Credit Market Turmoil
Due to higher than expected default rates in the sub prime lending market this summer, Countrywide Financial and a host of other large firms with significant subprime debt exposure experienced big losses. As news of the ensuing credit crunch spread, the bear rally became widespread. Upon the initial bear rally, the flight to quality began with government services firms continuing to provide a safe haven for investment dollars as shown above. Over the past seven years, government services firms have significantly outperformed the S&P 500 Index as the market places a premium on companies with significant exposure to government service contracts, as shown below. Read More.
Wednesday, November 7, 2007
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