Tuesday, December 1, 2009

The bankruptcy of the United States is now certain

From Porter Stansberry in the S&A Digest:

It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt - whether subprime borrowers, GM, Fannie, or GE - the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss." What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt it's called "a default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists - Alan Greenspan and Pablo Guidotti - published the secret formula in a 1999 academic paper. That's why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world's largest holder). That's 16,267,000 pounds. At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months - an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So… where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP. Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central bank, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory, which we published last Friday. Coincidentally, the New York Times repeated our warnings - nearly word for word - in its paper today. (They didn't mention Greenspan-Guidotti, however... It's a real secret of international speculators.)

Crux Note: The S&A Digest comes free with a subscription to Porter Stansberry's Investment Advisory. Porter says his latest issue is the most important he's ever written. If you don't act right now to protect yourself from the dollar, he thinks the odds are very high you'll be wiped out over the next 12 months. To learn more, click here.

Shoppers spent less over Black Friday weekend

SAN FRANCISCO/CHICAGO (Reuters) – Consumers spent significantly less per person at the start of the holiday season this weekend, dimming hopes for a retail comeback that would help propel the economy early in 2010.

The lackluster spending could pressure retail stocks on Monday as some investors were looking for a stronger showing compared with a year earlier, when consumers were being hammered by the recession and credit crunch.

"There may be a bit of a pullback, a little disappointment," said Patricia Edwards, chief investment officer at Storehouse Partners.

While shoppers turned out in force as early as U.S. Thanksgiving Day on Thursday, many said they had zeroed in on highly discounted items, would buy only what they needed and would walk out of a store if they did not find a good deal.

"Shoppers proved this weekend that they were willing to open their wallets for a bargain," said National Retail Federation Chief Executive Tracy Mullin in a statement on Sunday. Retail chains "know they have their work cut out for them to keep people coming back through Christmas."

Store chains that may have done better than their peers include discount retailers like Wal-Mart Stores Inc and Target Corp, teen apparel retailers Aeropostale Inc and American Eagle Outfitters and higher-end chains like Saks Inc, analysts said.

A clearer picture of retail performance will be seen when many U.S. retailers report November sales on Thursday.

Consumers said they will have spent nearly 8 percent less on average, or about $343 per person, over the weekend that includes Thanksgiving, Black Friday and runs through Sunday, according to the NRF.

Traffic to stores and websites rose to 195 million people from 172 million in 2008, but shoppers were focused on buying low-priced items, like $10 toys and $9 books, the NRF said.

Total spending for the holiday weekend rose to an estimated $41.2 billion, up 0.5 percent from a year earlier, NRF said. For a graphic on U.S. holiday sales trends, click on http://graphics.thomsonreuters.com/119/US_RTLXMS1109.gif

HOW QUICK A RECOVERY?

Consumer spending makes up roughly 70 percent of the U.S. economy and will help determine how quickly the country can recover from a recession that began in December 2007, said Torsten Slok, an economist at Deutsche Bank.

"The good news this weekend is that consumers are no longer hibernating like they were a year ago, and that in itself is important for the economy," Slok said, referring to the higher traffic.

The NRF has forecast a 1 percent decline in holiday sales this year, which would mark an unprecedented drop for two straight years after a global financial crisis erupted in 2008.

Total retail sales edged up just 0.5 percent to $10.66 billion on Black Friday, which is often the single-busiest day of the holiday season, ShopperTrak said.

Online retailers, however, enjoyed an 11 percent jump in Black Friday spending to $595 million, with Amazon.com and Walmart.com enjoying the biggest surges in traffic, according to comScore.

Retailers had warned investors they would take a conservative view of holiday sales and have cut inventory and reduced expenses to compensate.

"You're clearly down on a two-year run rate," said Bill Taubman of mall operator Taubman Centers Inc. But he added, "margins are going to be extremely good because (retailers) have been careful about what they bought."

DISCOUNTERS ATTRACT

Shoppers interviewed across the country by Reuters over the weekend said they were lured by bargains, but would stick to pared-down budgets.

"If they don't have rebates and sales before Christmas, I don't think people are going to go back shopping after Black Friday," said Joel Wincowski, a higher education consultant shopping at a Best Buy store in Plattsburgh, New York. He bought an Xbox 360 game console for $299.

In fact, 71 percent of consumers who planned to shop over Black Friday weekend said they expect prices to fall further before Christmas, according to a survey for Reuters by America's Research Group.

Discount chains like Walmart, department stores and higher-end chains like Saks Inc seemed to have lured more spending and avoided steep discounts, retail consultants and executives said on Sunday.

"The market has had a negative bias toward the state of consumer spending," said Bill Dreher, senior analyst at Deutsche Bank. "We continue to believe that there are pockets of strength with discount retailing doing very well, with select luxury retailers doing very well, like Nordstrom and Saks, which have brought down their price points."

Specialty apparel chains, however, may face another tough year as they relied on heavy promotions to draw shoppers.

"Going through the mall on Friday, the stores that had not been doing as well -- AnnTaylor, Limited, Gap -- were very aggressively promoting," said Jeff Edelman, director of retail and consumer advisory at RSM McGladrey.

Edelman expects holiday sales to be flat this year, but he said he expected profits for most retailers to be higher.

The NRF said shoppers' destination of choice appeared to be department stores, with nearly half of holiday shoppers visiting at least one. A little more than 43 percent of shoppers said they went to a discount retailer this weekend.

(Additional reporting by Jessica Wohl in Chicago, Emily Kaiser in Washington and Phil Wahba in New York; Editing by Michele Gershberg, Matthew Lewis and Maureen Bavdek)

9/11 Commissioner Bob Kerrey finally confesses 9-11 Commission could not do it's job - Part 3 of 3

Click this link ....... http://tinyurl.com/yz56grj

Glenn Beck - Prediction for Collapse of US Dollar & One World Government

Click this link ...... http://eclipptv.com/viewVid...

The US Dollar collapse starts now! - Peter Schiff

Click this link ..... http://eclipptv.com/viewVid...

Fed chairman pens op-ed panning proposed audit

The head of the US central bank said Saturday he was "concerned" by some congressional proposals aimed at regulating the US financial system that infringe upon the powers of the Federal Reserve.

