Is Dubai Default the Canary in the Coal Mine?
Is Dubai Default the Canary in the Coal Mine? Tuesday December 1, 2009 The Dow recovered over 100 points today as the city-state of Dubai announced only $25 billion, not $60 billion, in debt would need to be restructured. On November 25, Dubai World, the business owned by the Dubai government, announced a six-month moratorium on interest payments, which triggered fears of a default. The Dubai government said it would not guarantee the debt, sending world markets into panic. However, four concerns remain, all of which increase uncertainty and therefore costs of doing business. • Most investors assumed Dubai World was backed by its owner, the government of Dubai. They also assumed Dubai was backed by its country, the United Arab Emirates, or U.A.E., which is governed b