Dubai Risks Major Emerging Market Default
Tags: Financial Crisis.
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The trigger for the next collapse is out there – I thought it would be the Chinese or US bubbles making it all come crashing down, but it could end up being this Dubai mess:
Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.
“One cannot rule out — as a tail risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.
A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis, they wrote.
Of course the real problem is that there hasn’t been any recovery at all, anywhere. What the bankers and bureaucrats have been calling “recovery” has actually just been smoke and mirrors as central banks have printed money and used it to prop up stock prices and other asset bubbles. This sort of thing is only sustainable if a lot of wealth is being created to back up the government paper – but that isn’t happening.
We’ve moved a lot of money around, we’ve allowed some very rich people to cover their positions so that no matter what happens, they’ll end up rich. That’s all, folks. Just wait, now, for the crash. Maybe we’ll dodge the bullet right now, but we’re eventually going to have to go through the second half of this crash – delayed and made worse by efforts to stop it.
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7 Responses to “Dubai Risks Major Emerging Market Default”
Caucus of Corruption
I hope and pray that the next crash does not hurt our economy as bad as it could. If the ideas of more taxes and government controls on the economy come to fruition, we are in deep, deep trouble.
This economy ain’t gonna get better because of the Earbama policies; he doesn’t want it to get better. The economy has to get better despite of what this idiot is trying to do.
He and his band of thieves need to go–in 2010 and 2012…
markfault:
are you doing a orbital 180 on us?
i thought you said that $700bb that your man doled out last year
was a good thing?
or was it the start of a bad thing?
cosmically confused….
please help
alien, it’s a matter of GIGO. Given the information handed out at the time, it was much easier to think that the TARP idea was a necessary evil. But as more information comes out, and as more failures of bailouts are seen, the shortcomings of such an approach are more and more evident.
markbail:
that gigo excuse is a cosmic crock
so much was swept under the rug
ex: they knew the dubai bye bye was coming eventually
so you’re saying they withheld info
or just didn’t know
or it’s not good now because of what we know now
or life must be lived forward but can only be understood backwards?
you’re killing me……
funny
Bagni,
Not really – from January 26th:
markout:
your getting sketchy on your ’splanations
however
i astrally agree on no mo’ bailouts
if you remember correctly
i posted up on the first bailout way back
said they shouldn’t do it
and if they did
take $700bb divide it by 100mm voters
and send checks that way
think of it…..black friday would have been so much better
and much more plastic in landfill
think of the jobs…..
8-))