Research Zeitgeist: The End of The World As We Know It
In this space last week we wrote that a financial hurricane awaited if Lehman Brothers was not bailed out over the weekend. But we had no idea quite what a momentous and tumultuous week lay ahead.
So there are no prizes for identifying the Zeitgeist this week: the most turbulent financial market action in many, many years that elicited rounds of name-calling, emergency actions and waves of real and rumored deals. It saw a rather generic statement by President George W. Bush that bizarrely coincided with the start of the strongest two-day stock market rally in history. The more the financial crisis unfolds, the less we seem to know what’s really going on. As last week, expectations are very high that some sort of government-backed “bad debt collector” will emerge from the huddle of regulators and congress, so again, the market could be in for a fall if they don’t deliver.
Visitors to Research Recap were interested in the ripples from the latest developments, with S&P’s report Lehman Failure’s Impact on European Banks (S&P) topping the list.
They also seemed to like our new “Ratings Roundup” that compiles recent moves by the ratings agencies, which were coming thick and fast this week. The first of these, Ratings Roundup: AIG, WaMu, BoA/Merrill,
was our second most popular.
Further worrying signs were found in the third most popular post, Moody’s US Credit Card Performance Continues on Downward Trend. And CreditSights’ Analysis of Recent Financial Deals was also well read, as was 24/7Wall Street’s Solar Energy Firms Taking Hit from Lehman Failure.
Research Recap Quote of The Week:
In other words, instead of deleveraging, the banks have just shifted a chunk of their risk to the central bank. - Bianco Research, as quoted by The Economist.
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