xdude wrote:this is insane..the CDS spreads are quoting above tht of Iceland in 2008.. tht means the traders eventually expect dubai to default..
the debt standstill announcement coming after dubai markets close down for holidays makes it even more difficult.. the world would have preffered tht the govt officials announcing it during the day n standing in front of the investors to assure them
I can tell you upfront that the Dubai stock market will experience a selloff when they open again after EID holiday. And this probably won't go unnoticed in other markets too.
Just imagine if nearly $60 billion dollars are at risk with the largest financial institutions in the world, already in mayhem to keep increase their reserve levels. A huge liability and impact on a banks balance sheet. You can bet on that.
Peter Cooper, founder of AME Info just wrote an article on Seeking Alpha that this default (as it is seen in the investment community) will lead to greater risk awareness in emerging market economies and he advices everyone to get out of stock markets altogether (worldwide) as this huge default could have a disastrous ripple effect.
Remember, emerging markets were funded by the big banks in developed economies like Europe, Pacific and the U.S.. And those banks are already in trouble bigtime, hiding most of their losses from the investor community by so called 'Mark-to-Fantasy' accounting standards. Think about the effects of this hit on their balance sheets. This could be another selloff and near collapse of the fractional reserve banking industry.
...holding my breath for a few weeks...