Brother can you spare a dime?
11th February 2008
Everybody is looking for a loan these days. From strapped consumers to capital depleted banks, money is scarce. AIG is down big today on increased losses on CDO’s. SocGen is raising capital by having a rights offering at a discount of 39% to the market! What will happen when the banks and brokers try to raise more capital when their losses keep mounting? Will the sovereign funds still have an appetite? How much of a discount will they have to offer next time? In the meantime, we are setting records in declines. The S&P is off to its worst start ever. Last week’s 4.4% decline in the Dow was the worst weekly performance in 6-7 years. Stay defensive,
- BA