Dubai debt crisis is contained -- and hardly a surprise

After the world's experience with subprime lending, probably the worst call a prognosticator can make about a debt crisis is that it will remain "contained." So here goes nothing: Chances that the would-be deadbeats in Dubai will set off a series of defaults among emerging market countries seem very, very remote.

When Dubai World, the investment arm of the Disney World city-state, said it would miss a $3.5 billion bond payment (a fraction of its $60 billion to $100 billion in liabilities), emerging market stocks swooned and the U.S. dollar soared -- pretty much the opposite of the global reflation trade that has done so much to repair our battered 401(k)s. In other words, things were looking ugly.