(Thumbnail image: Sky News)

“In its heyday, Dubai seemed like a Las Vegas of the Persian Gulf, a boomtown that built man made islands so enormous they are visible from space.  And the world’s tallest building, still under construction. It was all financed with borrowed money from around the world but the one-two punch of a global recession and a local housing crisis that evaporated up to 50 percent of real estate value dried up credit and left Dubai with enormous debt.” (CBS News)

Dubai World – the investment arm of the Dubai government – announced it would be asking for a six-month postponement on its debt payments. The message sent shockwaves through world economies and had investors running for security.

We’re looking at coverage on what this all means from CBS News, The Wall Street Journal, NBC News and Fox Business.

CNBC’s Erin Burnett tells NBC News what this could mean for the future of foreign investing in the Middle East.

“In off the record frank conversations, Ann, they’re concerned about something. They think this could really be a step back for the Mid East, becoming more secretive as opposed to more open to investors. And one thing here, the ruler actually replaced some of the business leaders with his sons, so that could be an ominous sign.”

A reporter for The Wall Street Journal points out that this would be seen as a much bigger deal, but it comes on the heels of a global financial collapse.

“I think the experience of Dubai is an interesting metaphor for what’s going on in the markets overall. We lived through such a calamitous period a little over a year ago that as humans we adapt psychologically. If you’ve lived through WWII, for instance, and the Suez Crisis happens, relatively it can be contained and managed.”

CBS News points out that the Dubai incident is unsettling for investors.

“European banks may bear the brunt. They’ve lent close to $84 billion to the United Arab Emirates, which Dubai is a part of. For this to come out of the blue, I think it raises the specter again that maybe we’re going to go in to the credit crunch part two.”

But FOX Business says the crisis is being over-hyped.

“I think the message that a lot of people are trying to get across today is that at least for Americans, or even the world for that matter, this is not as big of a deal as everyone is making it out to be. Yes, Dubai is important.  But first of all, it's only a property arm of Dubai called Nukeil that is really suffering the most, and of that debt that’s about $3 billion compared to $59 billion pocket.”

So how big of a deal is the Dubai debt crisis?

Writer: Allison Bennett

Producer: Meg Burcke