There seems to be a lot of misconceptions floating around about Dubai's announcement last week and the panicked response to it in global markets, so I feel compelled to take a break from my holiday in a nation that really did run up against the wall financially, Bulgaria, to try to offer what I hope will be a few helpful thoughts on the subject.

First off, there's been a lot of consternation among some readers about The National's initial coverage of the event on Wednesday. True, we failed to convey the potential shockwaves the news would have outside the UAE, largely because the UAE is several time zones ahead of London and New York and so our deadline passed before the reaction had really reverberated. The news also broke late in the day, which meant most of the few hours we had were spent trying to decipher the very brief announcement and gauge the shock wave the news was creating among those few people who hadn't left the UAE for the Eid holiday. It would have been great if we had had time to look further abroad and discuss the potential international fallout on Wednesday. It would have been nicer if Dubai had done the same on, say, Tuesday.

Some have criticised our coverage for downplaying the impact this would have on foreign creditors, who were reportedly "up in arms." Creditors are up in arms whenever a borrower suggests not paying up as agreed. So that is arguably not such surprising news. Taxpayers are up in arms about creditors getting bailed out for losing money making bad loans. La plus ça change...

Lost in the hue and cry over the supposed "Dubai debt crisis" is that Dubai has yet to miss a single bond or loan payment. Bankers I speak to in Dubai are somewhat peeved on this point, accusing the press of having overlooked this simple statistic. Despite all the sturm und drang over Dubai's supposed difficulties, the government and the companies it controls have paid every penny due to creditors so far. Contractors, of course, haven't been as lucky.

The Nakheel sukuk is due Dec. 14 and Dubai has expressed its intention to ask for a six-month extension on Dubai World's debts, in particular that Nakheel sukuk. Clearly, this is not what anyone expected. Judging from the price of Nakheel's sukuk the day of the announcement, its repayment was considered a virtual lock.

If Nakheel does not pay on Dec. 14, with or without the agreement of its creditors, it will not represent a sovereign event. Nakheel's sukuk was never a government debt, never enjoyed the explicit backing of the government of Dubai and, if you want to get technical, never had a credit rating. Anyone who bought Nakheel '09s did so because they was paying a high yield to compensate them for the risk of doing so. Risk, for those who somehow missed the Great Financial Crisis of 2008-09, is risky.

Dubai's Goverment underlined this distinction in its bond prospectus last month, which analysts at Moody's determined was a signal to lower their rating on several Dubai issuers -- they could no longer be sure the Government would bail them out. Does this mean other Dubai Inc. borrowers will ask for deals from creditors? Who knows? We don't know what they're being offered by the Dubai Financial Support Fund or why the DFSF decided to ask Dubai World's creditors for a deal. Would greater transparency about the DFSF's criteria and agreements with Dubai Inc. companies have helped avoid all this mess? Absolutely.

Another seeming misconception is that if Dubai World misses the Dec. 14 Nakheel payment that somehow banks it owes money will suffer a debilitating blow. Most of the banks that lent Nakheel money, if they were smart, started provisioning against it when Dubai credit default swaps jumped over 1000 basis points earlier this year. Those that didn't, well... The same goes for bondholders. Many very likely bought their bonds much recently at a discount and may actually still be sitting on a paper profit. Those would seem to be crocodile tears shed by investors in this latter category.

Another puzzler is the worry that Dubai's move stands to trigger a crisis among other sovereign borrowers in emerging markets. Not only is Dubai World not a sovereign risk, but Dubai is only a sovereign only in the way that California is a sovereign. Dubai cannot print money. Only the UAE Central Bank can do that. Other central banks may face a balance of payments crisis but there is no such risk in the UAE. Not only that, but many emerging-market borrowers enjoy massive current-account surpluses and accumulated currency reserves -- the kind of imbalances people have been complaining about for months as the dollar declines. Dubai doesn't. Others that don't are Vietnam and eastern European nations like Bulgaria that are already in the embrace of the International Monetary Fund.

The UAE's oil revenues go largely to the Abu Dhabi National Oil Company. Incoming dollars to go the Central Bank. Dubai's foreign-currency earnings, such as they are, are accrued largely to companies like Emirates Airline and DP World, a subsidiary of, you guessed it, Dubai World. This may explain why Dubai was careful to make clear that DP World has been carved out of the Dubai World debt restructuring.

So why the panic in global markets? Last time I checked it's the weekend after Thanksgiving, not exactly a day of robust trading activity in developed markets, in particular Wall Street. Smart money is still digesting turkey sandwiches. According to traders in Asia, markets are seizing on the "Dubai event" as an excuse to further close out dollar carry trades in emerging markets before the markets wind down for the holidays and because a lot of those markets were already looking a bit overbought.

A lot of economists, among them Nouriel Roubini, have been worrying out loud about a bubble in emerging markets, particularly in China. If Dubai is the event that has triggered the collapse of that bubble, then so be it. But strictly speaking, Dubai's announcement is still seems a far cry from the kind of events that triggered the Argentina debt crisis or the Asian financial crisis.