Our market view - 2007
December 2007
As history was for the Irish writer James Joyce, so the subprime-induced credit crisis has become a nightmare from which investors are trying to awake.
November 2007
The impact of the subprime-induced credit crisis continued to take its toll during October. Markets tend to discount negative surprises quickly, under the expedient assumption that a problem acknowledged will also be dealt with.
September/October 2007
The fallout from the imploding US housing sector spread during August and September, as more lenders and hedge funds, including European ones, became victims of their involvement with subprime mortgage debt.
August 2007
Towards the end of July, a fundamental readjustment of investors' attitude to risk took place.
July 2007
A new term has recently entered the private investor's vocabulary: CDO ("Collateralised Debt Obligation"). CDOs are essentially pools of loans, especially mortgages, bundled together into single securities and divided into "tranches" of different credit ratings.
June 2007
The markets are awash with money. Plentiful cash is driving equity prices higher. In the riskier credit markets, excess liquidity is forcing spreads to narrow, as even institutional investors chase higher returns. A neutral observer might be forgiven for thinking that this is the best of all possible investment worlds.
April / May 2007
As a distraction from the deteriorating condition of the US housing market, investors have turned to the accelerating boom in M&A activity for encouragement.
February / March 2007
At January's annual World Economic Forum in the exclusive Swiss ski resort of Davos, there was much discussion about whether or not global financial markets are appropriately pricing risk.
January 2007
As we enter a new year, the assumptions that drove securities markets during the second half of 2006 are being tested. Whereas the consensus view predicts a gentle slowdown in the US, characterised by containable inflation, the most recent economic reports from the world?s largest economy have given the investment community food for thought.