The markets are in a panic again and bankers are worried about their bonuses and jobs
08-10-2007, 08:04 AM
#1
Senior Moderator
Thread Starter
The markets are in a panic again and bankers are worried about their bonuses and jobs
Whether there's any need to panic, that's another thing. Bloomberg quotes Jeffrey Kleintop, the chief market strategist over at LPL Financial Services, who said that 'the fear is feeding on itself. It's what you don't know that seems to be taking over the market'.
The markets took another tumble Thursday, after French bank BNP Paribas said that it had temporary suspended withdrawals from three of its funds (asset value around $3.79bn) due to a lack of liquidity in the markets, and speculation that a big hedge fund or investment bank was liquidating a large trading portfolio. The Dow Jones fell 2.8% Thursday, all 18 western European stock markets suffered losses and benchmarks in all of Asia's eight biggest markets fell away. The European Central Bank pumped $129bn into the financial system to help with liquidity (its first intervention since 9/11), and the US Federal Reserve followed suit with $24bn. This just appeared to heighten concerns and made the panic worse.
US insurance giant AIG came out Thursday and confirmed that it held around $28.7bn in subprime securities, but said that it was not under pressure to sell. Goldman was in the news again, and rumors continue to spread that the firm's flagship Alpha hedge fund is in difficulties. The Wall Street Journal also reported that a second Goldman fund, the $767m North American Equity Opportunities hedge fund, lost 11% of its value in July and there's speculation that it may be liquidating positions. New York-based hedge fund Tykhe Capital is also said to have dropped 20% this month and Highbridge Capital Management, owned by JPMorgan, is said to have sustained losses of 5.3% in July. Dutch merchant bank NIBC revealed $186.6m in losses on US asset-backed securities Wednesday, and has pulled its planned IPO. And WestLB has had to come out and refute market speculation that its Bridgewater Capital Management unit was in trouble over subprime mortgage-related losses.
Many feel that the current turmoil is similar to the panic that was last seen when hedge fund Long Term Capital Management went belly-up in 1998. Those of us old enough to remember back then recall that that panic was all over in 6/7 weeks, and the good times lasted for another 2 years after the affair was put to bed. And rating agency Standard & Poor's remains fairly bullish. Reuters quotes analyst Scott Sprinzen, who said that 'a lot of bad news will hit third-quarter results. (However) there's a good likelihood that this period of correction will be fairly short-lived, and we could see a significant rebound beyond the next few quarters'. Let's hope so.
In the meantime, DON'T PANIC
The markets took another tumble Thursday, after French bank BNP Paribas said that it had temporary suspended withdrawals from three of its funds (asset value around $3.79bn) due to a lack of liquidity in the markets, and speculation that a big hedge fund or investment bank was liquidating a large trading portfolio. The Dow Jones fell 2.8% Thursday, all 18 western European stock markets suffered losses and benchmarks in all of Asia's eight biggest markets fell away. The European Central Bank pumped $129bn into the financial system to help with liquidity (its first intervention since 9/11), and the US Federal Reserve followed suit with $24bn. This just appeared to heighten concerns and made the panic worse.
US insurance giant AIG came out Thursday and confirmed that it held around $28.7bn in subprime securities, but said that it was not under pressure to sell. Goldman was in the news again, and rumors continue to spread that the firm's flagship Alpha hedge fund is in difficulties. The Wall Street Journal also reported that a second Goldman fund, the $767m North American Equity Opportunities hedge fund, lost 11% of its value in July and there's speculation that it may be liquidating positions. New York-based hedge fund Tykhe Capital is also said to have dropped 20% this month and Highbridge Capital Management, owned by JPMorgan, is said to have sustained losses of 5.3% in July. Dutch merchant bank NIBC revealed $186.6m in losses on US asset-backed securities Wednesday, and has pulled its planned IPO. And WestLB has had to come out and refute market speculation that its Bridgewater Capital Management unit was in trouble over subprime mortgage-related losses.
Many feel that the current turmoil is similar to the panic that was last seen when hedge fund Long Term Capital Management went belly-up in 1998. Those of us old enough to remember back then recall that that panic was all over in 6/7 weeks, and the good times lasted for another 2 years after the affair was put to bed. And rating agency Standard & Poor's remains fairly bullish. Reuters quotes analyst Scott Sprinzen, who said that 'a lot of bad news will hit third-quarter results. (However) there's a good likelihood that this period of correction will be fairly short-lived, and we could see a significant rebound beyond the next few quarters'. Let's hope so.
In the meantime, DON'T PANIC
08-10-2007, 10:57 AM
#3
Senior Moderator
Thread Starter
Thank you for that image of traders in genie pants. 
08-18-2007, 07:54 AM
#4
I feel the need...
Traders turn to black humour
In one of the most turbulent weeks in the financial markets this year, there have been not only tears but also laughter as black humour have helped some of the world's biggest banks and institutions come to terms with the prospect of huge losses.
http://news.yahoo.com/s/ft/20070817/...20071734509584
http://news.yahoo.com/s/ft/20070817/...20071734509584
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