Dubai Dubai Do

"You reap what you so. You have heard of this, no?"

--Nasir (Kingdom of Heaven)

Dubai's default on nearly $60 billion in debt found most overseas mkts down big last nite and has clipped 2% or so from major domestic indexes so far this am. Should serve as a reminder that debt/credit issues have not disappeared--rather they've been papered over and in hiding.

It's easy to wonder this event reverses the dollar carry trade and the speculative trends it's fostered. Toddo offers a few scenarios.

Also interesting is that this event occurs on a thin and abbreviated holiday session here in the US. The tape should be susceptable to muscle in either direction. Indeed, it looks like they're trying to take 'em higher out of the gate.

Will be interesting to see where this winds up.

position in SPX, USD