News that a government owned property company in the Emirate of Dubai has asked for a moratorium on repaying its debts has spooked more than a few global financial marketplaces.

Wikipedia reveals the emirate’s main revenues are from tourism, real estate and financial services. All of these areas are, or have been, hard hit by the global downturn/recession/revaluation of asset prices*.

Dubai has been a place of conspicuous consumption for the recent past and the sort of place where footballers like to to buy second, or third homes. In that last link, The Times explains how these seemingly unrelated stories connect. The absolutely last paragraph in the story is worth reading.

AIG and Manchester United cartoon © Matt Buck Hack Cartoons

The BBC is reporting the story as a financial crisis in the ’middle east’ and this is true although it is important to remember that the global financial system is interconnected and there is a likelihood that debt default problems in Dubai will have unintended consequences on a much wider scale.

The cartoon is from March of 2009.

* Take your pick.