Uh Oh

Dubai World, the state-owned company that has been borrowing like crazy and building artificial islands, fantasy structures, and other projects to convert Dubai into a kind of vacation wonderland, has announced that it will not be making interest payments on its loan debt.  In other parts of the world, where the markets aren’t closed for the Thanksgiving holiday, the reaction apparently is panicky and some banking stocks are getting hit hard.

My guess is that traders everywhere are still jumpy after the near meltdown that happened last year, and any sign of possible significant default by a big borrower is going to make the markets especially nervous and curious about on whose balance sheets the eventual liabilities may land.

Black Friday

I’m not quite sure when the day after Thanksgiving started to be called Black Friday — apparently because, for many stores, their sales on that day are what first pushes their year into the black — but I know that the day after Thanksgiving has been the unofficial start of the Christmas shopping season for decades.  It has now become institutionalized — there is even a website the features only Black Friday ads.

I imagine that this year Black Friday is getting even more attention than usual.  Economists, analysts, and forecasters will want to find out whether people are shopping at all, and if so where and for what.  In our consumer-driving economy, if Americans aren’t diving into the Christmas shopping season with gusto the talking heads will say it shows a “lack of consumer confidence” and signals a longer and perhaps deeper recession.  There is something to this line of reasoning.  You can do all the surveys you want about consumer confidence, but whether people actually spend money during the season of spending is the best, most tangible evidence of what they actually believe about their own circumstances.

It is 8 a.m. as I post this, and many stores have been open for hours already, hoping to lure shoppers with special deals.  For all I know analysts already are crunching numbers on the crowds that have shown up at stores.  They shouldn’t draw any conclusions from my behavior, however.  I don’t like shopping, and I think going to shop in crowded malls the day after Thanksgiving would be a very unpleasant experience, whether the economy is weak or going great guns.