Kuwait, Saudi Arabia and even the mighty Dubai are getting dragged down by the global economic turmoil.  “The global financial storm rolled across the Persian Gulf on Sunday,” reports the WSJ, “as Kuwait’s central bank guaranteed bank deposits and cobbled together a hasty bailout for one of the country’s largest banks.”

– Saudi Arabia, meanwhile, has announced it will pour $2.3 billion in loans to low-income borrowers.

– There are also signs of trouble in boom town Dubai. The WSJ reports that real-estate brokers there say they are seeing signs of “price weakness” there. We can only presume this is real-estate broker speak for “Nobody’s buying.”

– Over the weekend, “Dr. Doom,” aka New York University economics professor Nouriel Roubini, told The Times that the world economy was “at a breaking point” and that global stock markets are now “essentially in free fall” and “are reaching the point of sheer panic.” On Thursday, Roubini predicted hundreds of hedge funds would go bust and stock markets would soon be forced to shut down in order to stem the panic selling. On Friday, NYSE circuit breakers triggered a temporary halt on futures trading after futures droped 550 points. It was the first time the NYSE had to halt trading since 1997.

– U.S. stock futures are in the ditch again today. MarketWatch reports that “S&P 500 futures fell 34.3 points to 831.70 and Nasdaq 100 futures fell 43 points to 1,148.50. Dow industrial futures dropped 246 points.”

– Newsweek is calling it a “full-blown crisis.”

Last week seemed to be the nail in the coffin of “decoupling,” a theory that said increasingly savvy and solvent emerging markets would no longer march in economic tandem with more-developed nations. As the global financial crisis deepened, South Korea announced a $130 billion bailout for credit-starved banks and companies, Ukraine canceled elections amid a growing national crisis over frozen credit markets and a plummeting currency, and Pakistan asked the International Monetary Fund to arrange emergency financing amid the country’s worsening economic meltdown. All this came after a torrent of ratings and outlook downgrades by agencies like Fitch and Moody’s on former shooting stars such as India, Vietnam, Hungary and Argentina.

So much for emerging markets saving the world from recession.

– Bloomberg reports today that “equity indexes in India, China and the Philippines tumbled more than 6 percent, while Indonesia’s rupiah fell 4.4 percent versus the dollar, leading developing nations’ currencies lower.”

– Oil prices are at 17-month lows. A barrel of oil is now selling for below $62 a barrel in Asia, despite OPEC’s announced cut in supply.

– Gold is also down in Asian trader this morning as investors seek cash. Bloomberg reports that “gold for immediate delivery fell as much as 1.5 percent to $723.78 an ounce, and was at $725.28 at 3:22 p.m. in Singapore.”

– What worries us here at ContrarianProfits more than the rout in stock and commodities prices is the steadily growing belief that government intervention is the way to ‘fix’ the financial markets. The common wisdom, according to a great essay by Larry White picked up by the Cafe Hayek blog, is now as follows: “No. 1: Banking and financial markets are inherently unstable. No. 2: Government intervention into banking and financial markets can only stabilize (never destabilize).” In fact, says White, the opposite is true. “Over the broad sweep of history, banking systems with few legal restrictions have been more stable than systems with more intervention.”