The credit problems of a unit of Dubai's state-owned investment company have given financial markets a scare, but put us down as thinking the event is left-over business from the mid-decade mania more than it is a sign of immediate new economic troubles.

On the other hand, the city-state clearly got carried away during the boom, and its property market in particular became a bubble as overbought as condos on the Las Vegas strip.

In the wake of Wednesday's request for a debt holiday, investors immediately put on their post-Lehman Brothers "contagion" hats and fled for safety. The otherwise sickly dollar rallied, while gold, oil and stock markets world-wide all fell. Nevermind that no one could say who except the creditors of Dubai World's real estate subsidiary would be harmed by the request for an interest-payment moratorium. European banks have nearly $84 billion in exposure to all of the United Arab Emirates, of which Dubai is merely one, while U.S. banks seem less vulnerable.

Stocks in particular have had an historic rally since March, and the Dubai debt blowup may have been the excuse investors needed to pocket some of their winnings and protect against a correction.