Best wishes to all and, next to world peace among people, we should hope for the same among world markets.

I have let some time pass before commenting on a recent example of how fragile a world we live in. This past year through a time of greater economic danger, fear and volatility than most of us has experienced in a life time, many people cannot fathom how close we came to the edge of Hades.

This morning, Bloomberg reported that the Abu Dhabi Investment Authority is attempting to get out of an agreement to purchase $7.5 billion of Citigroup (C) stock. According to the deal, the Investment Authority (ADIA) is to pay eight times Citi's current price. If the deal is forced through, it is seeking more than $4 billion in damages as it claims that Citi used "fraudulent misrepresentations" and misled it about the investment. Citi disputes the claims, noting they have no merit.

According to the report, ADIA invested in Citi in November 2007, getting equity units that could be swapped into common stock for $31.83 per share to $37.24 per share from 2010. On Tuesday, shares of Citi closed at $3.56 per share. Bottom line, ADIA is trying to avoid major losses in light of its agreement (made earlier this week) to provide $10 billion to Dubai World to prevent a bond default.

While the day after Thanksgiving in the US is usually a light trading day, thanks to people being on vacation, traveling, Black Friday shopping, and their being more concerned about being with family, today's market has been active with people reacting to recent troubling news coming out of Dubai.

Dubai, Wednesday, announced that it was asking to delay payment on billions of dollars of debt owed to Dubai World and Nakheel, a major developer in Dubai (you may remember those large palm shaped islands off Dubai for celebrities and the ultra-rich). Fear about Dubai writedowns has affected the price of oil, despite large supplies. Investors are worrying that the ripple effect of Dubai's debt problems will spread to other banks, creating another crisis.

Here were today's unofficial closing bell levels:

Dow 10,309.77 -154.63 (-1.48%)
S&P 500 1,091.47 -19.16 (-1.73%)
Nasdaq 2,138.44 -37.61 (-1.73%)

U.S. stock futures tumbled this Black Friday morning, as markets resumed trading after the Thanksgiving holiday only to join the world markets' selloff following the Dubai debt problems. With the markets open for half a day, only until 1:00 p.m. Eastern, trading could be thin, which may contribute to the downward move. For now, futures are indicating Wall Street is set to open sharply lower.

The news about Dubai's debt problems broke late Wednesday when the government of Dubai acknowledged it had asked its banks for a six-month stay on its schedule of debt repayments for two of its flagship firms, as they begin restructuring. Dubai World has liabilities of $59 billion, its subsidiary Nakheel said in August, a large proportion of Dubai's total debt of $80 billion. As markets were struggling to figure out what kind of exposure banks had to Dubai debt, banks outside the Gulf played down on Friday their exposure to Dubai debt.

Traditionally, sovereign wealth funds (SWFs) have focused on highly liquid investments, such as equities and bonds. But as these funds get bigger and bigger, the focus has been changing. In fact, some SWFs are moving into alternative investments and even buying up whole companies.

Take Dubai World, which is the emirate's SWF. This week, the firm teamed up with OAO Roskommunenergo (a Russian energy player) to bid $5.34 billion for OGK-1, which is a major electricity provider in Russia.

It's a savvy move. After all, Russia is in the process of deregulating the electricity market, which should come into effect by 2011. So there should be some pricing opportunities (keep in mind that prices have been held artificially low for decades).

Even so, OGK-1 has its challenges. Essentially, the company needs some serious capital infusions. But hey, that's something Dubai World can deal with handily, right?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MGM Mirage (NYSE: MGM) and Dubai World announced this morning they would launch a cash tender offer to buy back up to 10 million MGM common shares for $75 to $80 each. The companies' decision came on worries that an economic slowdown will lower demand for gambling. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MGM.

The stock hit its 52 week high of 100.50 in October and set its 52 week low of 59.74 in January. MGM opened this morning at $73.71. So far today the stock has hit a low of $71.82 and a high of $74.29. As of 12:40, MGM is trading at $72.43, up $2.45 (3.5%). The chart for MGM looks bearish and steady while S&P gives MGM a neutral 3 STARS (out of 5) hold rating.

Over the past decade or so, Dubai has placed big bets on its ability to become the world's top tourist destination. Now Dubai is taking its plans to sin city itself, Las Vegas. Dubai World, which is the investment holding firm of the Dubai government, has decided to invest $5 billion in MGM Mirage (NYSE: MGM) for a 9.5% stake.

In addition, Dubai World will also be getting a 50% interest in the yet to be finished CityCenter development project.