Pegasus View

Quarter 2 2008

Despite January being reported as the worst start to Investment markets since 1935 in the first quarter of 2008, there was worse to come! Quarter 2 2008, started its ‘roller coaster’ ride with a rally in April and May, bringing some relief to investors, but was short lived in June when the gains were more than cancelled. In fact it was the worst monthly investment performance for 26 years. Read More

Quarter 1 2008

January 2008 was the worst start to Investment markets since 1935 some commentators suggested. The view that the US would enter, or was already in, recession combined with the collapse of the US housing market and the sub- prime mortgage market and resulting credit crisis were the main reasons for this. Things got considerably worse in late January when a trader at SG Hambros ran up billions of dollars of losses and the attempts to unwind these positions prompted highly volatile market trading, which in turn  prompted the US Federal reserve to cut interest rates by 0.75%. Add to this the emergency rescue of Bear Stearns by JP Morgan Chase, who initially paid $2 per share for a stock that was trading at $147 a share a year earlier, and it is easy to see why markets got spooked! The news that the price was raised from $2 to $10 was received well by the markets. Read More

January 2008

Concerns regarding the freeze-up in credit markets and its impact on the broader global economy really took hold in the fourth quarter of 2007, resulting in another period of turbulence in the markets. While concerns over US housing and sub-prime mortgages had been bubbling under the surface for some time, the general view was that it was contained and very much an American problem, although the third quarter volatility in credit and equity markets hinted at a more sinister outcome. Read More

October 2007

We are now in the forth quarter following a volatile summer in financial markets. Across the world, banks found themselves holding billions of US dollars worth of structured bond products related to borrowers with poor credit histories known as the US sub-prime market which lead to the recent “liquidity squeeze”. Read More

 
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