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Pisani: Credit Issues, China & Dubai Again

Credit issues, China continue to weigh on markets.

1) Greece: Germany balks on aid. Angela Merkel, the chancellor of Germany, is said to have made it clear she wants to see reforms in Greece before loans are committed, and especially before any form of guarantee for Greek debts (another possibility under discussion).

EU finance ministers will be meeting next Tuesday to work out the details of a plan should aid be needed.

2) China's strange stew: 10 percent GDP growth, but property price bubbles, high vacancy rates. China again raised its bank reserve requirements to slow lending. Much of the bank lending spree went into property development, which boosted commodity prices but created a dramatic rise in property values and very high commercial vacancy rates. The results: lots of talk that property price drops are coming.

3) Dubai: CDS widen. This is a continuation of the whole Dubai World saga. The main issue: they never came out with a restructuring plan. Recall that in December, the Dubai government got $10 billion in aid from Abu Dhabi. That got the story off the front pages, but no restructuring plan has surfaced.

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