Christmas 2009 Market Overview
I am pleased to report that 2009 has been a much better vintage for investment markets and your portfolios than the “annus horribilis” for investors of 2008, although caution remains the watchword. The root causes of the overly leveraged global banking system’s near collapse seem to have been excessive risk taking in the residential subprime market in the US, and the use of expensive, overcomplicated derivative-based structured product solutions, which it turned out that no-one understood at all. When price declines in the US housing market led to losses on mortgage asset-backed securities, the more heavily indebted banks and hedge funds were forced to sell, which set in motion a vicious debt-deflation spiral.
However, investment markets experienced strong rallies from their lows in March this year once it appeared that the financial intervention by various governments around the globe had averted the possibility of the banking system imploding, although economic recovery in the indebted developed world remains muted, and slow, which is typical of a recovery from a financial recession, as companies and households repay debt and borrow less.
To read Kay's complete analysis click on the following attachments below
Kay Burt 01603 692792
kay.burt@kbinvestments.co.uk
36 Unthank Road
Norwich
NR2 2RB
www.kbinvestments.co.uk - provides hourly share and market news
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