Dubai Debt Causes Stock To Tumble Around The World…

The AP is reporting that as world markets absorbed the shock of Dubai’s debt crisis, the ruler of the once-booming city-state left town for an important meeting in a desert palace. His hosts: the leaders of neighboring Abu Dhabi whose balance sheets are flush with oil revenue.

It’s not known what promises were made inside the halls in Al Ain during the parade of visitors for an important Islamic feast day on Friday. But their new relationship is clear. Abu Dhabi has the cash and cache to be Dubai’s white knight — in a Gulf version of a too-big-to-fail bailout or to help calm markets with promises to intervene if Dubai’s fiscal mess deepens.

Asian markets have followed Europe in a slide amid fears about Dubai’s massive debt, which have also driven the U.S. dollar lower. South Korea’s KOSPI lost 4.7 percent and Hong Kong’s Hang Seng dropped 4.8 percent.

Investors are worried that a default by a government investment company in Dubai over $60 billion in debt payments could have a ripple effect in world financial markets. The fear is that losses in the small emirate, which has drawn wealthy tourists from around the globe in the past decade with its Las Vegas-in-the-Middle East appeal, could imperil a nascent economic rebound…CBS news reports.

http://www.cbsnews.com/stories/2009/11/27/business/main5799521.shtml

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Christopher Davidson, an expert in Emirate affairs at Britain’s Durham University, wondered if Abu Dhabi wanted to become too deeply involved in lifting Dubai from its fiscal wreckage.

“There is no point throwing good money into Dubai’s black holes,” Davidson said. “These are mistakes of Sheik Mohammed and he needs to deal with them.”

I guess that what goes up, must sometimes come down.I hope for better days in Dubai….

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http://www.google.com/hostednews/ap/article/ALeqM5jgIwsGJtixo-F6a2j5e8hebIbaEwD9C8JAB00