Spooking investors
Financial markets remain on edge because the credit crunch has not been solved
LIKE young Halloween revellers, investors spent years grabbing all the candy, in the form of high-yielding bonds and loans. That binge ended in spectacular fashion with August's credit crunch, as investors suddenly decided the high-yield treats were worth less than they thought. But two months on, the credit markets still look decidedly sick.
On October 24th Merrill Lynch reported its first quarterly loss for six years thanks to huge write-downs by the investment bank of $8.4 billion. Worries about more such losses have made markets jittery. “We're now in a state of fear,” is how Alan Greenspan, the former Federal Reserve chairman, described it at a conference this week.
This article appeared in the Briefing section of the print edition under the headline "Spooking investors"
Briefing October 27th 2007
From the October 27th 2007 edition
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