What a turkey. I am, of course, referring to Dubai. The oil-rich nation-state-kingdom (blame my social studies teacher for my failure to know what an Emirate is) has had to take a break from converting oil into gold plated island resorts. Apparently, issuing massive amounts of debt to fill out a giant real estate boom, premised on the idea that property values never drop, is a flawed strategy. Who knew?

Bloomberg reports in Stocks Tumble, Bonds Rally on Dubai; Credit-Default Swaps Soar:

Dubai World, the government investment company burdened by $59 billion of liabilities, roiled markets around the world yesterday by seeking to delay repayment on much of its debt. The dollar’s slump prompted Finance Minister Hirohisa Fujii to say Japan’s government is watching currencies “very closely,” while traders said the Swiss central bank sold the franc after it climbed to the highest value against the euro since June.

…

Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the first global recession since World War II. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG.

It will be fun to watch the US markets decide how to digest this “fowl” bit of news tomorrow.