The story so far: Dubai World, the main driver behind the massive construction boom in the emirate of Dubai has found itself unable to repay $61.6bn of debt on time and asked for a 6 month "stand still".
Property in Dubai has crashed 60% since 2007. Construction has stopped and the hi-tech workforce is leaving. There are rumours that credit checks are being performed at the airport and people trying to flee debts are being hauled off to jail. (Hint: It's an easy drive to Abu Dhabi, folks!)
Normally this blog wouldn't give a damn about Dubai. It was built on sand and to sand it will return.
However, bad news, seems like a lot of the debt came from British banks, and worse, not just the bad banks the government already owns, but the good banks we thought were safe. HSBC is in the hole for $17bn or possibly more, Barclays has an undisclosed liability; and not disclosing the liability is the worrying factor.
Looks it might be time for the UK taxpayer to dig deep again.