"I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions," Federal Reserve Chairman Ben Bernanke wrote in an op-ed piece in The Washington Post.

He said some proposals considered by the US Senate as part of attempts to strengthen US government regulation of the financial sector would strip the Fed of all its bank regulatory powers.

He also noted that a House committee had recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence.

"These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States," Bernanke wrote.

"The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation," he stressed.

"Independent does not mean unaccountable. In its making of monetary policy, the Fed is highly transparent, providing detailed minutes of policy meetings and regular testimony before Congress, among other information," Bernanke argued. "Now more than ever, America needs a strong, nonpolitical and independent central bank with the tools to promote financial stability and to help steer our economy to recovery without inflation."

Congressman Ron Paul (R-TX), who has sought to audit the nation's largest bank for nearly 27 years, does not believe Bernanke's fears are substantiated.

"There is no reason why the world can't know, eventually, what the Fed is doing," he said recently.

His legislation, House Resolution 1207, cleared a key congressional panel on Nov. 19 by a vote of 43 to 26.

"[It] would require the Government Accountability Office to audit the central bank's interest rate policy, agreements with foreign governments, foreign central banks and the International Monetary Fund," according to MarketWatch. "It also would permit audits of a roughly $800 billion Fed mortgage-backed securities purchase program, which could grow to $1.25 trillion, Paul said."

This video is from Russia Today, broadcast Nov. 23, 2009.

FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!

U.S. banks are earning money again, but they're writing fewer business loans, threatening a fragile economic recovery.
The Federal Deposit Insurance Corp. reported Tuesday that U.S. bank loans fell by $210.4 billion or 2.8% during the third quarter – the biggest drop since the FDIC started keeping records in 1984. Banks booked $2.8 billion in third-quarter profits, reversing a second-quarter loss of $4.3 billion. "We need to see banks making more loans to their business customers," says FDIC Chairman Sheila Bair. "This is especially true for small businesses."

Loans to businesses fell 6.5%, and real estate loans plummeted 8.1%.

"Until small businesses are able to borrow, we can't have a robust economy, because that's your largest source of jobs," says Richard Posner, a law professor at the University of Chicago and a federal circuit judge. The Small Business Administration has said that small businesses created 64% of new jobs in the past 15 years.

Banks are reluctant to make new loans until they've cleared off the bad ones they made during the housing boom. Back then, they paid "insufficient attention to certain kinds of risky loans," says Edward Kane, finance professor at Boston College. "You can't expect them to turn around and turn the lending machine back on."

Non-current loans rose more than 10% during the quarter to $366.6 billion or nearly 5% of all loans, the highest rate on record. Banks charged off nearly $51 billion in bad loans last quarter, the 11th straight quarterly increase and up more than 80% from a year earlier. "Loan losses will continue to climb as long as foreclosures keep rising and homeowners, builders and developers continue to hurt," says Kate Monahan, banking analyst at Aite Group.

Banks don't expect things to get better anytime soon: Two out of three banks set aside more reserves for losses during the quarter, reserving a total of $62.5 billion, 22% higher than last year. Banks are hoarding money in super-safe Treasury securities, and, "Businesses were not as eager to take on debt," says FDIC chief economist Richard Brown.

新加坡‧遊金馬崙車禍癱瘓‧婦女告丈夫司機索償2000萬

(新加坡)遇車禍癱瘓,妻子告丈夫及肇禍另一輛汽車的司機,索償920萬(2208萬令吉)。

獅城夫婦駕車上金馬侖,途中汽車失控撞車,妻子嚴重受傷,半身不遂,入稟大馬法庭,向丈夫的汽車保險公司以及另一名肇禍的大馬司機索償920萬,是歷來個人損傷索償最高的官司之一。她的丈夫因此被列為答辯人之一。

這起車禍發生在2005年4月,當時36歲的妻子劉麗蓮(譯音,洋名Christina)和同齡丈夫符志建(譯音)凌晨4時從馬西嶺的住家出發,開車北上金馬侖。

汽車失控大道上旋轉

當時下著滂沱大雨,兩人的車子於清晨6時45分,在靠近芙蓉的南北大道處發生恐怖車禍,車子失去控制在大道上旋轉,還撞上路旁的鐵質圍欄。

就在這時,一輛車子從後面駛來猛烈撞上符志建的車子。劉麗蓮當時坐在後座,她的脊椎骨折,被送往當地醫院急救一週,過後轉進新加坡的中央醫院,留醫近2個月。

事發時,劉麗蓮是名公務員。車禍後,她半身不遂,也無法運用手指,她的頸項也受傷,而且無法再工作,不只需以輪椅代步,接下來的43年還需要女傭貼身照顧她。

索償對象是保險公司

她通過一名新山律師提出民事訴訟,向丈夫和汽車保險代理追討總數920萬元的賠償。這筆款項就包括了聘請女傭43年的210萬元、400萬元的醫藥費、因無法工作而損失的50萬元薪水等。

不過,劉麗蓮強調,雖然法庭文件上顯示她的丈夫、保險公司及那輛大馬注冊車子的司機都是答辯人,但事實上,她要索償的對象只是保險公司和那位司機。

的丈夫被列為答辯人之一,只因為事發時,我坐在丈夫開的車內。”

案件原定上週在開庭審訊3天,但已展延至明年初。

夫和保險代理堅稱
妻傷勢由後方車子造成

劉麗蓮的丈夫符志建和其汽車保險代理堅稱,妻子的傷勢是後面撞上的車子造成的,他們不應該為她的傷勢負責。符志建表示,車子失控旋轉後停在路上,之後便被另一輛車子撞上。

符志建的代表律師表示,劉麗蓮的嚴重傷勢是第二輛車子造成的,疏忽駕駛的是這名司機。

記者今日(週一,11月30日)早上走訪夫婦位於淡濱尼的前住家,鄰居表示,車禍後,丈夫聘請女傭照顧妻子,丈夫對她無微不至,不時看到他推著坐輪椅的妻子去樓下散心。

車禍後曾患抑鬱症
婦女曾一度想尋死

妻子事發前是名監獄官,車禍後曾患上抑郁症,一度想尋死。

劉麗蓮週一早上受訪時說,當初動過頸部手術後,以為下半身的麻痹現象很快就會好,沒想到,後來卻被告知下半生將無法靈活運作。

“我當時很沮喪,完全不能接受醫生的話,還因此一度患上抑郁症,需要接受輔導。我還曾私下告訴輔導員,就給我藥讓我走吧,我真的不想拖累我的丈夫和家人。”

