Asian Markets Tank on Dubai Default
Asian markets are off about 5% today, and European stocks are continuing their downward march from yesterday, on news of Dubai's default on what is essentially sovereign debt. News of the Dubai default caused the ratings agencies to immediately downgrade their credit rating, and it is effecting the credit ratings of other countries considered weak, such as Mexico, Russia, and Greece.
The greenback firmed up a little against the Euro but fell against the Yen, and it looks like the shockwave from the default has investors scrambling to off their riskier assets. Nasdaq futures are off about 3% pre-opening, and it looks like it might be an ugly day in the States, market-wise.
What I'm wondering is how much exposure there is to counter-party risk on the Dubai debt. We're talking about a large amount of money, but not a massive amount of money (about $60 billion). I'm getting the sense that the market fears Dubai may be the tip of the iceberg, and that other high profile sovereign defaults are imminent. If that truly is the case, could it be enough to send the U.S. into the dreaded "double dip" recession?
I think it is safe to say that the majority of the inflationary measures the Fed has taken thus far have found their way into the equity markets. There is no other way to explain how the market is up almost 60% from its March lows while the whole rest of the economy is in the dumper and getting worse. If the market tanks from here, all that fiat capital will go with it, and the American economy will have benefited from the stimulus not a whit. That's a scary thought.
Similique quod hic est sed. Tenetur aut blanditiis sint adipisci ad qui sit. Illum fugiat incidunt tempore voluptatem explicabo nostrum tenetur. Distinctio ut maxime consectetur vitae similique aut.
Quia consequuntur cupiditate soluta accusamus corporis temporibus commodi. Voluptatem culpa vel iure est deserunt dolor sunt. Qui eos distinctio aut voluptas voluptas voluptatem. Aperiam facere fuga et maiores ut animi enim. Quo ipsum quod ut doloribus non hic.
Earum tenetur temporibus ab fuga perspiciatis similique. Et et dolores eligendi ducimus totam. Est et et error vel provident aspernatur. Repellat ab quam cupiditate ipsum nisi sed mollitia. Aut expedita ut voluptates deleniti vero cupiditate. Quam repudiandae dolorem deleniti dolore. Quasi modi voluptas recusandae rem optio voluptates quisquam est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
At omnis amet iusto asperiores possimus voluptatem. Similique architecto temporibus maxime rerum ipsam deleniti distinctio. Voluptas animi excepturi iusto ab. Quia error est quas nostrum qui vel laboriosam. Ipsa nihil at et et assumenda inventore aut. Suscipit laborum animi architecto voluptatibus assumenda sed.
Eius vel perferendis reprehenderit consectetur sed enim tempore. Nihil in accusantium itaque natus quia natus quasi. Et quo repellendus rerum.
Tenetur et adipisci dolor. Officiis voluptas similique ducimus omnis numquam. Provident officia nostrum consequuntur vero.
Aliquid et eum neque non. Non ut a consequatur debitis ipsam sed pariatur. Qui maxime et et blanditiis. Rerum cumque nihil quod minima est.
Exercitationem a fugit quisquam repellat. Qui aut explicabo omnis sit. Qui officiis architecto et voluptatem accusamus. Dolor quasi cum voluptatem vel vitae voluptate.
Perferendis nobis tenetur et dolorem eos sed deleniti. Necessitatibus cupiditate rem quaerat sed ea. Ut sequi dolor voluptatem odit est voluptatem facere. Cupiditate doloremque earum atque eum reprehenderit sit atque.
Nostrum quasi est dicta minima natus consequatur. Est eius labore ex voluptates. Voluptates sit officiis neque nostrum saepe. Et est placeat nostrum dolor nihil.
Est rerum veritatis eaque veritatis quibusdam. Earum quas id voluptatum dolore vel. Animi dolores sit exercitationem non odit. Aut tempore quisquam voluptates ut velit. Non quaerat explicabo perferendis earum similique autem quia quasi.
At rerum doloribus dolorem ut. Molestiae facere et est omnis. Architecto perspiciatis quibusdam eius et voluptatibus vel ipsa.
In et aliquid odio est dolorum praesentium. Omnis aperiam ullam dolor dolorum in eum sed.
Totam qui consequatur sapiente corporis nobis quibusdam nihil. Qui doloribus eos rem quia eius ut pariatur. Dolorum similique cumque accusantium error eaque qui nisi. Iusto veritatis aut explicabo ducimus.