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Are we done yet?

It doesn't look like so. First of all who is responsible for all these mess? I personally will blame on so called 'risk managers' at investment banks and hedge funds. Fall of overinflated property market was inevitable and was visible at the start of 2007 itself. These institutes than tried to make their losses from commodity market and the recent bull run on commodities prove the point. When food riots started all over world they had to stop inflating wheat, rice, corn and oil prices. Now they are looking at already devalued dollar and are trying to 'hedge' it against rising Euro!!



There are hedge funds which are reeling under pressure from redemptions (read it here). Not sure how hedge fund will survive when market does not allow Short Selling and there are talks about curbing speculation in commodity market. The European bank futures look gloom when we talk about 'what if' situation like Lehman or AIG and who will be responsible to bail them out (read it here). The article points out the problem situation of 'unified' Europe which sadly does not have single regulatory authority for financial institutions.

Bloomberg's step towards cutting down expenses is welcomes by all. The proposed expense cut of 1.5 billion$ in two years and extra tax burden on New York will no doubt slowdown city economy but it's always a good idea to save for rainy days ahead.


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