丈夫也透露,單是醫藥費,每個月就得花上1200多元,再加上女傭薪水及住家月租,他們的經濟負擔不輕,但夫妻倆卻能互相扶持,希望能通過這次難關。

美國‧奧巴馬已下達執行令‧對阿富汗新戰略12月2日宣佈

(美國‧華盛頓)美國白宮週一(11月30日)透露,奧巴馬總統在宣佈阿汗新戰略的前一天,已經下達了執行新阿富汗戰略的命令。

奧巴馬將於今日(週二,12月1日)晚上8時(大馬時間週三(12月2日)早上9時)黃金時段,在西點軍校發表全國講話,宣佈阿富汗新戰略的主要內容。

據媒體報導,奧巴馬不單會宣佈增兵的數目,同時會交待美國由阿富汗撤軍的戰略。

奧巴馬已匯報盟友

白宮發言人吉布斯指出,奧巴馬在週日(11月29日)晚間,與軍方將領舉行了最後的會議。吉布斯說,奧巴馬已簽署批准新的阿富汗戰略,不過他拒絕透露細節,但表示奧巴馬將在講話中強調阿富汗戰爭不是無限期的。

他指出,奧巴馬當天下達命令,要求國安團隊幕僚切實執行即將宣佈的決定,同時通知了美國駐阿大使艾肯伯裡以及美軍駐阿最高指揮官麥克里斯特爾。

白宮表示,奧巴馬還通報了英國、法國、意大利和澳洲等盟國首腦,及俄羅斯總統梅德韋傑夫和中國國家主席胡錦濤。

為逐步撤出創造條件

五角大樓指出,奧巴馬可能宣佈增兵3萬至3萬5000人。但同時將對作戰目標以及將防禦移交阿富汗軍隊的時程,提出時間架構。

吉布斯指出,奧巴馬雖然不會給出從阿富汗撤軍的時間表,但希望通過這次增兵能為美軍的逐步撤出創造條件。

這項增兵行動對奧巴馬來說是一場政治賭注,美國民眾擔心美國將再陷入越戰般的泥淖,以及增兵行動對經濟陷困的國家財政的重擔。

美國於2001年揮軍阿富汗以來,已經有900美軍士兵在當地喪生。在10月,多達74名美軍在阿富汗遇襲身亡,為開戰以來犧牲最慘烈的一個月。

美要求北約向阿增兵

美國國防部希望北約盟軍向阿富汗增派1萬士兵,以填補美軍駐阿最高指揮官麥克里斯特爾要求增兵4萬,而美國只將增兵3萬人的餘缺。

但是北約外交官和防務分析家指出,歐洲將無法達到華盛頓的有關要求。預計北約盟友將只會向阿富汗增兵5000人。

以下是部份北約成員的表態:

‧法國(目前駐有3400人)

法國無意向阿富汗增兵,認為各國應著重以援助的方式協助阿富汗。

據法國《世界報》報導,美國要求法國增兵1500人。

‧英國(目前駐有約9000人)

英國將於12月初向阿富汗增派500名士兵,屆時包括特種部隊和援助部隊,總數將超過1萬人。

‧意大利(目前駐有3250人)

意大利準備向阿富汗增兵,但未提具體人數。

‧澳洲(目前駐有1550人)

總理陸克文週一表示,將會派遣更多警察訓練人員和文官專家到阿富汗,但他同時暗示,澳無意繼續向阿增兵。

他指出,澳洲政府對澳美聯盟是“認真”的,澳洲將長期駐守在阿富汗。

‧馬其頓(目前駐有160人)

馬其頓將於明年2月向阿富汗增兵80人。馬其頓並非北約成員。

時代雜誌:銳氣全失
美歷經“地獄十年”

最新一期時代雜誌報導,過去10年間美國噩運連連。從2000到2009年,美國的經濟不進反退,民心低迷,堪稱美國“地獄的十年”(The Decade From Hell)、“失落的十年”。

這篇專文指出,美國經過這10年的挫折已銳氣全失,不再是舉世最樂觀進取的國家。

以下是《時代》盤點美國“地獄十年”10件最壞事:

1.2000年美國大選

《時代》指出,當布什以微弱優勢獲勝時,恐怕也奠定了接下來“地獄10年”的基調。

2.911恐怖襲擊

不僅改變了全球政治格局,也影響了至少一代美國人的生活,令他們不再相信自己生活著的這個國家是絕對安全的。

3.進攻阿富汗

當美軍將塔勒班逐出喀布爾的時候,人人都以為美國成功了。然而,事並沒有就此結束,對於美軍來說阿富汗戰場的局勢正變得越來越艱難,而塔勒班的抬頭也將為美軍前景雪上加霜。

4.佔領伊拉克

隨著布什有關“伊拉克存在大規模殺傷性武器”謊言的破滅、數千美軍士兵喪生伊戰戰場、巴格達阿布格萊布監獄虐囚事件的曝光,美軍自此深陷伊拉克泥潭。

5.印度洋海嘯

雖然這件事並非與美國息息相關,但是在2004年的這場浩劫中,近20萬人在短短幾小時內被大自然母親“殺害”,也可謂“地獄十年”的代表性事件。

6.卡特里娜颶風

新奧爾良這個頗能代表美國風貌的城市被徹底淹沒,災難發生後美國各級政府遲滯的救援行動更是增加了災難的悲劇性,原來世界超級大國美國在天災面前也如此不堪一擊!

