Investors can tell a bubble when they see it, but we must consider that hindsight is 20/20 in these situations. And perhaps investing in a bubble is okay, just as long as you get out at the right time?

A lot of the press makes this look like the end of the world. I don't want to make a hasty comparison, but let's contrast it to the $700bn dollar bailout that we saw earlier in the States .. $60bn exposure isn't quite as bad as it seems.

The question is in underlying value. Aside from the world's speculation and the good word of the ruling family, there isn't so much backing Dubai. AFAIK, nobody owns a huge share of the markets, just the royal family.

At the same time, it doesn't take much to apply some startup thinking to Dubai -- put a couple people together with some good ideas on how to shape the markets there, and Dubai could look drastically different 24-36 months from now. Islamic Finance could be an interesting starting point.

Dubai will be very interesting as soon as all of this smoke clears up.