More problems at work because of Dubai bond's default. Not because of direct exposure to their bonds and CDS but rather more because of HSBC pulling the HSI down. We are experiencing pretty big VaR moves all over the place due to panic selling. Whether there are more trouble than meets the eye? We still do not know. However, many of my colleagues are keeping their fingers crossed. Apparent from the comments, "Now is already the month of December, I don't want this thing affecting my bonuses!"
My opinion is that the default per se is not a big issue $80-90Billion may be large but not insurmountable. What I think is more important is the health of US consumers who are still in a balance sheet recession. Most probably they are taking the opportunity to stock up hugely on necessities during this Black Friday. The financial media as usual might again want to distort this as a sign of financial strength.
Lucky for me, sold out on my Capitamall Asia positions just before markets closed on Thursday, made some coffee money. Kudos to discipline of not leaving speculative positions over weekends. Experience has taught me that market sentiments can change at the snap of a finger. Didn't expect this Dubai issue to pop out immediately out of nowhere though.
Buying opportunity? Well, depends on the extent of correction that happens later. Given how US and Europe reacted, doubt there will be anything more than a small 3-5% move. As they say, bonuses coming up, thus window dressing season is in, doubt traders will be in the mood to rock the boat now.
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