It has almost become legend in London Underground parlance, “mind the gap”, meaning that commuters should move with caution as they enter the train to avoid an accident on the platform.

This phrase “mind the gap” applies as well with what we are dealing with in Dubai and the UAE overall. Comments, many complain, have tended to be either inconsistent on the one hand or contradictory on the other.

That again was the experience in the last 48 hours, when the central bank of the UAE said it would offer liquidity to the banking system to all domestic and foreign banks with operations in the Emirates. The move was designed to avoid a run on institutions by depositors and guarantee there are ample funds available if the need arises. It went over well and indeed there was no panic.

Twenty-four hours later, we were on the receiving end of a statement by a hitherto unknown official from the Dubai Department of Finance Abudulrahman al Saleh who said the investors and lenders may have to shoulder the responsibility of their actions.

To be precise, he noted that Dubai World “was set up on a commercial basis and not guaranteed by the government.” The statement was crystal clear, that buyers or in this case lenders should beware. Nothing wrong with that approach if it is telegraphed in advance, but in this case -– having spoken to a number of bankers and others involved in the process –- it was not. This, one London veteran of the Middle East said, “is not the way to rebuild confidence.”

When covering the region one learns to put various pieces of the puzzle together by working the phones, talking face-to-face over a coffee and then completing the picture. In this instance we are not there yet. Some would contend we are still a way off.

The chairman of the Supreme Fiscal Committee of Dubai and Chairman of Emirates Airlines, Sheikh Ahmed bin Saeed al Maktoum is the man calling the shots right now as he and his team comb through the assets of Dubai World and the other “Dubai Inc.” entities. The people I spoke to over the last 72 hours expect more clarity by Wednesday.

In the meantime, bankers who have lent an estimated $123 billion to the UAE overall, 70 percent of that from European banks, might feel they too need to mind the gap.

My wife invested a tidy sum more than a decade ago in five Chinese companies – and then forgot about it. When going through some paperwork, she rediscovered her investments and learned they had grown five-fold in value by November, 2007.

Our awareness of the investment, however, weighed on us during the calamitous events of 2008 as we watched, month-after-month, the value of the stock slide until we couldn’t take it anymore – in January this year, with the value just 20 percent up from her original investment, we cashed out.

From my previous reporting on behavioral finance, I knew that in the long run the smarter move would be to keep the cash in the market. But an surprise pregnancy and the unplanned expenses (to counter the unplanned joy) made it a straightforward decision for us. At least, we were getting out while we were ahead.

And then I’ve watched the Chinese stock market roar back to life, with year-to-date gains on the Shanghai index alone reaching 90 percent in August.

Doh!

What can I say – we’re human. And as humans we have a nagging propensity to sell low and buy high.

According to behavioral economist, our natural “fight or flight” impulses that kept us alive in the jungle often make our investment portfolios dead meat.

A buy and sell of a stock on a single day is a virtual coin toss: investors have a 50.2 percent chance of making money, investment counselor Philippa Huckle once told me. The longer investors hold, however, the chances of profit expand exponentially: there is a 70 percent likelihood of earning a profit holding for 18 months. Hold for five years, odds increase to a 95 percent probability of positive return, she said.

Yet despite this knowledge, our patience for investment is slipping: from 1984 to 2000 the average stock buy was held for two years and seven months; by 2004, the average slid to two years and two months.

According to Dalbar Inc., a financial research company, a $10,000 mutual fund investment in 1985 left to sit without withdrawal would be worth $95,000 in 20 years, despite losses suffered during the 1987 market crash, the 1997-98 Asian currency crisis and the technology implosion of 2000.

One interesting fact from behavioral finance research helps explain why we dropped that forgotten Chinese stock once we became aware of it – loss aversion. Research shows that investors “feel” the loss twice as much as a similar gain: In other words, the experience to lose $1 ,000 twice as intense as the pleasure of a $1000 gain.

Watching the stock drop month-after-month became too much to take, and we – like a lot of other investors – wanted that pain to go away. And it cost us.

Now I’m trying to forget that, too.

Driving around the Chinese town of Yi Wu, my crew and I were listening to the radio when an ad came on encouraging listeners to trade in their old TVs and washers for new ones.

"You can get a 13-percent rebate!" the speakers blared.

The government is going all out to promote its rebate programs and get its citizens spending. The manager of Xin Hong Electric, a store selling electronics and appliances, told us his sales were up as much as 30 percent. Not only can Chinese get discounts on new refrigerators, dryers or microwaves but cars too. Car sales were up nearly 80 percent in October compared to a year ago, driven in part by tax breaks and China's version of the U.S.'s "Cash-for-Clunkers" program. China is expected to overtake the United States as the world's biggest car market this year.

