Dubai

Reverberations across the world. When the tide rolls out, apparantly you find out who has built sand castles in the ocean.

Expect capital flows to stampede back into more stable jurisdictions.

“Dubai is the most indicative of the huge global liquidity boom and now in the aftermath there will be further defaults to come in emerging markets and globally,” said Nick Chamie, head of emerging-market research at Toronto-based RBC Capital Markets.

Stocks, bonds and currencies fell across developing countries. The MSCI Emerging Markets Index of stocks dropped 1.1 percent, led by declines in China and Russia. South Africa’s rand weakened 1.3 percent against the dollar and the Turkish lira slumped 1.1 percent. Hungary’s forint lost 1.2 percent per euro. Credit-default swaps on Russia increased to 206.5 basis points from 192.