We’re told now that hedge fund managers are shorting countries the way they used to short
companies. If so, then the Dubai debacle will be the first of several in the next few months.
It may be more accurate to say that some countries
have begun to resemble hedge funds themselves. Among the better known are Italy, Belgium and, increasingly, the UK, which
are incurring massive levels of debt almost as high as their GDP. Yet some countries, in the immortal judgment of Walter Wriston,
really are considered too big to fail. Dubai, perhaps not. Discounting the UK would be tantamount to discounting the US. This
would not be, to say the least, a very popular move. But the populists are chomping at the bit.