At Xin Hong Electric, I was struck by how many people were taking advantage of the rebate. We met up with a paper fan maker who had just bought a new fridge to add to his recent purchases: a TV, an air conditioner, a washer, and a microwave. He told us he had wanted to upgrade his appliances, anyway, and thought, why not do it now and save some cash?

That savers' mentality is said to have contributed to the imbalances in the world economy. Americans have been taking on too much debt and overspending, while Chinese (and certainly many other consumers in Asia) have been saving for a rainy day. Many economists say the government trade-in programs have had some success, but getting Chinese to feel comfortable spending will take a lot more work. They say the government will need to improve its retirement and health care programs so that people don't have to worry as much about paying large potential medical bills. The bottom line is consumers need to feel confident enough in the future to open their wallets today.

How confident are you in your home country's economy?

The old adage, “timing is everything” certainly rings true with the request by the Dubai Government for a standstill on payments by Dubai World for a period of a half year.

Investor confidence in Dubai, exemplified by developments like the palm islands, has been shaken.

As timing goes, it was curious at best, coming just before the Eid el Adha holidays in the region and the long Thanksgiving break in the United States. Adding to the intrigue is that Dubai successfully raised $5 billion in a bond offering taken up by two Abu Dhabi government controlled banks the same day

This left investors scratching their heads wondering what the motivation was. I spoke to a number of fund managers and bankers with investments in the Emirate and, like most politics in the region, there is more to it than meets the eye.

As one fund manager said,  Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Prime Minister of the UAE, is playing hardball. He is out to “teach a lessons to his boys.” His “boys” are the names which have become well-known power brokers in the build up of Dubai Inc. over the past two decades.

It has been a busy week for Dubai Inc.

Sheikh Mohammed cleared out his advisory board at the Investment Corporation of Dubai and pushed out the respected head of the Dubai International Financial Center who also served as Vice Governor of the UAE Central Bank.

The names on his advisory board included Sultan Bin Sulayem the Chairman of Dubai World and its property arm Nakheel. This I am certain was not an easy move by the Ruler.

Dubai’s rapid development was closely linked to the Palm and World property developments. I am sure we have all looked at their images offshore on Google earth at least once. Dubai World was also the force behind the high profile dust up in Washington with the P&O ports buyout.

Many I spoke to believe Dubai World is being singled out for good reason. Of the total $80 billion debt on the books, $59 billion of that comes under its leaky umbrella.

In fact, others within Sheikh Mohammed’s inner circle seemed to think it is only right for Dubai World to clean up their books like everyone else has been asked to do. That task is underway today with the help of accountancy firm Deloitte.

The other question being raised amongst global investors is the level of bench strength for Sheikh Mohammed or who he is turning to during this shake-up. Names at the forefront today include Mohammed Ibrahim Al Shaibani, Director-General of Dubai Ruler's court and Ahmed Humaid Al Tayer, Governor of the Dubai International Financial Centre.

They were in Sheikh Mohammed's delegation during this week’s visit to London and the response to their moves has been positive so far, according to bankers and investors I spoke with.

There is a sense of irony after what has gone on this week. British Prime Minister Gordon Brown congratulated the Dubai ruler for the actions taken to respond to the debt challenges during the bi-lateral meeting. It is something the PM knows a great deal about, with U.K. government debt soaring to 12 percent of GDP.

That nod of goodwill came before Dubai’s request for a standstill agreement, and left investors wondering what is next.  As one regional economist said this was a “disappointment in a way.” Dubai Inc. had cleared all the hurdles on the path to recovery but appears to have stumbled on this one.

We’ve all heard the old tale that if you invested $10,000 in Microsoft when the company went public in 1986, today you’d be a multi-millionaire. We think back to when oil was trading at $30 a barrel, and ask ourselves why we didn’t get into the action. Or, look at the price of gold. Why didn’t I invest a bit just a few weeks back? We kick ourselves.

But actually making these investments is of course easier said than done. Because when we’re faced with investment decisions, it’s not that simple. People are comfortable with different levels of risk. And finding out where you stand within that spectrum can be challenging.

On this week’s Biz Clinic, we sampled a series of these tests designed to gauge your stomach for risk.

The following are some from a test put together by professor at Rutgers University:

In general, how would your best friend describe you as a risk taker?

1. A real gambler
2. Willing to take risks after completing adequate research
3. Cautious
4. A real risk avoider

You are on a TV game show and can choose one of the following. Which would you take?

1. $1,000 in cash
2. A 50% chance at winning $5,000
3. A 25% chance at winning $10,000
4. A 5% chance at winning $100,000

When you think of the word "risk" which of the following words comes to mind first?

1. Loss
2. Uncertainty
3. Opportunity
4. Thrill.

Take the full test if you want to get a clear picture of your appetite for risk.

