Heading for the rocks. Will financial turmoil sink the world economy?
From the summary:
The tremors in financial markets have gone far beyond their beginnings in the US subprime mortgage sector, and indeed far beyond the borders of the US. The full impact on the markets and the repercussions on the global economy remain unclear, but a new report by the Economist Intelligence Unit forecasts that the most alarming threat to global financial markets arises from the re-pricing of risky assets, and the associated deleveraging by investors.
In its newly-released special report Heading for the rocks. Will financial turmoil sink the world economy?, the Economist Intelligence Unit puts forward three main routes through which market turmoil could have a major impact on global markets. The first is the direct effect on holders of subprime-related assets. The second is the liquidity crunch that is presently occurring in response to uncertainty over precisely who holds the dubious assets. But the key threat is the fundamental re-pricing of risky assets and a reduction of leverage.
Source: Economist Intelligence Unit
This entry was posted
on Wednesday, September 5th, 2007 at 10:14 pm and is filed under Business and economics, Housing and real estate, Investments.
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