Futures Slammed as Dubai Debts Weigh on World Markets and Dollar

By on November 27, 2009

The country of Dubai rattled world markets today as its mad spending spree has led to a major debt scare. Dubai, with debts thought to be $60 billion, has asked to postpone repayments until May. That stoked fears of a potential default and contagion around the global financial system, particularly in banks and emerging markets.

SMA Comment: By itself, Dubai is small potatos on the world scene. However, their potential default is just another sign of the times. Multiply Dubai by 100 which you could easily do with all the underwater homeowners and failed commercial real estate projects worldwide, and you have a situation that could potentially snowball out of control again.

Sources:

Yahoo Finance

Bloomberg Futures
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