After Lehman: midway on the journey Five years after the collapse of Lehman Brothers, the largest bankruptcy in corporate history is rightly viewed as a dark cloud through which a wider world has come to judge global finance and its progress in adding to or subtracting from our mutual and individual wealth. There is no need for another tour here of the ghosts of financial crises past, let alone present or yet to come, but it is fair to say in passing that America, five mid-Septembers on from the loss – without bailout or rescue – of the once-mighty Wall Street investment bank, finds itself in the midst of another brooding change of season (even if Atlantic hurricanes have this year held off from its eastern seaboard). There are certainly concerns swirling on both sides of the Atlantic around asset values, from equities to property, as well as the robustness of the financial system at this moment of collective reflection on the 2008 financial crisis. There are those who worry that economic growth in the US and Europe remains listless. However, from the perspective of Wall Street and specifically US investors, the horizon looks rosy, with those who retained their faith in equities in the intervening years reaping handsome returns. The S&P 500 index on Friday closed at 1,688 points compared with the 1,193 level reached when markets opened on 15 September 2008 to the news that Lehman had filed… Also in this week’s weekly bulletin: •Corporate America has a renewed buzz of activity, particularly in the telecoms sector with Verizon issuing a record $49 billion in bonds •All paths this week lead to Fed chairman Ben Bernanke’s decision on the future of quantitative easing and how to reduce monetary stimulus •On Wall Street, there is a solid body of upbeat opinion that US equities are on the march, with optimism prevalent for the asset class •Investors who held their nerve after the Lehman crash have done well, and those with investments and assets have benefitted from easy money.
Posted on: Mon, 16 Sep 2013 15:09:31 +0000
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