While I was skeptical, the tests can be helpful. One independent consumer survey broke down a possible investment strategy for me. Another suggested a mix of aggressive mutual funds, with bonds. I was told I had a “moderate risk tolerance.”

They helped put my level of risk in perspective. And they got me thinking of another question you might ponder:

A Harvard-dropout has started a relatively new company that could revolutionize the way people use personal computers. You could make millions in the long run. But right now, he needs $10,000. Would you fork over the cash?

The Dubai Air Show was not a glamorous affair.  When one points to regional orders from Algeria and Ethiopia to mark the highlights for 2009, there is a slight disappointment to be candid.  The total tally tells a similar story, some $5 billion of firm placements vis-à-vis $155 billion from just two years ago.

In comparison to the state of the industry in Europe or America today, the result however was impressive.  We interviewed the CEO of low cost carrier Jazeera of Kuwait and asked him why profits were down 53 percent over the same period last year.  The German executive Stefan Pichler replied in a matter fact fashion: at least we are still making money.

I believe it serves as a good microcosm for the region in general as it searches for the bottom of the crisis.  Businesses are not witnessing runaway growth, but they do see light at the end of the tunnel.  For example, the big brand carriers in the region, Emirates, Ethiad and Qatar are not cutting back their original commitments, only stretching them out if necessary.  It is worth noting that the carriers seem less concerned about posting profits right now, but building out their brands and their market share.

With oil trading around $80 the scope to build off the foundation recently put down is there.  Sheikh Ahmed bin Saeed Al-Maktoum chairman of Dubai’s Supreme Fiscal Committee and Emirates Airline told us that the second half of the $20 billion government bond package should come by the close of the year.  If so, and if there are buyers beyond the UAE central bank, it will be an important indicator.
 
I chaired a forum of business leaders in London this week and found that most believe a firm floor is being put on this economic recovery in Europe as well.  Germany, France and Italy are growing again, albeit all below one percent in the last quarter.  Spain and the U.K., both overly dependent on the property sector, are suffering under the weight of their budget deficits.  It is a similar script being written in the United States. 

But there was categorically a belief there won’t be any hidden surprises, with an important caveat that policymakers may be already planting the seeds of the next financial crisis – in sum too much money thrown at the banking system that will eventually fuel inflation.

Meanwhile, the energy surpluses continue to fuel investments on European soil.  The relatively new investment arm in Abu Dhabi is moving swiftly post-F1 to raise its profile, buying Brawn Grand Prix with partner Daimler.  It also plans to raise its stake in the German industrial group to 15 percent.

Qatar is choosing to continue its investment advances in London.  There is active talk the QIA wants to raise its stake in grocery chain J. Sainsbury and after the Americans leave the posh neighborhood of Mayfair, Qatar will take ownership of the current site of the U.S. Embassy.

These investments may not raise the GDP figures in either Germany or the U.K. but do help us in our search for the bottom.

Looking back on this year to early March, you'll find the precise point when the U.S. stock market seemed to find its bottom. The Dow has had a tremendous rally since then, but just about everyone is concerned about what it means.

Dropping commercial real estate values is leading fears of a double-dip recession.

Does the recovery lack any real support from economic fundamentals? It is jacked-up on stimulus programs that governments will soon try to unwind– and with what consequences?

Many analysts argue that the consequence will be the dreaded double dip.

As Mark Zandi, chief economist for Moody's Economy.com, told CNN Money this week: "If we do slide back into recession, it will be very difficult to get out."

Some economists are so concerned they want another round of stimulus early next year because the U.S. labor market is still so weak.

About two months ago, I sat down with Steve Palm of "Smart Numbers," a Real Estate analysis company. He feared that so many commercial developments and large housing projects were defaulting it all but assured a double dip sometime in the middle of 2010. It was a dire prediction that stuck with me.

Checking back with him this week, I am sorry to say that the situation from his vantage point is no better. Palm still sees "Way too much stuff coming back to the banks." "This is causing poor liquidity as the banks still cannot lend. The dollar is way too weak too."

Small regional banks continue to go under across the United States. Most of them are going down because of foreclosures on large commercial real estate ventures. Palm sees no end in sight, and fears that if unemployment keeps mounting and housing indicators start falling again, it will be ample evidence of the "W-shaped" trend that analysts say signals an imminent double dip.

The bankruptcy rate further complicates how to gauge this recovery. As unemployment drags on and home values continue to suffer, personal bankruptcies surged 9 percent in October, with a 7 percent jump in business bankruptcies. The American Bankruptcy Institute also expects total bankruptcies in 2009 to reach almost 1.5 million. That's an increase of 30 percent from last year.

