[cipi604]

Deja-vu!

[TreeFarmer]

IT does make me wonder. If they go under and can't get money from a neighbor, who/what will they take with them? I'm just to afraid that most of modern finance is a house of cards.

TF

[cynthia]

Please summarize the article. When I visited the site, there was a prompt that said the free introductory period was over and the page was clouded and unreadable.
cynthia

[timmac]

In Dubai if one does not pay their debt they go to jail, I wonder if the king will arrest himself and send himself to jail.

NOT..

[IslandCrow]

Try the BBC: http://news.bbc.co.uk/2/hi/business/8380105.stm

$this->bbcode_second_pass_quote('', 'D')ubai's financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts.

Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year.

[Gerben]

$this->bbcode_second_pass_quote('IslandCrow', 'T')he rating agents couldn't see problems in sub-prime, but now they are acting fast.

$this->bbcode_second_pass_quote('', 'O')ur correspondent said: "Standard & Poor's and Moodys immediately downgraded all six state-backed corporations in Dubai, downgrading some to junk status."

[mcgowanjm]

$this->bbcode_second_pass_quote('timmac', 'I')n Dubai if one does not pay their debt they go to jail, I wonder if the king will arrest himself and send himself to jail.

NOT..

[domallele]

$this->bbcode_second_pass_quote('', 'W')hy the Stock Market Futures have sold off heavily.

[Kristjan]

The US markets are closed, but the futures are open. They're at 1084 for the S&P 500 (yesterday's close 1110.63) and 10263 for the Dow 10464).

[Kristjan]

Planned? Gimme a break! Where's your proof?

[dukey]

why don't they just print money
That's what everyone else is doing

[Kristjan]

$this->bbcode_second_pass_quote('GASMON', 'J')ust look around.

[dorlomin]

With this particular mess there is always the added and opaque dimension of the interfamily rivalries between the various Emerites. Whether this is a public play by Dubai to get Abu Dhabi to bail them out or whether money promised has not materialised I do not know.

Dubai over reached itself to make up for a lack of oil or gas. It remains to be seen whether the other Emerites bail it out and use it as a pension fund for the days when the oil goes or whether there jelousy means they wish to stunt the upstart.

[eXpat]

Dubai news are starting to affect the markets:
- CANADA STOCKS-TSX falls as Dubai debt concerns rattle banks
http://www.reuters.com/article/companyNews/idUSN2639564420091126
- Mexico peso knocked off 1-year high by Dubai fears
http://www.reuters.com/article/companyNews/idUSN2640160020091126
-Chile Stocks End 2.2% Lower On Dubai Debt Restructuring News
http://online.wsj.com/article/BT-CO-20091126-706346.html
-Brazil Stocks Accelerate Decline On Dubai News
http://online.wsj.com/article/BT-CO-20091126-705446.html
-Seoul shares seen lower on Dubai worries
http://www.reuters.com/article/financialsSector/idUSSEO34637720091126
-Argentina Stocks, Bonds Tumble On Dubai Aftershocks
http://online.wsj.com/article/BT-CO-20091126-706335.html

[ColossalContrarian]

I think Dubai calling for a debt standstill the day before a closed US market due to a holiday is "planned" in much the same way the FDIC closes banks unannounced on Friday afternoons.

I think it's what any responsible entity would do although labeling a blank entity as "they" is simple to do, "they" would be Dubai. Knowing what the statement would do to the US markets and seeing what this did to other smaller markets makes it rather simple to see that the "plan" was to make the announcement with minimal ripple effects across the entire world economy. Sure the US markets will take a kick to the groin on Friday (I'm not even sure if the US market is open on Friday) but the weekend will hopefully cushion the kick to the groin enough to avoid a complete meltdown.

[Kristjan]

The US market is open on Friday, although the session is shorter (NYSE Early Close - 1:00 ET). You can get this and all announcements of US economic releases here: http://mam.econoday.com/byweek.asp?cust=mam

[eXpat]

Next domino could well be the already damaged UK economy
Leading article: The collapse of an economy that was built on sand
$this->bbcode_second_pass_quote('', '.')..
But this was a project built on the shifting sands of credit. Foreign capital poured into Dubai as its ruler, Sheikh Mohammed Bin Rashid Al Maktoum, set about turning his nation into the financial, tourist and sporting hub of the Gulf. In less than a decade, Dubai managed to accumulate foreign liabilities of $80bn. Some estimates put it still higher.
But last year's financial storm brought that party to an end. Since last autumn, Dubai property prices have fallen by more than half. Hundreds of building projects have been abandoned. Thousands of construction workers and other workers have been laid off. As in many nations that experienced intoxicating booms, the hangover has been especially painful.

And now the spectre of bankruptcy has appeared. Dubai World – a state-owned investment conglomerate which owes investors some $22bn – said this week that it will not be paying back any money to creditors for six months.
...
This would constitute only a "technical" default, but its wider economic knock-on effects should not be underestimated. All of Britain's major banks, from Barclays to the Royal Bank of Scotland, are rumoured to be exposed, to some extent, to Dubai debt. If they are forced to write down loan assets, that could have serious ramifications for our own economy. The weaker the banks, the less inclined they are to lend to domestic businesses.

[Sixstrings]

This may not be bad for the US:

$this->bbcode_second_pass_quote('', 'N')ov. 27 (Bloomberg) -- Treasuries rose, heading for a third weekly gain, after a Dubai proposal to delay debt payments set off a slide in stocks and riskier assets worldwide.

Ten-year Treasury yields were near the lowest level in seven weeks as European stocks dropped the most in seven months.

“The Dubai issue has caused a flight to quality move, which is positive for Treasuries,” said Hiromasa Nakamura, a Tokyo-based senior investor at Mizuho Asset Management Co.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRwT_2dPP8Y0&pos=4