Letter to Investors: the financial crisis revisited
| 10 April 2008 |
| This issue of our newsletter reconsiders the financial events of these last weeks. Avalanche set in motion The opening quarter of 2008 will be etched like a scar on the memory, not just because of the slump seen on markets from mid-January, but largely because the international financial system has witnessed the detonation of an avalanche of speculative positions being unwound and offloaded on the credit-risk markets. |
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This crisis has left a trail of bloodied victims in its wake: funds forced into liquidation and the headline-grabbing scalp of Bear Stearns whose demise came lightning-fast, ending with it being bought for a token sum by J.P. Morgan with the Federal Reserve’s assistance. This rescue mission had become vital as confidence was haemorrhaging fast, threatening to drag the whole financial system down with it. Within the short space of just 12 months, 80 years of history and a market capitalisation worth 20 billion of dollars have gone down the drain, a front-line casualty of the rampantly virulent crisis facing investors at present. (...) |
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