford it," she said.

This was about the fourth time I was having a variation of this very conversation since arriving a week earlier. Dubai, the desert emirate known for its rapid, maybe rabid, economic growth, which sent both prices and prospective purchasers' blood pressures through the roof in recent years may be witnessing what many argued would be the inevitable burst of its ballsy building bubble.

"A few months ago we camped outside the sales office of one of the newest properties," one of the dinner guests reluctantly confessed.

Despite having never seen the property, or even the floor plan, they stood in line, among hundreds of others (many with briefcases packed with cash) hoping to be early enough to score a piece of property.

"We knew if we wanted to have a chance to buy, we had to show up the night before," she sheepishly said. "The line was ridiculous, people slept in their cars, but when the office opened, they told us all the properties had already been sold - it is all corrupt," she said, referring to the shady and often staged real estate transactions made in Dubai.

As I digested the delicious dinner and jaw-dropping details of their story (which I learned ended with the police being summoned after fist fights broke out among potential buyers), I couldn't help but notice the exceptionally cold draft coming from above me.

"So do you think that the air from there (I pointed through the floor-to-ceiling glass windows separating us from Ski Dubai, the indoor ski slopes attached to the mall, equipped with chair lifts, artificial snow and yes, a snowmobile) somehow air conditions the entire mall too," I asked.

Everyone at the table reassured me it was highly unlikely, though we all agreed it would make for great PR. Regardless, there is no way around it, being in Dubai, even during the recession, or perhaps especially during it, is a surreal experience.

A couple months before the economic crisis hit, I decided to accept a job offer with Al Jazeera English in Doha, Qatar. When I told my friends and family, the response was mixed. But after Lehman Brothers filed for bankruptcy and the current financial crisis introduced itself to the world, those skeptical of my upcoming move warmed up to the idea on the general assumption that the oil-rich Middle East might survive "the brunt of the crisis." Since then a few of them have even asked me to "keep my eyes out" for any possible jobs out here for them.

Before me, tens of thousands of Americans and other foreigners have come to the Persian Gulf to accept jobs with packages that guaranteed a tax-free income and unrivaled benefits (including housing, health care, paid school fees and a car) to revel in a region that boasts some of the world's fastest growing economies. But since then, many of those who came, particularly those with jobs in finance or real estate, are out of a job and many swamped in debt.

Foreigners, who make up 90 percent of Dubai's population and were responsible for helping build the emirate from the ground up, are now unemployed and returning to their respective countries.

Despite the credit crisis and widespread deflation, some analysts had held on to the hope that the full effects of the global economic downturn would miss the wealthy Persian Gulf countries. Ironically, in Qatar's case, the massive reserves of Liquid Nitrogen Gas may be enough to save them as they sign deals with neighbors like Kuwait to sell LNG at lucrative prices and are projected to lead GCC countries in terms of economic growth. But here in Dubai, an emirate that was once reported to have one third of the world's cranes busy at work erecting a modern metropolis in the desert, the skyscrapers have stopped, deals have been scrapped and many of the hundreds of thousand expatriates are simply running away.

Stories in local papers, which have since been republished by The New York Times and other Western publications, have suggested that foreigners are fleeing from the financial crisis and their debts. The government has vehemently contested reports that up to 3,000 cars have been abandoned at the airport (with the keys in the ignition and apology letters taped to the dashboards). Instead they suggest the number is closer to a dozen. But the string of half-built towers, deeply discounted car auctions, and relatively empty shopping malls and hotels tell a different story.

The mood around dinner tables, at local school events, and at surprisingly vacant lavish beachfront sports clubs, such as the famous Jumeirah Beach Club, suggests that the crisis has in fact hit Dubai. Not only are some foreigners fleeing in hopes that by hopping on the first outbound flight they will dodge Dubai's strict laws on defaulting on debt, punishable by serious jail time, but also the number of tourists frequenting the once booming emirate have tapered off too.

I won't exaggerate. It isn't a ghost town by any means. But it is nearly impossible to miss the nervous mood that has consumed the emirate recently.

As one cab driver, who came to Dubai 30 years ago to work as a fisherman, told me, "Business is not good like before. Too many people are leaving," he said. "Even when I drive home to Ajman (a neighboring emirate) there is little traffic. Little traffic and little business."

A short stroll from the beach into the main shopping strip near JBR confirmed the difficult realities facing Dubai. In the middle of the day, I walked around the new Saks Fifth Avenue store in the complex for 15 minutes without anyone else in there - it was like I was P.Diddy for a minute - on my own private shopping spree (with prices slashed up to 70%).

The 32-day Dubai Shopping Festival ended last week, and while the numbers have yet to be reported, the budget for this year's festival was slashed by just over 10%. Whether or not the raffling off of luxury cars and deep discounts at many hotels will be enough to change the negative outlook for the emirate has yet to be seen. But it seems inevitable that as fewer people flock to Dubai, especially those who come to escape the cold European winters, the economy, like many others in the world, will continue to struggle.