Giving Thanks To Dubai's Moment

Stocks Slump, Bonds Rise as Dubai Roils Markets today, according to Bloomberg ... and affected species are trying to get out.

Otherwise, I read wise words of Michael Pettis and think of consumption crisis and bank bail-outs in the West:

The low deposit rates mean that Chinese savers are effectively being taxed to replenish bank capital. Although this may be necessary in order directly to maintain the health of the banking system, it indirectly undermines the banking system in another way. By forcing Chinese households not only to subsidize China’s very low cost of capital for producers and SOEs, but also to protect the banks from the effect of economically non-viable policy loans, Chinese households are bearing a pretty hefty share of the cost of China’s investment-led boom, and it is these same households whose surging consumption will be necessary to absorb the increased production resulting from the investment boom.

Given the increased financial burden being placed on them, I doubt that they will be able to do so. After all, it is because of lesser versions of these same policies in the past that the enormous gap between production and investment exists in the first place. And if they cannot raise their consumption sharply to absorb all this additional excess production, the banks will be stuck financing rising inventory and unprofitable companies. It’s a vicious circle.

Here are couple of links for China lovers:
European Union Chamber of Commerce in China, Overcapacity in China: Causes, Impacts and Recommendations;
Yu Yongding at Australian Government, Productivity Commission, China's Policy Responses to the Global Financial Crisis;
Citi's Nightmare on Commodity Street

High stakes at make or break ...