Just 2 months ago after visiting Dubai for the first time I wrote about the Dubai Bubble and today it seems that this bubble has burst with one knock on effect being the FTSE 100 index suffering it’s biggest one day fall since March.
Clearly not everything was ok when I visited back in September but the failure of a government owned company, Dubai World, to meet a debt repayment will naturally lead to concerns about whether the remaining $59bn debt will be repaid. To put this in perspective it is the equivalent of the NHS in the UK not meeting a $3.5bn payment.
There is little definitive evidence yet of how much of the outstanding $59bn debt is owed to UK banks, but the big drops in their share prices suggest they are heavily exposed. Now I am not a genius and I am certainly not paid a million pound salary, but I was able to indentify the problems out there in just a few days so the banks really deserve what they have coming to them this time.