7.金融危機

2008年9月美國雷曼兄弟公司破產正式宣告美國陷入金融危機,很快這種恐懼情緒就在全世界傳播開來。對於美國人來說,未來是一片灰暗。

8.麥道夫的“龐氏騙局”

他所設下的騙局被稱之為“大規模金融殺傷性武器”,為美國業已黯淡的經濟狀況再添一筆濃重的陰影。

9.汽車三巨頭的衰落

隨著金融危機全面侵蝕美國實體經濟,一直苦苦掙扎的美國汽車業也到了山窮水盡的地步。

10.虐囚醜聞

對於美國來說,近10年來最大最困難的改變恐怕就是從世界上唯一的超級大國轉變為世人眼中的“邪惡國家”和“人權踐踏者”。

中國‧少林寺拒迎戰引來撻伐之聲‧峨嵋要代少林迎戰泰拳

(中國‧北京)泰國5大拳王近日向中國武林泰斗少林寺下戰帖,但少林寺拒絕迎戰,在國內掀起波瀾,引發媒體、網民撻伐,峨嵋派決定挺身而出,準備接下戰帖。

中國武林最近風起雲湧,事緣2009年中國功夫對職業泰拳爭霸賽,將於12月19日在廣東佛山 舉行,泰拳5大拳王“神目殺”、“鬼見膝”、“魔術錐”、“拳滅風”和“屠龍肘”將會應戰,但他們態度囂張,竟嘲諷在武林界首屈一指的少林功夫“不過是小 菜一碟”,不但指名要跟少林寺住持釋永信對打,還要“打到他趴著走”!


中國武林第一大門派少林寺,以“習武是為自身修煉”為由,拒絕泰拳拳王的挑戰,不料卻因而引起中國網民和媒體的口誅筆伐。(圖:中新社)


拳王之一的考克萊還口出狂言:“中國武術將被泰拳秒殺。”

然而,在中國民眾義憤填膺之際,少林方丈釋永信僅低調批評對方籍少林寺品牌炒作,並以“少林武僧以修行為主,從來不會主動向別人挑戰,也不會接受來自任何方面的挑戰”、“習武是為自身修煉”為由,淡而化之,並拒絕迎戰。

此言一出,中國互聯網上一片撻伐少林寺之聲,網民疾呼“少林寺的高僧們,民族需要你們的時候到了!”媒體則批評少林寺被踢館前,已被商業化擊倒了。

峨嵋派掌門人看不過眼

武林三大門派之一的峨嵋派掌門人汪鍵看不過眼,決定連同他的得意弟子黃林一同應戰,並已向中國武術協會遞交了參賽申請。

汪鍵強調,習武之人雖然講究一個“忍”字,但忍無可忍,便無須再忍,何況這不是個人的榮辱,而是要為中國武術正名。

他說:“峨眉派要以中國功夫迎戰驕橫囂張的泰拳拳王,要讓他們知道,中國武術從來就不是‘小菜一碟’!”

儘管峨嵋派決定代少林出頭迎戰泰拳,但中國武術管理中心已明確表態,中泰對抗賽不會派民間高手出戰。

只能由職業運動員參戰

由於“中國功夫對職業泰拳爭霸賽”是中泰雙方武術交流的一部份,賽事由體育總局武術管理中心主辦,因而規定只能由雙方的職業運動員參戰。

此中心主任高小軍表示,此次比賽的中方隊員,將會在註冊的專業運動員中進行選擇。即便是退役的柳海龍,也無緣這一賽事。所以,不論是泰拳向少林挑戰也好,還是峨眉主動應戰也好,這些挑戰最終都難以兌現。

據指出,從人身保險、競技水平以及針對性訓練等幾個方面考慮,國家隊的專業運動員每天訓練都在6個小時以上,比起民間人士而言,受傷的可能性較小。

對此,峨嵋派掌門人汪鍵表示,即使不能參加比賽,到時也會去觀摩比賽,看看對手究竟有多厲害。

美國‧首位外國人‧改變美經濟‧溫家寶上榜

(美國‧華盛頓)美國廣播公司(ABC)選出10名自2000年來改變美國經濟的人物,榜上除了現任財長蓋特納、前財長保爾森,以及聯邦儲備局主席伯南克等美國人外,中國國務院總理溫家寶也榜上有名,是唯一上榜的外國人。

ABC指出,上榜的人物包括有權力的財金官員、豪或者兩者俱備的財雄勢大人物,有的是因為去年爆發金融海嘯後扮演重要角色,有的則在金嘯海嘯前已一直對美國經濟發揮巨大影響力。

例如前財長保爾森便是金融海嘯中的重要角色之一,去年9月爆發雷曼兄弟事件,他被批評沒有及時拯救雷曼,導致美國經濟瀕臨崩潰,但同時被喻為美國最有影響力的人物,他遊說國會支持7000億美元救市措施。

接替保爾森成為財長的蓋特納,曾任紐約聯儲銀行總裁,面對百年一遇的金融海嘯也被嚴厲批評,有議員甚至要求他辭職,他則把責任歸咎於前政府,指布什將爛攤子留給奧巴馬政府。

榜上唯一的外國人是中國總理溫家寶,ABC指中國是經濟火車頭,最近更取代德國成為全球第3大經濟體,又是美國最大的債權人。但有評論憂慮中國可能在製造另一個資產泡沫,如果爆破將破壞銀行系統,並對全球經濟帶來災難性後果。

10大改變美國經濟人物

‧前財長保爾森
‧聯儲局主席伯南克
‧財長蓋特納
‧前聯儲局主席格林斯潘
‧AIG前行政總裁格林伯格
‧聯邦儲蓄保險公司主席拜爾
‧中國國務院總理溫家寶
‧摩根大通主席兼行政總裁戴蒙
‧美國銀行行政總裁劉易斯
‧“股神”巴菲特

新加坡‧死者Singpass被盜用引遺產糾紛‧“合夥人”敗訴不能承繼資產

(新加坡)獨資經營起重機出租公司的單身漢,死後3小時,其Singpass被人使用,上網將獨資公司改為合夥公司,最終引發一場罕見的遺產糾紛。

死者高金福(死時53歲)的幼弟高明勝(40歲,股票經紀),指有人使用他三哥(即死者)的Singpass,向警方報案。

高明勝後來與一名外甥魏文霖(37歲),指被列為公司另一合夥人的李保利(63歲)不當地剝奪死者的遺產,兩人以遺產管理人的身份,向李保利追討後者接管公司後的損失、兩輛起重機等,結果成功幫死者索回其資產。

據瞭解,高金福排行第6,有9個兄弟姐妹,其公司總值50萬元左右。

高明勝說,他的父親過年前過世。80歲的母親行動不便,但神志清醒,就委任他和外甥幫三哥向李保利索償。

高金福4年多前因肝癌逝世。索償案拖了4年多,終於有了結束。

上週得知索償成功後,他母親非常高興。

高金福生前沒立遺囑,遺產須按照無遺囑繼承法分配。

換句話說,其遺產一半可歸母親,另一半9個兄弟姐妹均分。不過,高明勝說,兄弟姐妹已決定把遺產交給母親,由她老人家處理。

India's economy grows 7.9%

India reported its best growth figures for more than a year today as government stimulus measures and record low interest rates boosted Asia's third largest economy.

