Hush... Hush...

Hush... Hush...
If you have not heard by now Dubai hit a proverbial bump in the financial road... According to sources, Dubai has asked creditors to forestall a 60 billion dollar loan repayment scheme until spring. This really wasn't new news. The story was out on Tuesday to be exact. And there was little to no reaction that day. So the day before Thanksgiving, I flipped on Fox News, and there was a heightened sense of fear with Dow Futures indicating a 232 point drop at the opening.

China was first to react by claiming the Chinese creditors had little to no exposure.. or should we say minimal exposure to Dubai... Later, banking analyst sensation Dick Bove followed suit claiming that U.S. financial interests had little exposure to Dubai as well.

This leads us to the next point. Maybe just maybe international banks do have less exposure to Dubai. But no one is asking whether Dubai has exposure to our markets. For instance, Dubai's sovereign fund was specifically mentioned in the bailouts of Citi and MGM's City Center in Las Vegas. Is there a correlation? I don't know but let the record state that something it rotten in Dubai... and I believe it is their investments in a few American interests. If this is the case, the specter of systemic risk will again rear its ugly head just when we thought the markets were well on the road to recovery.

Hush, Hush, Helicopter Ben and Tim Geithner will undoubtedly knock on the right doors to keep our market floating. However, Ron Paul's push to audit the Fed easily made it out of conference committee, and will soon head to the House floor for a formal vote. This alone could do a considerable amount to rattle financial markets. However, I am certain the Senate will derail this bill. Come what may, the Senate is not as closely linked to the citizenry, and that will make it much easier to ignore a reactionary movement on Main Street, and bow down to pay homage to the powers that be on Wall Street.