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Markets retreated in the past week despite the fairly encouraging economic readings, as the Dubai and Greek debt crises spread panic among the markets. Credit spreads widened in reaction to the developments due to fears that some of the big Western banks may have money involved. Downside risks to equities are now to the upside, as major banks may have to record big loan losses again even after they have attained a state of stabilization following the 2008 credit crisis.

The confidence vested on the embattled banks following the rescue packages announced by governments is at stake now. The Dubai crisis is a stark reminder of lurking fears over the health of the financial system.

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Warren Buffett became a buy and hold investor when his portfolio and positions became big enough, pushing $60 billion, when selling became a difficult undertaking. In his early career, before "Oracle of Omaha" became his middle name, he was a buy and sell investor. Being on the board of some of his biggest holdings (like Coke and Washington Post) made selling even more difficult.

U.S stock futures point to a sharply lower opening Friday morning, as traders are likely to react to the tumble in global markets over the past two days following the financial crisis in Dubai. State-run Dubai World, the conglomerate that spearheaded the emirate's breakneck growth, has sought a six-month "standstill" on its $60 billion debts with all lenders.

As of 6.15 am ET, the Dow futures were down 242.00 points, the S&P futures were down 32.50 points, and the tech-heavy Nasdaq 100 futures were down 52.25 points.

Traders will be digesting the impact of the financial crisis in Dubai World and the repercussions of the same in the major banks and other institutions that have exposure in Dubai World.