With the Dubai news… Interesting this happens on Black Friday when the news channels are covering the people who are schmucks at Best Buy vs Dubai and the international markets shooting down. Schmucks at Best Buy cause all their deals were online on Thursday with an additional 10% off!!! Walmart had an additional 15% off!
Does the Dubai news surprise anyone? I’m not expecting a major downdraft.
So does this mean more job losses? Dubai World itself employs more than 70,000 people and if the Real Estate market once again comes to a stand-still with halted projects and evaporating deal-flow, the whole sector will be crippled. @JustPass, You seem to have known/anticipated the Dubai news much earlier. You think we are going to see more defaults from similar entities?
JustPass Wrote: ------------------------------------------------------- > Does the Dubai news surprise anyone? I’m not > expecting a major downdraft. Not surpised as I thought there were more hidden bodies in the system hence went to cash a month or two ago to see if the crisis really had passed at the expense of gains. Unlike you, I am expecting a major downdraft if there is another SWF or indeed a country that comes under renewed pressure. It seems the market could even force this as CDS have jumped again and it could impose technical constraints on borrowers. In fact it could extend to corporates and that extends way beyond the size of Dubai World. Dubai World represents risky assets and risk taking period. It is not about a sector or a company. It is about risk taking and trust in the markets. The horns are gonna pull in and that doesn’t look good for any other market. What is the backstop - more government fiscal stimulus? Obviously not a lot more there. Where is the good news?
SPX futures market at 1079 which is a fall of less than 3%. European markets aare down almost 3.5% since the news so that’s a relatively positive result.
The counter to my above post is obviously the carry trade but the doomsayers (Mobius/Roubini) echo roughly what I said. See link below. I guess markets will always be driven by short term needs. Markets will rally or fall depending if investors are more concerned the return on capital (search for yield/risky assets) vs the return of capital (treasuries/risk free…ish) http://www.bloomberg.com/apps/news?pid=20601087&sid=a7OTyMgSJ9mA&pos=3
I’m relatively confident that the UAE will not let Dubai default…
I hope it really tanks, specially in Brazil, then I 'll play the options game!
Nah, I’m pretty sure that we don’t want a country to default on debt during this stage of the economic recovery.
Non-event.
sandstorm in a teacup
brazilatz Wrote: ------------------------------------------------------- > I hope it really tanks, specially in Brazil, then > I ‘ll play the options game! What options game? Ta’ sem opcoes?
I was gonna buy call options , Petrobras but I didn’t!