Analysts say given all of these factors, the way governments unwind the current stimuli will be key in determining whether the recovery is sustainable, or whether it slides once again. How will we know? CNN Money.com has a great primer on six key indicators to watch if you're concerned as well.

How to protect our own investment portfolios in 2010 is something we should all be discussing. Stay tuned for more on World Business Today.

How do you find the right financial advice? First find the right financial adviser. CNN's Andrew Steven's reports.

In an special Web exclusive, an extended chat with John Gannon of the Financial Industry Regulatory Authority on sussing out the best financial adviser.

After only a year on the ground in Europe as a young twenty-something correspondent, I was thrust into coverage that one knew was not only historic but would have grand implications for years and even decades to come.

I landed in Berlin two days after the fall of the Wall, but was fortunate enough to cover the IMF/World Bank meetings the year before in the same city.  While the institutions are often criticized for not having their finger on the pulse, in this case they were well ahead of the curve on how events were going to unfold.

During those meetings, I ventured over to East Berlin to experience for myself the impact of the communist led economy.  On countless occasions I was approached with whispers in my ears to swap dollars for East German marks on the black market.  Border guards snapped photos of western visitors like me for their files knowing full well that this cat and mouse game was drawing to a close.  One could only describe the experience as grey – from the look on East German faces to the buildings themselves.  

That visit helped me draw a clearer “before and after” picture.  Immediately after the Wall fell, West Germans embraced their neighbors, welcoming them in from the cold.  That euphoria quickly faded when it came to paying the bill for reconstruction, welfare payments and years of double digit unemployment.

The political impact of the fall of communism has been well documented, but what has often been left out of the discussion is the economic domino effect that it triggered.  First and foremost, East Germans were not willing to accept the original 5-1 exchange rate for their currency, nor the 3-1 that was quickly offered.  They demanded parity and within two short weeks received it from German Chancellor Helmut Kohl.  The move cost a fortune (an extra $50 billion) but in an historic context, the Chancellor made the right call.

Events were transforming so quickly, governments had difficulty keeping pace with change: German monetary union, the first all-German elections and fast on its heels the creation of the European single market – project EC (for European Commission)
1992. 

Perhaps because we have the benefit of hindsight and experience, the leaders two decades ago seemed much better equipped, despite fears then of German dominance.  Chancellor Kohl, Francois Mitterrand and Margaret Thatcher were the forces to be reckoned with.  They were pushed and prodded along by European Commission President Jacques Delors who drafted up the blueprint for greater expansion of the EU. 

They were thinking big at the time, you could sense that from the summits we covered.  Despite internal fears and haggling that took place, they eventually delivered on their promises.  The Euro is now a major force in global currency markets; the EU is home is 27 countries (albeit with a tinge of expansion fatigue) and it is a market of a half billion consumers. 

Have reforms happened fast enough?  The answer is clearly no.  Is there an issue of illegal immigrants flooding in still through Eastern and Southern Europe?  Ask those who live in Malta, Spain, Greece and Italy.  And are the more mature economies of Europe adapting to increased competition after the lowering of trade barriers?  Candidly no.

But if one takes a step back, many who doubted the decisions in 1989 and the years to follow must now say the European response and development post the fall of communism has been much more successful than originally thought, minus the labor reforms which today still hold back opportunities for the next generation.

SINGAPORE – The talk was about global rebalancing. U.S. President Barack Obama arrived in Asia on his first official tour, talking about a "rare inflection point in history". A time where "we have the opportunity to take a different path." A chance to rebalance the model where Asia consumers consume more and US exporters export more.

Chinese President Hu Jintao was among world leaders at the APEC summit in Singapore.

APEC leaders fully endorsed the strategy; virtually every economy in the world does. But look inside the APEC meeting in Singapore, and see the problems of turning this into reality. One of the biggest may be China.

More than two years ago, China began to allow its currency to appreciate against the dollar. By the time the financial crisis exploded, it had risen in value by about 20 percent. The crisis was the signal for China to freeze the exchange rate there at about 6.83 to the US dollar.

That was a year ago. Even China's Asian trade partners are now worried that the Chinese yuan is undervalued against the sinking dollar. So one of the key issues in Singapore was to put subtle pressure on China to unfreeze its currency.

Finance ministers talked about flexible exchange rates, the APEC leaders were expected to talk to about "market oriented" exchange rates - all aimed at prodding China to become a little more "market oriented" in its own exchange rates.

But by the end of the gathering, all reference to market-oriented exchange rates in the final statement from leaders had been erased. There had been debate behind closed doors between the U.S. and China about the statement. In the end China appears to have won out.

The message seem to be China will move only when its ready. And for all its newfound goodwill and push for re-engagement, there's not much the U.S. can do about that.