So, today the Government of Abu Dhabi and the UAE Central Bank Abu Dhabi bails out, in part, Dubai World.

Here are key parts of the press release: “… Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World … the Government of Dubai has authorized $4.1 billion to be used to pay the sukuk obligations that are due today.

“The remaining funds would also provide for interest expenses and company working capital through April 30, 2010 — conditioned on the company being successful in negotiating a standstill as previously announced … the Government of Dubai is particularly focused on addressing the concerns of Dubai World trade creditors within the Emirate of Dubai … the remainder of the funds provided will be used for the satisfaction of obligations to existing trade creditors and contractors. Discussions with affected contractors will begin in short order … the Government of Dubai will announce a comprehensive reorganization law, a framework that is based upon internationally accepted standards for transparency and creditor protection. This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”

Nakheel has also confirmed this morning it will honor all obligations related to the 2009 Nakheel Development Limited Sukuk using funds that will be provided by the Dubai Financial Support Fund.

In accordance with the terms of the sukuk, the repayment will occur within the next 14 days.

I would like to say that it’s clear that anyone who made bets on the Nakheel sukuks (Islamic bonds) will cash in nice profits. This morning, the Nakheel 2011 bonds for example were up 40 to around 79.

International investors should also take notice that during this past three-week period of substantial price depression of the Nakheel bonds, surprisingly to “not-insiders,” also Dubai World has bought up the depressed Nakheel ’09s and ’11s bonds, without apparently any reassurance to existing bondholders.

To me, it’s difficult to believe, notwithstanding there is no evidence to the contrary, that today’s government of Abu Dhabi emergency rescue package was not known by the Dubai Financial Authority for at least a week or so.

Once more again, we have proof this is the way they do business over there. Investors can make up for themselves if that’s a good thing or a bad thing. In any case, they have been fooled again.

Also this morning I want to say that at Friday’s close there was no real change in the medium-term or short-term situation for SPY, which is the ETF (exchange traded fund) that holds all of the S&P 500 Index stocks.

The medium-term trend remains up for the SPY as it made a new high for 2009 this month while it is consolidating near the October high and, last but not least, it’s holding its gains. The bears point to lack of follow-through, and that’s true, but there hasn’t been any serious selling pressure during the last five weeks.

The prior move was up, which is bullish, and the current move is flat, which is neutral. Positive plus neutral doesn’t equal negative. For now, the SPY is simply consolidating its gains within a trading range.

As already said on Friday, it’s important to keep in mind that the SPY gapped up for the fourth time in five weeks. This gap is holding for now and unless filled that means a short-term positive.

The SPY still manages to make higher highs and higher lows albeit in a choppy way. The most recent gap and breakout at 110.5 reversed the downswing within this rising range. SPY then formed a small flag and broke flag resistance on Friday.

Even though follow through was not strong, the majority of gains are holding and this is more bullish than bearish. A break below 110.3 should oblige a reassessment.