The Dubai World default is a matter of only $60 billion - mere peanuts when compared to other elements of the global financial crisis. It's thus of concern only to those silly enough to invest in real estate there (and the European banks foolish enough to finance it.) For the rest of us, it is a useful reminder that sudden collapses don't really come out of nowhere - they can be foreseen, and smart investors can plan for them.
You see, I did foresee this one, for Money Morning readers - 16 months ago, before the global banking crash. Back in July 2008, I wrote that Dubai's economy was "more bubble than boom," that it had "a construction bubble worse than the Florida market and a monetary policy looser than Ben Bernanke's" and that "its return to earth will be painful and probably not long delayed."
Is Government Debt the Next Crisis to Strike?
While American investors were busy enjoying their Thanksgiving dinners, global markets were shaken by word that Dubai asked for a payment holiday on the $59 billion it owes via its investment vehicle, Dubai World. The move, which comes as oversized bets on Persian Gulf real estate sour, was considered a default by the major rating [...]
Removal of Stimulus Packages Next Year Poses Bubble, Credit Risks Says World Bank’s Zoellick
The global economy must be wary of bubble and credit risks in 2010 as central banks around the world begin removing stimulus, warned World Bank President Robert Zoellick yesterday (Wednesday).
Speaking to the press at the Singapore Foreign Correspondents Association, Zoellick said policymakers must be vigilant in preventing asset bubbles and that the private sector is needed to stoke demand.
"And so when that stimulus money has run its course, then the question will be, will the private sector rebuild demand?" he said.[mm_legacy_signup_code]Part of the problem going forward for East Asian economies is policymakers typically follow the U.S. Federal Reserve. However, nations choosing to do this may face challenges because the recovery won’t be symmetrical.
Investment News Briefs
Dodd Introduces Financial Overhaul Bill; Ex-Bear Stearns Managers Innocent of Fraud; Job Openings Still Scarce; AMEX: Credit Card Spending Up in Oct.; EU Objects to Oracle; Oil Falls As Hurricane Ida is Downgraded; Apple Cell Phone Profits Pass Nokia's; JPMorgan to Hire 1,200 Mortgage Salespeople
Where to Find Big Profits in a Post-Crash World
[Editor's Note: The essay that follows was adapted from "Fiscal Hangover," a brand-new global investing book written by Money Morning's Keith Fitz-Gerald. For more information - including details on how to get a $10 discount off of the cover price - please click here.] As I write this, everyone from Wall Street to Main Street [...]
A Year After the Crisis, the Global Economy is Firing on All Cylinders
What a difference 12 months can make.
Just one year after every national economy on earth was in deep trouble, a powerful global rebound is underway. In fact, the global upswing is a lot stronger than most investors realize.
So don't let a few days' decline here and there cause you to lose sight of one of the most important investing trends investors will find today.
Here's Why the U.S.-China Tire Tiff Could Lead to Great Depression II
When U.S. President Barack Obama late Friday (Sept. 11) signed an order that imposed an additional duty of 35% on tires imported from China, it set up the potential for an old-fashioned trade war. Currently, global trade is down only 20%. During normal times, worldwide commerce would recover on its own. But as most investors [...]
Buy, Sell or Hold: The SPDR Gold Trust ETF (NYSE: GLD) Continues to Offer Investors a Hedge Against Inflation
The just-concluded Group 20 (G20) meeting left us with a chorus of very "prudent" governments and central bankers singing the praises of easy monetary and fiscal conditions. So where can we take refuge when all the central banks in the world print money and governments run deficits in order to spend like drunken sailors? The [...]
Three Ways to Profit As Taiwan Rebounds From the Financial Crisis
By Martin HutchinsonContributing EditorMoney Morning As you scour the globe for potential post-financial-crisis profit plays, don't overlook Taiwan. Stock markets around the world have already started to rebound with joy as investors begin to believe that that the unpleasant global recession is finally nearing its bottom. Unfortunately, there's one sobering conclusion many investors have so [...]
As Financial Scams Go Global, Here’s How to Avoid Being Stung
[This is the sixth installment of a new series that is exploring ways for investors to recover from the U.S. financial crisis.]
Bernie Madoff's guilty plea to a decades-long $50 billion-plus Ponzi scheme pretty much guarantees the 70-year-old will have his likeness immortalized on the Mt. Rushmore of scammers.
The former NASDAQ chairman's December arrest - with collapsing U.S. and overseas stock markets as a backdrop - kicked up a firestorm that has forced investors to take a much-closer look at who was managing their investments. Scores of investors have lost their life savings, retirees found their nest eggs gone and countless charities discovered that they were essentially out of business; the cash that they once handed out to worthy causes had disappeared.