Worldwide stock markets lower again on Dubai fears

Worldwide stock markets have again been marked lower on concerns that the Dubai saga could overflow into the general worldwide money markets. While the ruling family in Dubai has moved to allay market fears about the future, there is some concern that we could possibly move back to a similar credit crunch scenario that we saw two years ago - but this time against an already weakened worldwide economy.

Many western banks and Western businesses have significant exposure to Dubai which is starting to cause a ripple effect across the world. While it is still very much early days regarding the Dubai issue there are already fears it could impact upon demand for commodities such as oil if the worldwide economy was to slow again. This particular issue has "come from nowhere" although in reality the various parties in Dubai have built a $60 billion deficit over the last few years trying to expand the economy and attract more investors from overseas.

Many people believed this expansion and investment programme was too much too soon and in many ways they have been proved correct in their assumptions. Confidence has taken a hit in the short term and confidence was already fragile due to the difficulties already being experienced around the world.