Lehman Chief Global Bond Strategist sees “deepest correction” ever in structured finance. Current market is in ‘recession-risk denial’.
US credit crisis now worse than Long-Term Capital Management, Lehman's Malvey says – Reuters
Posted in * Economics, Politics, Economy
This is painful but needs to get sorted out to get the financial markets back in order. Right now, banks have assets that they aren’t sure how to value, which means other banks are reluctant to lend them money (since the collateral is those hard-to-value assets). You can see this in the spread between short-term treasuries and inter-bank lending rates. Also, banks are increasing reserves and reporting losses, so investors are souring on them. Add to that a Fed signalling reluctance to cut rates, and consumer confidence falling, and you get a period of volatility. For most investors, the best thing to do is stay diversified, manage your risk according to tolerance and objectives, buy steadily, and this too shall pass.
Not a criticism, but is there a linky for the headline?
#2 From tinyurl (and Reuters): http://tinyurl.com/2gek5x
Thank you Shirley!