Thursday, August 09, 2007

Looks expensive, feels expensive , must be expensive

Easy money has made fools out of many. Now even the best financial Algorithmists in Western markets have been caught out as money lent in haste and cheaply to subprime mortgage borrowers has started going bad threatening the mega profits of the bulge bracket investment banks.
From US (Bear Stearns has had to close down two hedge funds  and both it Lehmans have seen share prices go down by almost 30% this year) , the panic has spread to Europe with the European Central Bank pumping (breath in) €95bn into the money markets today on fears of a liquidity crunch.

From the housing market, to hedge funds then private equity funds...even our own NSE may yet feel the chill spreading throughout the more "developed" markets with emerging market funds of the large investment banks pulling back to safer financial markets.

1 comment:

John Maina said...

Will probably have a limited impact on NSE, but if it is a direct one, in addition to the looming elections and allegations of brokers misapproprating clients money, the uncertainity will only increase.