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Will the last investor to leave Dubai please switch off the lights!

As the Dubai crisis continues to worsen over the weekend, with news that the Abu Dhabi authorities are not willing to become involved in a wholesale bailout, there is concern for the short to medium term outlook. It looks as though the Abu Dhabi authorities will "cherry pick" the best assets from Dubai and offer financial assistance to gain control of these particular investments. So what happens to the rest?

There is no doubt that many investors have now left Dubai and the vast majority who remain are those who have not been able to sell on their investments. We are seeing pictures in the weekend press of cars left covered in sand as investors literally flee the area for pastures new, leaving behind more potential problems for the authorities. Whether the Dubai authorities have overstretched themselves, making a collapse inevitable in due course, or they have literally been pole-axed by the credit crunch and the ongoing worldwide recession is a very pertinent question to ask.

It is only now emerging how many worldwide banks also have exposure to Dubai with the likes of Royal Bank of Scotland seemingly being very active in the region over the last few years. The severity of the Dubai crisis, and its length, will depend very much upon how governments around the world react and how investors perceive the issue and how it may impact on the worldwide economy.

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