Dubai’s problems are spreading out.
Wednesday, December 9th, 2009. 9:15 a.m.
Dubai’s original problem with its ‘sovereign wealth fund’ Dubai World, which surfaced a couple of week’s ago. is turning out to have been a warning shot. In spite of the Dubai government’s assurances that the problem is confined to only the Dubai World’s local development projects, it is apparently not.
I noted a week or so ago how the Fontainebleau Resort in Miami, 50% owned by Dubai World, is in financial trouble. Another Dubai investment in a New York hotel is now rumored to be in trouble over its debt.
Now the problems seem to be spreading to Dubai’s government financing, with word that the credit downgrades of Dubai World’s projects is triggering a clause in the debt financing of the Dubai Electricity and Water Authority’s debt financing, calling for accelerated payments.
Concerns about the debts of some of the world’s governments have increased and spread since Dubai World’s problems surfaced.
Fitch Ratings has cut Greece’s credit rating to the lowest in Europe. Moodys’ Rating says the United Kingdom’s rating and that of the U.S. could be at risk if they don’t lower their budget deficits.
Russia has begun publicizing its concerns about its own financial situation.
The concerns seem to have pushed worries about retails sales in the holiday shopping season to one side.
Asian markets were mostly down again last night.
Among individual countries; Australia closed down 0.7%. China closed down 1.7%. Hong Kong closed down 1.4%. Japan closed down 1.3%. India closed down 0.6%. Singapore closed down 0.3%. South Korea closed up 0.4%. Taiwan closed up 0.4%.
NOTE: If you’d like to see a 4-month chart of any of these markets (and more), click here, and click on any of the market indexes at the left side of the page it takes you to.
Yesterday in the U.S. market.
Once again it was not a pretty day. Negative from the open, with no success in trying to recover.
Yesterday’s Intraday Chart:
The Dow closed down 104 points, or 1.0%. The S&P 500 closed down 1.0%. The NYSE Composite closed down 1.4%. The Nasdaq closed down 0.8%. The Russell 2000 closed down 1.0%. The DJ Transportation Avg. closed down 0.1%.
Markets this morning:
European markets have given up earlier gains and are now somewhat negative, down on average of about 0.3%.
Oil is up $.26 a barrel at 72.88 at the moment.
Gold is unchanged at the moment, at $1,143 an ounce.
In the U.S.
The week’s very light schedule of potential market-moving economic reports continues, nothing much at all in the way of reports again today. To see the full schedule click here, and look at the left side of the page it takes you to.
Our pre-open indicators are pointing to the Dow being up 10 points or so in the early going, not meaningful as to direction today.
Stock Market Patterns.
The ‘monthly strength period’ was due to end last Friday, and seems to have down so. This week is the week before this quarter’s quadruple-witching expirations week, and the week before tends to be negative, and has been so far.
The next pattern is that next week is the expirations week, and it tends to be positive, particularly if the week before is negative.
Interesting Chart of the Morning.
We had subscribers take our profits on the gold stocks on Nov. 25, just 5 days before the bottom fell out, and on the gold bullion etf last Friday.
Our next job will be to be back in in as timely a manner.
The XAU Index of Mining Stocks has been in a clearly defined short-term trading channel all year. Such patterns don’t often last this long, or as the old saying goes, they work until they stop working.
Please scroll down to see other recent ‘Interesting Charts of the Morning’.
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