Good question. One would think a story by a supposededly leading finanacial paper like the WSJ would answer that question. Interesting that it doesn’t.  Sherlock Holmes always paid attention to what he didn’t hear, ie, the dogs that didn’t bark.

Googling for international info yields a bit more than the Murdoch propaganda sheet story.  An article in the Guardian refers to bad real estate debt.  An article from India does the same.  (Why is Truthdig printing the Murdoch propaganda rag’s half-useful story?)

It appears that Dubai is a part of the UAE that doesn’t have much oil.  The people there were making money via real estate speculation and a big building boom there.  They were also counting on a sister oil-rich emirate to bail them out, which didn’t happen because of internal disputes apparently over a quid-pro-quo that the guys with money didn’t get.

All in all, Dubai made the classic mistake.  They invested in a speculative real estate market using borrowed money.  It worked just as well as the guys on TV who used to tell you how to buy houses with no money down said it would work .... right up until the real estate markets crashed.

Why in the hell is dubai in financial trouble? THIS IS the country where a lot of the
major american corporations have fled to keep from doing their financial
participation in america, in other words, leave the u.s. to keep from paying taxes
or just being a financial part of america but still dictate and control what is
beneficial to them(more profits less costs) via the their lobbyists, oops extortionists.

But I guess even dubai is feeling the effects of what the lousy american corporations have done to the u.s. so, dubai, how do you like halliberton?