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Market
credit problems
It develops mortgage crisis
Problems in the mortgage market, the United States led to a reduction in
liquidity. In recent transactions have been eliminated to borrow tens of
billions of dollars. Investors do not know how many are in their faces in the
portfolio of assets, and prices are falling simultaneously in all markets,
erasing the principle of diversification of Bad Credit Mortgage.
Several high-profile failures - and investors are still several months ago,
willingly absorbing financed on borrowed funds themselves
attracted cheap Mortgages for the game on the market, lying low. Hedge-investmnet bank Bear Stearns funds lost in investments in mortgage bonds, almost all clients money (about
$ 1.6 billion), Standard & Poor's and Moody's Investors Service lowered or
raised at the downward revision in the ratings over 1000 issues of mortgage
bonds in the $ 17.3 billion; fund two Australian Macquarie Bank, working with
high-yield bonds of the United States, could lose up to 25% of the funds.
"After the [in 2000-2002.] Internet bubble burst, and after the attacks of
September 11, 2001, central banks have dramatically increased the cash
liquidity pouring financial system and markets low-cost money - Canadian
analysts write Scotia Mocatta. - This allowed hedge - funds, funds direct
investment, institutional and private investors [by borrowing] ratchets prices
in different Bad Credits. " However, rising interest rates, Mortgage,in particular, problems in the mortgage market, the United States, has led to
an increase in the cost of borrowing, forcing investors to reduce risky investments and Remortgages, noted in Scotia Mocatta.
Cheap money, in particular, to enjoy direct investment funds, which are
financed through their large acquisitions, which in turn fuelled the growth in
equity markets. In the first half, according to Bloomberg, announced the
purchase of fund companies to record $ 616 billion Investmnet banks who arranged the
deal, earned them, according to Thomson Financial and consulting firm Freeman,
$ 8.4 billion commission.
However, because of the crisis in the Credit markets over the past one and a half months wayside, in particular, attracting $ 12 billion for auto Chrysler,
purchased fund Cerberus Capital Management, and $ 8 billion banks placed among
investors with a loss - at a discount of 5% of the nominal value. Banks
underwriters also postponed syndication Loans to 5 billion pounds ($ 10.15billion) needed for the buyout fund KKR British pharmacy chains Alliance Boots.
It is estimated Baring Asset Management, from 22 June has been postponed 46
deals to attract $ 60 billion to finance the buyout firms on borrowed funds (in
2006 there was not a single transaction postponed). Total for such purposes banks
around the world must complete the planned placement of debt with speculative
ranking at $ 400 billion Lehman Brothers reported a week ago that his
commitment to placing such debts amounted to $ 43.9 billion May to $ 12.8
billion six months earlier. Goldman Sachs commitments during this time
increased by 25% to $ 71.5 billion, Morgan Stanley - by 75% to $ 32.4 billion
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