tidbit10 - Dubai crisis jolts markets but early fears ease...

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Dubai crisis jolts markets, but early fears ease Dubai’s debt crisis raised concerns that some banks could further tighten and stall the global recovery. The possible effects caused fears that international banks could suffer big losses if Dubai’s investment defaulted on its $60 billion debt. However, earlier concern that this crisis would trigger other financial debt was put at ease after some analyst downplayed the risks for U.S. banks. Dubai’s trouble caught investors by surprise. Credit agencies responded by slashing debt ratings on Dubai’s state companies, saying that they might consider the plan a default. In recent years, Dubai has expanded with projects like the Gulf’s palm shaped islands and the world’s tallest skyscraper in hope of becoming tourist friendly for the Middle East. In the process, the state backed networks have racked up massive amounts of debt. They are now looking at a bailout from their oil rich neighbor Abu Dhabi. In Europe, stock markets rebounded after Wall Street fell less than feared.
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