Just as the smoke started to dissipate...the fire was re-lit. A debt-laden Dubai state corporation, Dubai World, has suggested it may need to default on its interest bill.
The panic and uncertainty was fuelled by the fact that it a national holiday in the Middle East and USA, celebrating Eid and Thanksgiving respectively.
Shares plunged; weak currencies were hit; and £14 billion was lost by UK banks. Speculation and low confidence was not helped when a computer crash at the London Stock Exchange stopped trading for more than three hours (!)
However, it has to be noted that these debt of $80 billion are just chicken feed in comparison to bank bailouts. Therefore, if British Banks like HSBC and Standard Chartered did have to write off their loans, it would not dent their balance sheets beyond repair. What will be burnt to ashes is confidence: investment in Dubai could totally dry up.
Although this disaster has taken place in Dubai, there could be major repercussions around the world. Not only have British banks lent to businesses in the Gulf, but Dubai owns lots of assets in Britain - from part of the London Stock Exchange to Legoland to Travel Lodge.
For now we just have to hold our breath and wait for their emirate brother, Abu Dhabi, to put out the fire.
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