[Technical-Investor] Dubai Default

 

Good Morning Working Drones -

Today's news carries a series of unexpected and surprising headlines when the Dubai Government announced that Dubai World will ask creditors for a standstill agreement to extend the maturities of all debt repayments by Dubai World and its property unit Nakheel until May next year.

Now the interesting thing here is that the bets on Dubai's default (using CDS and other wall street toys) weigh in much higher than the actual default.

What is also interesting is....the news was released on a US market holiday. 

This COULD have huge ramifications for the markets 

Equities will react....thats a no brainer...but the USD could strengthen...putting further pressure on global mkts including commodities.

The play book move would be what we saw when Lehman collapsed

- USD strong

- Equities Weak

- Commodities Weak

Somehow i feel, things will be slightly different this time.

I am watching the CDS mkt space for more clues..looks like Greece is next!

Cheers! 

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