In Wake of Dubai, Trying to Predict the Next Blowup

[marmar]

NY Times via Yahoo!:



In Wake of Dubai, Trying to Predict the Next Blowup
by Graham Bowley and Catherine Rampell

Tuesday, December 1, 2009


Like overstretched American homeowners, governments and companies across the globe are groaning under the weight of debts that, some fear, might never be fully paid back.

As Dubai, that one-time wonderland in the desert, struggles to pay its bills, a troubling question hangs over the financial world: Is this latest financial crisis an isolated event, or a harbinger of still more debt shocks?

For the moment, at least, global investors seem to be taking Dubai's sinking fortunes in their stride. On Monday, the American stock market rose modestly, even as share prices plunged throughout the Persian Gulf.

But the travails of Dubai, a boomtown that, with its palm-shaped islands and indoor ski slope became a potent symbol of hyperwealth, nonetheless have some economists wondering where other debt bombs might be lurking -- and just how dangerous they might turn out to be.

Big banks that have only just begun to recover from the financial shocks of last year are now nervously eyeing their potential exposure to highly indebted corporations and governments. .............(more)

The complete piece is at: http://finance.yahoo.com/real-estate/article/108269/in-wake-of-dubai-trying-to-predict-the-next-blowup

[ixion]

1. Look no further than the US government

which is carrying far more debt than it will ever be able to repay, in my opinion, given that it increases the principle by more than 2 billion a day.

[blindpig]

2. Variable rate mortgages

The sky falls in January.