Friday, November 27, 2009

Hey banking titanic, major iceberg ahead

Let's all put our money on an artificial island off the coast of a desert country. See how that works for out banking system.

Dubai Crisis May End in ‘Major’ Default, BofA Says
Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.

“One cannot rule out -- as a tail risk -- a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.

Wife says: 'well, shit happens'.
Dubai debt crisis: Now British banks face fresh crisis after investing billions
* Barclays, RBS and HSBC face losing billions
* Wall Street plummets by 2 per cent after late opening
* FTSE falls by 1.5 per cent before stabilising
* Banks see £14billion wiped off market value in one day
* Dubai may consider selling QE2 to tackle debt

British banks were teetering on the brink of a fresh meltdown today after it emerged they had invested heavily in crisis-hit Dubai.

An $80billion debt default in the emirate has already reawakened the spectre of a global 'double dip' - that the first shoots of recovery could be wiped out by a second wave of recession.

But the level of exposure that the crippled British banking sector faces is now under renewed scrutiny.

The crisis was prompted by Dubai World, the development company behind three palm shaped islands as well as an off-shore replica of the globe , defaulting on its debt.

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Personal note: still recovering from food coma from Thanksgiving feast. Thanks to wife for great home cooking. Turkey should last us for about a year....


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