A general view shows Dubai's Business Bay, still under construction.
A general view shows Dubai's Business Bay, still under construction. - 
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Tess Vigeland: At least retailers hope it will be a Black Friday, when their balance sheets go into the black for the first time all year. Hopes are dim of that happening. But before we head down to the mall, we're going to take a look at another promoter of profligate spending -- Dubai.

Fallout continues from this week's announcement that Dubai World, the government-run investment firm, needs extra time to repay its debts. It owes at least $59 billion to creditors. And there are now growing concerns that a wave of defaults could be on the way. The White House said today it is closely monitoring the situation. Marketplace's Jeremy Hobson has the latest.

JEREMY HOBSON: They may not admit it, but investors around the world are trying to figure out what previous crisis they should compare Dubai's debt troubles to. Is it another Lehman Brothers, for instance?

Johs Worsoe is head of global and wealth markets for Union Bank of California. He says it's not Lehman, or even the Asian financial crisis, in part because the risk is spread out.

JOHS WORSOE: The exposure is mainly with European banks, Asian banks, and a little bit Middle Eastern banks. The American banks probably don't have as much exposure to it here.

But even a little shock could shake the fragile recovery of the banking system. That's according to Simon Johnson, a professor of International Economics at MIT. He says the Dubai debt crisis will be all the motivation Fed Chairman Ben Bernanke needs to keep interest rates low for the foreseeable future.

SIMON JOHNSON: I mean Dubai World has run out of cash in a very low interest-rate environment, not able to roll over its debt even now, so imagine if interest rates were higher.

But before central banks around the world start developing policy based on this, Christopher Davidson says we should remember Dubai's size. He's the author of "Dubai: The Vulnerability of Success."

CHRISTOPHER DAVIDSON: It's not even a state, it's a member of a federation. The debt it has is very substantial, given the size of its population and the size of its GDP, but compared to other developed countries, it's a drop in the ocean.

Davidson says the biggest losers will be Dubai's neighbors and other emerging economies. He says investors are already punishing borrowers whose ability to pay back their loans are in doubt. Case in point: The price of insuring debt in Abu Dhabi and Qatar jumped this week.

I'm Jeremy Hobson for Marketplace.

Follow Jeremy Hobson at @jeremyhobson