Saturday, December 05, 2009

Watch out for Dubai Debris

By Eric Jackson Senior Contributor

12/3/2009 2:04 PM EST

What a difference a week makes. Last week, as we huddled over turkey and gravy, most of us worried about the contagion effect a Dubai World bond default might hold for similar sovereign and corporate debt and worldwide equities. A quick news release earlier this week saying the amount of debt at risk was less than initially feared and some soothing words from the U.A.E. central bank about providing liquidity was enough to buck up market spirits.

We've had an upbeat week so far. But what lies ahead?

Although we'll know more in the next two weeks about what actually happens with the Dubai World default, it's clear this is a company in need of cash. That could mean a quick sale of easy assets -- no matter what its creditors finally decide.

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