When Dubai World announced late in November that it wanted a six-month delay on payments on $26 billion in debt, the financial markets were thrown for a loop. The Dow Jones Industrial Average fell 155 points, or 1.5%, European stocks dropped and oil prices plunged. The Dubai story is still unfolding -- the emirate's stock exchange fell for the third consecutive day on December 9 after Moody's downgraded the ratings of six government-linked companies. Though some investors believe Dubai does not provoke as much fear as other corporate collapses over the past couple of years, Wharton professors point out that the world economy could face serious problems if similar financial troubles spread to European economies such as Greece.
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