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Re: Economics business.The Sub-prime Crisis. How bad is it?
Quote:
Yen shock may prompt next wave of market crisis
The global financial system supercharged historically low central bank interest rates in recent years in several ways but there were three powerful injections.
One was through repackaging bank loans into securities for sale to a wide range of investors, freeing up bank balance sheets to allow them to lend more. Those markets are now in meltdown after a U.S. mortgage market bust called into question valuations of these complex instruments.
The second was via leveraged buyouts by the likes of private equity firms, who used cheap credit to raise cash and pumped billions into stock markets via a wave of takeovers. The credit squeeze has put much of this activity on ice.
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Yen shock may prompt next wave of market crisis | U.S. | Reuters |
