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Global Market Pays Subprime Mortgage
Financial authorities of the United States, European Union and of a few other countries that pumped at least $326 billion late past week to settle a jittery stock market made August 13 one of the most dramatic days for investors. From late Friday to early Monday, the investors’ concern was to attempt to predict whether the turmoil in the credit market was over or at full blast and whether they would better withdraw to some safe harbor as soon as possible. World leading stock exchanges will come up with the answer today.
Triggered by collapse of subprime mortgages and subsequent liquidation of hedge funds, the global fears and uncertainty hit even the capital funds that stayed away from the home mortgage market. Investors are said to be pulling out of there at large as well.
The financial jittery that calls for over $300 billion in few days to be dealt with could be hardly viewed a mere accident. Today’s question is whether August 13 will be finally remembered as the start of a new trend – the massive flight of investors from risks, which are bound to be overestimated from now own.
The first signal is expected from Tokyo, where the trading starts at 3:00 a.m. MSK. London and Frankfurt will follow. The money withdrawal from Russia, if any, will be reported after 10:30 a.m. MSK, when RTS launches the trading. Regardless, the final answer will be given by NYSE at 5:30 p.m.
The stakes are high. Judging by today’s performance, the U.S. Fed. will decide about calling an extraordinary meeting on Tuesday or Wednesday to drive down the key rates. Should it happen, the current events would be the problem of not a few days or weeks, but rather of a few months.
www.kommersant.com
All the Article in Russian as of Aug. 13, 2007
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