Flow of capital has to be reduced; BIS and the IMF must take action
One thing that is all pervasive from Washing
ton to Wellington is ‘debt’ in its very true nature. Riding high on the profligacy of consumers & asset markets, debt has taken shape of all possible forms – from highly leveraged deals by the Europeans to growing credit card distress among Asian nations. But the assumption of fund managers about their gains from leveraged deals, those of who are issuing these credit derivative that the counter-party default won’t occur, and that of an ordinary consumer that credit cycle will continue to be like what it is now, is perhaps the biggest fallacy gripping fund managers & individuals. Optimism of investors is at an all-time high; the gap between the yield demanded by investors to hold high yield, high risk US corporate debt and government bonds fell to the lowest ever on June 5, 2007.
For Complete IIPM Article, Click on IIPM Article
One thing that is all pervasive from Washing
ton to Wellington is ‘debt’ in its very true nature. Riding high on the profligacy of consumers & asset markets, debt has taken shape of all possible forms – from highly leveraged deals by the Europeans to growing credit card distress among Asian nations. But the assumption of fund managers about their gains from leveraged deals, those of who are issuing these credit derivative that the counter-party default won’t occur, and that of an ordinary consumer that credit cycle will continue to be like what it is now, is perhaps the biggest fallacy gripping fund managers & individuals. Optimism of investors is at an all-time high; the gap between the yield demanded by investors to hold high yield, high risk US corporate debt and government bonds fell to the lowest ever on June 5, 2007.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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