Dubai: is the news from the land which saw the ultimate property bubble a sign of a new crisis in the making, or just the dying calls of the last crisis?

 The Centre of Economics and Business Research says the crisis “highlights the fact that corporate problems tend to lag the economic cycle and many will reach the surface in 2010 and 2011 when bonds have to be rolled over or borrowing facilities renewed and the easy cash from running down inventories has been absorbed. In most Western economies, corporates have been repaying debt over the past 12 months. This will be less easy in the coming 12 months; with downward pressure on profits as inventories are no longer being run down.”

It does seem that the problem in Dubai is a delayed effect from the credit crunch. It has nothing to do with bubble mark II, as some seem to suggest.

But it does show how there’s still a lot going on in the background. With the threat that some countries may default on their debt, namely Greece, Ireland and Latvia, with fiscal policies set to be reined in, the fight for economic recovery has only just begun.