Dubai debt problem is; is it a wiggle or is it a wobble?
The UK's FTSE 100 index lost 3.2%, its biggest one-day fall since March, after Dubai World asked creditors to postpone upcoming repayments until May 2010. This, the latest hiccup or should I say burp, belching a forceful expulsion of something, from inside the belly of the rotting beast and, a cruelly rapacious savage at that.
Oh, what kiddingly can the capitalist system do, after all the hype in the media about how things are on the mend, that things are getting better, fed like sprats to hungry sea lions. "Certainly the Dubai debt debacle and the uncertainty that it has created has had a severe knock on effect," said David Buik at BGC Partners, is surely, definitely and most positively an understatement?
Fears linger that Britain's beleagured banks, which are the biggest lenders to the Emirates, are over-exposed and face a further knock to their finances.Barclays was the biggest faller, down 8%, followed by Royal Bank of Scotland, which lost 7.8%.
French and German shares also declined, with France's Cac index ending down 3.2%, and Germany's Dax losing 3.4%.
For months the capitalist press have been propagandising to workers that a bright light shines in the not to far off dissidence, they said look at Germany, look at France, economies on the mend. Well the truth is that the system of capitalism is in free fall and has no control as its temple built on sand crumbles.
“The property market has crashed... Many people [got] involved and many people left overnight. If you go to the airport you'll see many abandoned cars.” Those telling words of a local Dubai businessman.
Meanwhile over at the CBI they said the recession had become the catalyst for a new era in business.
A study by the employers' group identifies four key areas of UK business where new ways of working could develop because of the downturn.
They include more flexible workforces, greater collaborations among businesses and wider financing options.
"The Shape of Business - The Next 10 Years" is being launched ahead of the CBI annual conference in London later.
Dubai may not be alone in its predicament. There is nervousness about the prospects for Greece's bonds and the ratings agencies now deem the country a greater credit risk than Colombia or Panama. But economic forecasting isn't an exact science. Britain's deficit, most recently forecast by the government to hit £175 billion this year, is now estimated to be growing at a hefty £3 billion a week, making that £175 billion figure look very optimistic.
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