The 7.9% year-on-year expansion prompted a leading government advisory panel to increase its estimate for the year to March 2010.

The figure easily eclipsed the consensus market forecast of 6.3%.

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India's expansion was the strongest quarterly performance since early 2008.

Growth in the September quarter was led by manufacturing, which surged 9.2% while social spending climbed 12.7%, reflecting big government outlays to shield the economy from the international slump.

India has weathered the worldwide downturn better than other nations due to its mainly domestically focused economy.

The economy logged 6.1% growth in the previous quarter to June.

The figures come as the Asian region as a whole has seen stronger growth as it pulls out of the global slump. China grew by 8.9% in the third quarter - the fastest pace in a year.

New iPhone worm found in the wild

On November 2 a hacker was able to identify jailbroken iPhones unning SSH on T-Mobile’s Netherlands network via port scanning and used the vulnerability to change the wallpaper to display a message that demanded a 5 Euro ransom.

One November 7 another malware, dubbed ikee, “rickrolled” compromised iPhones by changing the wallpaper to a picture of Rick Astley (pictured).

Today a new, more nefarious worm that attacks jailbroken iPhone and iPod Touch devices has been discovered. According to Sophos this latest iPhone worm was discovered when a Dutch ISP reported unusual amounts of data traffic. Slashdot posted a link to a translation of a Dutch security blog post with more details.

There are some significant differences from the 5 Euro scam, the most notable of which is that this worm uses command-and-control like a traditional PC botnet. It configures two startup scripts, one to execute the worm on boot-up, and the other to create a connection to a Lithuanian server (HTTP) to upload stolen data and cede control to the bot master.

Security.nl reports that the new worm changes the SSH root password making it more difficult to stop.

This worm attacks IP ranges from a larger range of ISPs, including UPC (Netherlands), Optus (Australia), and T-Mobile (Many). When an infected device is hooked up to a WiFi connection, the worm can spread more quickly to more IP addresses than on a typical 3G connection.

It’s difficult to tell if your iPhone has been compromised, but one symptom is that battery life becomes very, very short when the device is connected to WiFi, because the worm is generating so much network activity. The recommended method to remove this malware from your iPhone is to restore the Apple factory firmware using iTunes.

If you’ve jailbroken your phone and are running SSH, change the default password.

Hurricane seasons ends, one of calmest since 1990s

SAVANNAH, Ga. (AP) - The hurricane season is ending with barely a whimper.

The 2009 Atlantic season officially ends Tuesday. This year produced just nine named storms, including three hurricanes. Only two tropical storms - Claudette in August and Ida in November - made landfall in the U.S. Those tropical storms brought heavy rain and some flooding but caused little destruction.

This was the quietest hurricane season since 2006, when none of the nine storms hit the U.S. coast. The calmest season before that was in 1997, which had just seven storms.

James Franklin of the National Hurricane Center says El Nino (NEEN-yo) conditions in the Pacific Ocean helped produce strong winds that disrupted storms in the Atlantic before they could strengthen into hurricanes.


Peter Schiff on Dubai World and Ben Bernanke

Click this link ...... http://eclipptv.com/viewVid...

Bernie Sanders Exposes Bernankes Crimes on MSNBC

Click this link ....... http://eclipptv.com/viewVid...

British yacht crew of five detained in Iran

LONDON (Reuters) - Five Britons have been detained in Iran after their racing yacht may have inadvertently strayed into Iranian waters, British Foreign Secretary David Miliband said on Monday.

The yacht, en route from Bahrain to Dubai, was stopped by Iranian naval vessels on November 25, he said in a statement.

The five crew members were still in Iran and were understood to be safe and well and their families had been informed, the statement added.

Foreign Office officials "immediately contacted the Iranian authorities in London and in Tehran on the evening of 25 November, both to seek clarification and to try and resolve the matter swiftly", Miliband said.

"Our ambassador in Tehran has raised the issue with the Iranian Foreign Ministry and we have discussed the matter with the Iranian embassy in London.

"I hope this issue will soon be resolved. We will remain in close touch with the Iranian authorities, as well as the families."

The Volvo 60 class yacht, called Kingdom of Bahrain and owned by the Sail Bahrain project launched by the Team Pindar sailing team, was due to have reached Dubai on November 26 to take part in a 360-mile Dubai-Muscat race, local media reported last week.

Along with the rest of the race fleet, it was to have passed through the shallows of the Gulf into the Indian Ocean before arriving in the Omani capital Muscat.

Tension has dogged relations between Britain and Iran in recent years over a range of issues from Tehran's nuclear program to Iranian allegations of British involvement in post-election violence in June this year.

Britain protested to Iran over a speech by Supreme Leader Ayatollah Ali Khamenei in the wake of the June protests, in which he called it "the most treacherous" of Iran's enemies.

In March 2007, relations between London and Tehran hit a low point after Iranian forces seized eight British Royal Navy sailors and seven marines in the mouth of the Shatt al-Arab waterway that separates Iran and Iraq.

They were freed unharmed the following month as a "gift" from President Mahmoud Ahmadinejad who scolded Britain for not being "brave enough" to admit they had made a mistake and strayed into Iranian waters.

Three Americans who crossed into Iran from northern Iraq in July this year are still detained and face spying charges. Their families say they were hiking and strayed across the border accidentally.

