I had been busy for a few days and this caught me by surprise: global markets in a free fall because Dubai World might default on its US$59 billion debt.  Everyone knew that Dubai World was having a lot of trouble refinancing its debt, but given that the government of Dubai is the only shareholder of Dubai World, almost everyone expected that they will be rescued.  While that still might be true, the ruler of Dubai hadn't given any indications that a rescue might be in works.

And just this morning, after a couple fairly hard days for the world markets, Abu Dhabi announced that it will rescue selective assets of Dubai World.  While this is welcome news, the fact that uncertainty will remain over what and how much will be rescued by Abu Dhabi means that the world markets will continue to stay cautious.  

While this is not as big as the sub-prime crisis, this news comes right when the global economy seemed to have been recovering.  With investors looking for positive signs to enhance their confidence in the markets, this is a big step back.  Most importantly, this will seriously hamper investments into the developing world and that, in the end, might be the biggest impact of Dubai World's mismanagement.