Market Turmoil Does Not Portend Wall Street Layoffs
While August has been a tumultuous month for the markets, the most significant hits have been limited to those in or around the mortgage markets.
Will the rough ride lead to layoffs on the Street? That’s the question posed by the latest BreakingViews column.
While investment banking firms like Bear and Lehman have seen their mortgage units impacted, bankers have so far escaped collateral damage. BreakingViews expects that, provided the worst of the market turmoil has passed, the damage will be limited to those closest to the subprime mortgage market.
Aside from those directly involved in subprime mortgages, the alchemists responsible for collateralised debt obligations and other bafflingly complicated structures must be particularly fretful. The rug has been pulled out from under their business, and confidence in the instruments and their credit ratings has evaporated.
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