Fast Forward

What’s unique about this crisis? Speed.

Every 10 years or so we have a financial crisis that wags say “ends the nature of capitalism as we know it.” Indeed, ever since Marx predicted capitalism’s succession by communism, every recession or panic has been heralded as the forerunner of the revolution.

This latest downturn isn’t that complex. It’s simply the bursting of a housing bubble and attendant write-offs by leveraged financial institutions. This threatens the professional courtesy that banks and their cousins usually extend to each other.

So why are things moving so fast? Information is widely available and liquidity is now provided “at will” so institutions in real trouble can become insolvent in a matter of hours. As a result, much intervention has the intent of extending the time available for business partners to react.

What to do? When the Feds step in, it may be time to step out. Because temporary help is likely to be—temporary.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2014-09-03T21:15:40+00:00September 26th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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