Posted on 11/27/2009 3:24:50 PM PST by FromLori
Watch out. This may be just the beginning. In the scale of things, the debt problems of Dubai are little more than a flea bite. Dubai’s sovereign debts total “just” $80bn, which counts for nothing against the trillions being raised by advanced economies to plug fiscal deficits.
Dubai has been a one-way ticket of economic expansion until recently
Small wonder, though, that this minor tremor has sent such shock waves around the wider capital markets. The fear is that threatened default in this tiny desert kingdom is just a harginger of things to come for government debt markets as a whole. According to new estimates by Moody’s, the credit rating agency, the total stock of sovereign debt worldwide will have risen by nearly 50 per cent between 2007 and 2010 to $15.3 trillion. The great bulk of this increase comes not from irrelevant little states like Dubai, but from the big advanced economies – America, Europe, and Japan.
Perversely, they are for the time being beneficiaries of the “flight to safety” that trouble in Dubai has sparked. Government bond yields in the major advanced economies have fallen
(Excerpt) Read more at blogs.telegraph.co.uk ...
ping and related
Just have a squint at the planning that went into this one. Here’s the latest from Sheikh Ahmed bin Saeed Al-Maktoum. “Our intervention in Dubai World was carefully planned and reflects its specific financial position,” declared the chairman of the grandly titled Supreme Fiscal Committee. “The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react.”
Sadly, the Sheikh did not spell out all the careful planning that went on. First, work out when the 10-day Eid religious festival falls this year. Then, just before you close the markets for the duration, slip out a request from a state-backed company reeling under $60bn (£36.4bn) of loans for a six-month debt standstill. Getting the whole farrago to coincide with America’s Thanksgiving holiday was, it must be said, genius.
Dubai is the first cockroach.
In the Cockroach Theory of Markets, once you see that first cockroach you can bet there is going to be plenty more showing up real soon.
I’s like to slap around that old Chinese guy who said “may you live in interesting times”
this can’t be good for Citi.
When did people stop remembering they were commies?
By the way this is good
http://johngaltfla.com/blog3/2009/11/27/something-wicked-this-way-comes-again-thank-you-banksters/
Citi screw them we the taxpayers own the largest share of citi!
http://nlpc.org/stories/2009/09/27/taxpayer-owned-citigroup-still-bankrolling-acorn
Ah yes, CMT (Cockroach Market Theory). EMH (Efficient Markets Hypothesis), move over!
We read Galt frequently. Doesn’t do much for a good nights sleep :)
I know but it is good reading more realistic then what they are telling people.
http://johngaltfla.com/blog3/2009/11/27/something-wicked-this-way-comes-again-thank-you-banksters/
I hope this bring more and more countries down. Its time to end the pyramid of debt.
We’ll find out what Tiger has in Dubai, Won’t we.
True that...we have been following him since the summer on frugal squirrels and tree of liberty.
this “event” could, in this day and age, be blown into something cataclysmic, but I don’t think there’s any good reason for it to be.
Reading other articles, too, it seems like “Dubai” had “Don’t buy” written all over it. NO NATURAL RESOURCES.
parsy, who thought they had oil
Yes. Dubai was big on fornicating with traitorous Europeans and related business—tourism, real estate, shipping and the like. It was one of those places for Lawrence of Arabia wanna-bes. ...didn’t have much to do with real Americans, and the max possible $60 billion is hardly a visible flash in the pan in the big picture of the world. ...mountains...molehills.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.