“What Dubai is going to do is make people think more intensely about the lagging implications of last year’s crisis. It’s going to be a wake-up call to the people who thought that the financial crisis was just a flesh wound.”
here will be also be “recognition that for the first time in decades, there are sovereign risks among developed Western countries,” said Nouriel Roubini.
SHOOT: In other words, entire countries are now at risk going bankrupt. This is a precursor to global bankruptcy.
“Dubai was particularly flaky in the sense that it seemed to be trying to make something out of nothing,” said Ila Patniak.
SHOOT: Making something out of nothing. Isn't that a good description of credit, of world property markets and the whole project known as suburbia?
On Sunday, the central bank said it set up a “liquidity facility” for the Dubai banks, and tried to reassure investors that the banking system there was more sound and liquid than a year ago.
Whether these moves will restore investor confidence remains to be seen as soon as Monday, when most U.S. traders return from a long holiday weekend.
In recent days, investors have begun worrying that Dubai’s debt troubles might be the first in a series of panics in developing countries that borrowed too much money in the past few years — much as in 1997, when Bangkok became the first capital to crumple in the Asian financial crisis.
Many analysts said their biggest worries were not about whether Dubai would fully repay its lenders, or how much assistance it would receive from its neighbor Abu Dhabi. Rather, these people said, their main concern was what Dubai’s problems said about the rest of the world.
|
clipped from www.nytimes.com
No comments:
Post a Comment