Mohamed El-Erian CEO of PIMCO and co-CIO with Bill Gross talks about the Dubai Debt Crisis. The markets have gone up indiscriminately on liquidity alone. The money from the Fed hasn’t made it to the real economy so all asset classes went up. Dubai World needs six months to resume debt payments is an event that triggers a re-pricing of assets.
Asian markets were down 5% on the news but the S&P 500 futures were down 24 on Globex over Thanksginving, but today the damage was 19 points. So it looks like the market considers it contained.
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