Another "black Friday" Ahead?

[vertigo4u]

are we at the Brink of a new financial Crises?

Fears of a potential default in Dubai sent shock waves through financial markets Thursday, weighing on European and Asian equities, lifting government bond prices and pulling the U.S. dollar off of recent lows as investors sought out safe havens.

Dubai late Wednesday said it would restructure Dubai World and announced a six-month "standstill" on repayments of the state-run wide-ranging conglomerate's debt. Ports operator DP World and its debt is excluded from the standstill plan. Read about Dubai World's sprawling empire.

Analysts said Dubai's woes were a blow to sentiment, serving as a reminder that potential trouble spots remain in the world economy.

"I don't see this as a massive issue but it's another warning to where the world got itself last year with loose monetary conditions [and] loose lending," said Naeem Wahid, market strategist at Lloyds TSB. "And, in a few cases, the problems are still out there and we could continue to see these kinds of nasty surprises" in the future.

Government-owned Dubai World is a conglomerate with interests in real estate, ports and the leisure industry. The firm carries around $60 billion in liabilities. Credit agencies Moody's Investors Service and Standard & Poor's downgraded the debt of a range of government-related firms, including DP World, after the restructuring announcement, news reports said.

The developments sent the cost of insuring the emirate's sovereign debt against default soaring for a second day.

The news also weighed on other emerging markets, boosting the cost of insurance against default against other Middle Eastern and emerging-market countries and undercutting Central and Eastern European currencies.

Asian stocks fell early Thursday. European stocks were under pressure, with the pan-European Dow Jones Stoxx 600 index losing around 3%. Worries about the exposure of British and other European banks to Dubai contributed to the weak tone, analysts said See London Markets.

[Pakboong]

No surprises here.

[lannarebirth]

This should not be shocking news to anyone. People should examine however if they have assigned the correct risk premium to the assets they own as there will undoubtedly be other things like this coming along with unknown consequences.

[neverdie]

So sad, too bad. I'm not sure what stinks more, their defaulting loans or their better than tho attitudes.

[givenall]

If anyone visits Dubai, will see how ridicules how development over there is being managed. High risers in the desert rows and rows and row… I always wondered who will buy these condos. Well I guess I have my answer today. NO ONE

[WinnieTheKhwai]

Careful.. Obvious as it may be, these days this doesn't seem to fall under freedom of expression anymore, and may be deemed 'rumour mongering harmful to the state', even when just quoting another news source!

[neverdie]

^Having spent considerable time over in Dubai I often use to walk the streets and the sites of the place and scratch my head in amazement. 'Where do they get the money for this' I use to think, of cause stupid me, I should of known they just borrowed it. We live in very careless times, its all around us, people, companies, countires, mortgaged to the hilt.

Meanwhile, your responsible average mum and dad investors or people who have worked hard and save will pay for these GREEDY mistakes made by people like these. We've seen it time and time again throughout this finanical crisis, money lent hand over fist, rediculous amounts without a hint of responsibility anywhere in sight. Already Bank share prices around the world are dropping significantly, as everyone in the industry ducks and weaves to check out their balance sheets and see where they've pharked up again.

[bonobo]

Certainly interesting, but also not Thai-related.

//CLOSED//