On Sunday, Miliband was among several world leaders to condemn Iran's announcement that it planned to build 10 new uranium enrichment plants in a major expansion of its atomic program. He accused Iran of choosing to "provoke and dissemble" rather than engage in talks. (Reporting by Avril Ormsby; Editing by Andrew Dobbie)

U.S. stocks cap biggest monthly gains since July

Graphics shows U.S. stocks rise after a choppy session on November 30, 2009, as investors tried to digest mixed data on consumer spending in this year's holiday shopping season. (Xinhua/Qu Zhendong)
Graphics shows U.S. stocks rise after a choppy session on November 30, 2009, as investors tried to digest mixed data on consumer spending in this year's holiday shopping season. (Xinhua/Qu Zhendong)


NEW YORK, Nov. 30 (Xinhua) -- The U.S. equity market ended November with its best monthly advance since July, even as investors worried about the consumer spending during the holiday season and Dubai World's debt crisis.

The Dow rose by 632 points, or 6.5 percent, in November, its fifth straight monthly gain. The S&P 500 index added 5.7 percent in November as it rebounded from the first monthly decline since reaching a 12-year low in March and the Nasdaq rose 4.9 percent.

The dollar's weakness has been a big driver behind higher stock prices for months, as the relationship between moves in the dollar and stocks has been incredibly tight.

Commodities are traded in dollars, so a weak dollar pushes the price of commodities higher. Strengthening in the commodities market further uplifts shares of energy and materials producers.

Gold prices, for instance, soared to a record above 1,180 U.S. dollars an ounce on the back of weak greenback on Nov. 25 before plunging amid Dubai debt fears two days later.

Moreover, a batch of better-than-expected economic data also played a role in the market rally. Areas like housing and labor market showed moderate improvement during the month.

The U.S. Labor Department posted that the number of newly laid-off workers filing claims for unemployment benefits fell more than expected in the week ended on Nov. 21 to the lowest level in over a year. And the number of workers receiving benefits also fell to the lowest level since February.

And a report from the Commerce Department showed purchases of new homes rose 6.2 percent in October, much better than the 0.5 percent increase economists had expected.

In addition, Theodore Weisberg, a trader with Seaport Securities on the New York Stock Exchange, indicated that the recent growth of the stock market was partially driven by traders. He said "We have many retail investors and they hesitate to come back to the market, because we still have a lot of uncertainties."

As a matter of fact, investors have been battling mixed signals on the economy in recent months. Although the housing market is stabilizing, others like manufacturing are still lagging. Investors also concerned that the big improvement in the labor market will be temporary as the weak economy continues to push unemployment higher.

Investors have talked for months their bets on an economic recovery over the past eight months may have been overdone, as the Standard & Poor's 500 index is up over 60 percent since early March. And some worried that there's a stock bubble.

Statistics from the National Retail Federation, a trade group, indicated that more consumers went shopping over the Thanksgiving holiday weekend, yet spent less than last year as they hunted for bargains on toys and electronics, a sign that a rebound of consumer spending might be sluggish.

Moreover, Dubai's debt crisis unveiled on Nov. 27 reminded investors that the global economic recovery is not a plain sailing. Dubai World, which is wholly owned by the government, requested for a standstill agreement with creditors and threw doubt on 59 billion U.S. dollars of liabilities.

Investors were anxious about the possibility that a default by Dubai could touch off a new round of lending problems even as credit markets are still recovering from last year's near-meltdown following the collapse of Lehman Brothers.

However, Theodore predicted the market is likely to continuously move forward, as investors who have missed the huge rally since March are closely watching and seeking buying opportunities.

"I think we are far from the bubble phase. I think the sell-offis buying opportunity, not selling opportunity. If we think in terms of where stocks were a year ago and where they are now, there is still a lot of value", said Theodore.

And some analysts pointed out that record-low interest rates are leaving even hesitant investors with few options for generating decent returns, so they keep buying stocks although they're wary about whether the market can keep rising.

Therefore, as the end of the year approaches, some investors who missed out on the eight-month rally that began in March are looking for opportunities to get in, creating a possibility of continuous equity gains in December.

Lessons from Dubai

The global tremor that followed last week’s announcement from Dubai that the state-owned Dubai World was asking, indeed demanding, that creditors agree to a six month moratorium on the repayment of its debts is abating as it has become clearer that the problems in Dubai are containable and manageable.

While the markets’ preferred solution – a bailing out of Dubai by its richer neighbour, Abu Dhabi – appears unlikely, this morning’s statement from Dubai World has calmed markets, as have disclosures of minimal individual exposures from banks around the world.

The United Arab Emirates' action in providing liquidity to local and foreign banks has also contained the risk of contagion throughout the region.

While Dubai World has $US60 billion of borrowings, the statement said it was having constructive talks with lenders in relation to $US26 billion of debt within its most troubled subsidiaries. Dubai World is looking for a moratorium on repayments of its loans until at least May next year.

Earlier, the government of Dubai had made it clear that, while it owns Dubai World, it doesn’t guarantee its borrowings and therefore the creditors would have to accept responsibility for their own judgments in lending to the group.

Given that prospectuses for Dubai World’s Nakheel property group explicitly stated that its borrowings weren’t guaranteed by the state, that does tend to illustrate again how bank credit standards deteriorated during the credit bubble.

No doubt bankers around the globe are now poring over their loan agreements with sovereign wealth funds and other state-owned enterprises to determine whether there is explicit government support for their exposures. The Dubai World implosion says that implicit state backing as a consequence of state ownership can’t be assumed in a crisis.

From the outset it was apparent that, by itself, even a complete collapse of Dubai World wasn’t a threat to the stability of the global financial system, in itself. However, it was an unpleasant reminder to markets and lenders of the continuing fragility of the system and a step too close to the potential for a sovereign default.

For much of this year there has been a false sense of comfort in global markets that a financial catastrophe had been averted and stability restored. Dubai World, and Dubai’s explicit distancing of itself from any responsibility for the state-owned enterprises’ debts, is a demonstration of how thin that veneer of stability remains.

A particular concern for markets and the banks will be the fragility of some of the smaller European economies – Greece is the one most singled out – with large borrowing requirements looming next year. Greece’s public sector debt is about 135 per cent of its GDP.

Dubai World provides a disconcerting preview of more significant issues to come, magnifying the focus on the prospect of actual defaults on sovereign debt and the particular and peculiar complexities of trying to manage economies on the brink within the Eurozone.

