The decision by Dubai World, Dubai's sovereign wealth investment fund, to delay interest payments on its $60bn of debt, has sent the global markets into a tailspin. But is it really the end of the world ?
Here's what the smart money's saying:
'The events in Dubai in recent days are one of the hiccups if you like, one of the difficulties, which affirms that we were right to highlight the uncertainty ahead of us, and that the road ahead could be a bumpy one'.
European Central Bank Governing Council member Athanasios Orphanides (Reuters)
'The market is very nervous about exposure to Dubai, and RBS's name has been associated with it as both a lender and a book runner. People are concerned it's going to produce a new wave of losses. Dubai is driving everything in the market at the moment'.
David Williams, bank analyst, Fox-Pitt Kelton (Bloomberg)
'We have seen a classic risk aversion reaction in the markets over the past 24 hours.....At this stage, this setback looks to be one that is very much country specific'.
Societe Generale analysts (Reuters)
'I don't think the collateral damage is going to be that great. People will dig into this over the weekend, but I think balance sheets have healed enough to withstand a shock like this'.
Jeffrey Saut, investment strategist, Raymond James (The New York Post)
'One cannot rule out - as a tail-risk - a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way Argentina did in the early 2000s, or Russia in the late 1990s'.
Bank of America analysts (The New York Times)
'If you look to government balance sheets around the world, you'll find plenty of potential banana skins. Given the nature of this crisis, the probability of further sovereign events remains elevated'.
Jim Reid, strategist, Deutsche Bank (The Times)
'The way the announcement was made, including its timing, has caused damage to Dubai's credibility. This will take a very long time to repair'.
Ghanem Nuseibah, senior analyst, Capital Policy Research & Consulting Institute (Reuters)
'While it is a setback, I think we will find it is not on the scale of previous problems.....I think global recovery has depended on monetary action and fiscal stimulus'.
Gordon Brown, UK Prime Minister
'We will look at Dubai's commitments and approach them on a case-by-case basis. It does not mean that Abu Dhabi will underwrite all of their debts,'.
An official in the government of the emirate of Abu Dhabi (Reuters)