The markets may have stabilised and their worst fears might have receded quite rapidly, but the episode ought to be a sobering reminder that while the global system is edging away from the abyss into which it peered in the aftermath of the Lehman Brothers’ collapse, it still remains too close to it for complacency.

A Dubai shake-down would not be all bad news for the Turf

Repercussions of a halt to the Gulf cash which has poured into British racing would be felt unevenly

Sheikh Mohammed

Sheik Mohammed, seen here wearing the blue colours of his Godolphin racing empire, has vastly increased the wealth of British racing. Photograph: Stefan Rousseau/PA

It is 32 years since Sheikh Mohammed's colours were first carried to victory on a racecourse, and the precise amount of money he has since poured into racing around the world is beyond accurate calculation. And for almost as long as the sheikh and his brothers have been a dominant force in international bloodstock, there have been voices warning of the disaster that might follow if, or when, their money or enthusiasm ever ran out.

Now, it seems, we might be about to find out. Dubai World, the state-backed business behind much of the emirate's building boom, is drowning in debt. The neighbouring emirate of Abu Dhabi, which is in the much happier position of drowning in oil, may offer Dubai's best chance of rescue, but may also feel it is a bit cheeky to run the world's largest bloodstock empire with one hand while holding out a begging bowl with the other.

John Ferguson, one of Sheikh Mohammed's closest bloodstock advisers, stressed last week that the Sheikh's personal wealth is separate from that of Dubai itself, and that it is business as usual for Godolphin, Darley and all the many other racing and breeding businesses that have their roots in Dubai.

That may well be so, though you would hardly expect him to say anything else. But however the current financial crisis in the Gulf eventually resolves itself, this is an obvious moment for British racing to consider the certain fact that one way or another, Sheikh Mohammed will not be with us forever.

You could spend a month assessing the various ways in which the loss of Sheikh Mohammed's investment might affect the racing industry, and still not form a complete picture. His money, and influence, run that deep.

But it might also pay to remember that one of racing's weaknesses is its ability to talk itself into despair. Listen to the Racehorse Owners' Association, for instance, and you might imagine that prize money is now so miserable that meltdown is just a matter of time. But is this really the case? Or is it just that the chippiest owners, the ones who see no further than the bottom line, get themselves elected to the ROA council, while the rest get on with enjoying themselves.

It is certainly hard to see how the loss of investment from Dubai would be anything but a catastrophe for the breeding industry. The Maktoum brothers' money has underpinned the market at the major yearling sales for decades, and without it, the prices would surely collapse.

Whether a calamity for breeders inevitably means disaster for racing too is another question. A sudden glut of choicely bred and unexpectedly cheap yearlings might even help to broaden the ownership base, tempting in new owners at the upper and middle levels.

The effects of losing the Maktoums' money would also be felt unevenly. It would be bitterly painful for Newmarket in particular, which is a centre for breeding as well as training, and a place where many have grown complacent about the apparently never-ending stream of investment. Jobs would be lost, and possibly licences relinquished, though Sheikh Mohammed's personal racing interests are no longer spread around town and largely reside with Godolphin.

The cash that the Maktoum family spend on sponsorship – in terms of individual races, like the July Cup, and also Channel 4's television coverage – is also significant, and would be missed.

But the fact remains that the billions the Maktoums have invested into British racing over the last 30 years have been just that – an investment, not a loan. By any measure you choose, the sport in Britain is in far better shape now than it was before Sheikh Mohammed and his brothers arrived, and they deserve a great deal of the credit for that. But it need not mean that if their money dries up, the entire edifice will collapse.

A modern racing industry should be big and stable enough to survive the loss of any individual, or group of individuals. But there is, of course, only one way to find out.

Dubai: From growth to crisis

The near default of the biggest state conglomerate of Dubai has sent shock waves across global markets. C. P. CHANDRASEKHAR and JAYATI GHOSH look at the factors behind Dubai's recent growth and the causes of the current crisis.



There is much about Dubai that is artificial and based on illusion: the man-made islands designed to represent a map of the globe; the indoor ski slope in the midst of desert; the incredible hotel with glass walls looking onto a sea aquarium mimicking the surrounding ocean.

And, recently, Dubai had also become synonymous with excess: building the tallest tower in the world and the biggest and most expensive luxury hotels, residences, shopping malls and office complexes; providing the market and the sales venue for the most outlandish and flamboyant luxury goods; redefining grandiose expressions of opulence for the world as a whole.

Economic magnetism

Its very brashness was both a sign of, and a cause for, its success. Even the opacity that has characterised its political system became a source of economic magnetism. Expatriates flocked to its dynamic construction and tourism industries and relished the tax-free incentives. And Dubai emerged as one of the new global financial centres of the developing world.

In the early phases of the global financial crisis, all this even seemed to be an advantage, as investment activity and construction continued at feverish pace. For example, plans for constructing the world's most newest tallest building (near its closest competitor Burj Dubai) were unveiled just after Lehman Brothers collapsed in the US.

Continued growth in Dubai was heralded as another sign of Asian economic “de-linking” from the problems in the core of international capitalism. But now it turns out that this too, like so much else in Dubai, was based on illusion. The sudden declaration that the state-owned conglomerate Dubai World, which typified the apparently insatiable appetite for accumulation in the small Gulf Emirate, would unilaterally suspend its debt payments for at least six months came as a sign that the improbable honeymoon is finally over.

Global stock markets — and especially emerging markets in Asia — went into shock at this announcement, raising fears of a replay of the aftermath of the Lehman Brothers collapse a little more than a year ago. So far that has not happened, but this is clear evidence of continuing financial fragility across the world, and a reminder that (despite all attempts by policymakers to talk up the markets) the financial crisis is really far from over.

What is the story behind the rapid economic rise and fall of Dubai? Dubai is one of seven small states that make up the United Arab Emirates (UAE), and it is second to Abu Dhabi (which is the richest and has most of the oil reserves) in terms of the size of its economy.

Diversifying its economy

Although the economy of Dubai, like those of its neighbours, was originally built on oil, currently oil revenues account for less than 6 per cent of its total revenues. In any case Dubai's oil reserves have diminished significantly and are expected to run out within the next twenty years.

Dubai's strategy has been to diversify its economy away from exposure to oil, and shift to trade, tourism and finance as engines of growth. It did that by encouraging its state-run conglomerate Dubai World to buy up companies around the world and inviting multinationals to use Dubai as the Middle Eastern base for their activities in Asia and elsewhere.

A subsidiary of Dubai World (DP World) purchased the British ports operator P&O in 2005, thereby becoming the fourth largest ports operator in the world. It also bought the department store group Barneys New York in 2007 and has since invested heavily in construction projects in Las Vegas in the US.

Dubai World also includes the property developer Nakheel, which is behind some of the most ostentatious commercial projects ever built on this planet. These include the Palm Jumeirah, a man-made island stretching into the ocean which is to serve as the base for luxury hotels and villas and the World Islands, a series of islands shaped to represent a map of the earth.

During the recent boom, it seemed that this heady and hedonistic expansion would never end. And it was hugely based on global integration, not only in terms of trade and financial flows, but also the movement of people. Of Dubai's resident population, more than 80 per cent are expatriates, including around 1.5 million from India.

Indian tourists — from the Bollywood crowd to newly affluent middle classes — have also contributed to Dubai's boom.

Is there a relation, as some have argued, between height and hubris? In any case it is clear that Dubai is an apt symbol of the recent overextension of capitalism, and the over-accumulation that typically characterises unfettered market behaviour in any period of boom.

The global crisis, which began with the decline in real estate values in the US, inevitably had its effect, as the global markets for luxury goods and services and for real estate both shrank simultaneously. But Dubai's fall began with the exodus of capital, as investors anticipated that emerging markets would be impacted by the recession, and because they needed the money to cover their losses in the US market.


Thereafter, the collapse of non-tradeable sectors, especially real estate and construction, was swift. Property prices in Dubai have fallen by more than 50 per cent in the past year. Many construction projects have been held up or even abandoned, first because of lack of easy finance and then fears about future prospects. The economy slumped from the second half of 2008. Chart 1 indicates the extent of the likely decline in GDP growth. At the start of the financial crisis, GDP growth expectations in 2009 for Dubai were four percent, but this was lowered to two percent in the middle of the year. The current account balance (Chart 2) also entered sharply negative territory.

Even so, there was official denial of the downturn, with government spokesman claiming that the Dubai Strategic Plan, which projects economic growth at an average 11 per cent annually through 2015, would be fulfilled.

Early in November 2009, the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, who is also prime minister of the UAE, broke into English in a press conference to declare “I want to tell those people who nag about Dubai and Abu Dhabi to shut up”. He also announced that he was proud of Dubai World and its “long term commercial success”, feeling that the worst was now over for its financial problems.

This was clearly not so. On November 26, barely two weeks after his brave statement, Dubai World announced that it was seeking a debt standstill for $15 billion of repayments on its $59 billion of external debt until May 2010, and had hired Deloitte to help it restructure to move into financial viability. This surprise announcement, coming on the eve of the Bakri-Eid holiday, reverberated across global markets.

Currently there are concerns about counterparty risk for the European and Asian banks that lent to Dubai World. As we have found over the past year, getting accurate numbers from any financial player about the true extent of liabilities is next to impossible.

The official estimate of the UAE's sovereign debt is $80 billion, but some analysts say it is much more and could be even twice that amount. European banks are heavily involved: according to the Wall Street Journal (using data from the Bank for International Settlements) European banks alone have almost $84 billion in exposure. UK banks (including HSBC, Standard Chartered, Barclays and Royal Bank of Scotland's ABN Amro) have by far the largest exposure at $49.5 billion, while French and German banks are also implicated.

Among the Indian banks, Bank of Baroda has an exposure of about Rs 5,000 crore in Dubai, which accounts for half of its loans in the UAE. Several Indian companies (Nagarjuna Constructions, Larsen & Toubro, Punj Lloyd, Voltas, Omaxe, Aban Offshore, Spicejet and Indiabulls Real Estate) have investment and business exposure in Dubai, but they have generally rushed to declare their exposure to be marginal.

But the most direct impact in India is through workers. Most of the 1.5 million Indians in Dubai are blue collar workers in construction or low grade services, who typically have temporary contracts and have to live in rooms housing six to ten other workers. In a country with no unions, it is easy for companies to lay off workers. For that reason alone, it is hard to estimate the extent of job loss after the crisis, but it is estimated that tens of thousands of workers in the construction and real estate market alone have lost their jobs over the last few months.

Some idea of market scepticism about Dubai's immediate prospects is to be found in the movement of the credit-default swaps (CDS), which are tradable, over-the-counter derivatives that function like a default insurance contract: if a borrower defaults, the protection buyer is paid compensation by the protection seller. The five-year CDS for DP World increased more than four times in two days, to hit 810 basis points on November 27. This puts the Emirate in the same league as Iceland.

Help from Abu Dhabi

Dubai is relatively fortunate, however, in that investors still believe that it will ultimately be bailed out by its “elder brother” Abu Dhabi, which already granted Dubai a $10 billion loan in February 2009. Some analysts have argued that it is not a question of whether, but when, Abu Dhabi will step in. After all, Abu Dhabi's sovereign wealth funds have reserves estimated at over $700 billion, so bailing out Dubai World will not be that difficult. It is also in its own interest, not only because the costs of insuring Abu Dhabi's sovereign debt has shot up in the past week, but because it cannot afford very damaged financial credibility in the region.

But even if Dubai manages to survive the current crisis, broader questions remain. Dubai is not unique in being tripped up by its earlier irrational exuberance especially in housing and real estate. The rotten fruits of the earlier phase of over-accumulation are still waiting to be collected, and as a result there are plenty of potential banana skins waiting to skid investors in financial markets across the world.

Real estate in the US continues to fall, especially in luxury markets such as Florida, and default and dispossession continue to increase. Elsewhere too, the multiplier effects of the collapse of the construction and real estate sectors are still working their way through the economy. The latest fear of sovereign default is from Greece, as the CDS spread for Greek bonds has swung from 5 to 200 basis points in a few weeks. Ireland is also in trouble.

So financial markets may have good reasons for reacting the way they have. The collapse of the Dubai dream is not a sui generis event without any implications for wider markets. Rather, it may be a straw in the wind indicating that the travails of finance capitalism in the current period are far from over.