Another week of record falls has left many global leaders in doldrums concerning the futility of their measures to revive financial markets. Japan’s Nikkei fell to five and a half year lows after electronic magnate Sony halved their full year profit forecasts. India’s Sensex fell to its lowest level in 10 years and South Korea’s market plunged 10.6% amid Samsung’s announcement of a 44% fall in third quarter profits. Furthermore, the growing strength of the Yen was recognized as a threat to economic stability among G7 members. This has been instigated through the end of the carry trade, whereby investors borrowed the Japanese currency to buy currencies with higher interest rate, effectively exploiting arbitrage opportunities. This continues to exhibit the current deficient state of financial markets, epitomizing the self-imposed frailties that have unraveled during years of uninhibited corporate greed and confined government scrutiny.
What we are witnessing does not defy economic theory and logic; it is defiance against logic that has lead about to this global catastrophe. Conversely, it seems incomprehensible that taxpayers are made to bore the brunt for the irregularities conducted by multinational conglomerates. Governments may appear united in co-coordinating their rescue efforts, but there are no clear implications outlined for taxpayers, and concealing this information will leave the general public through to investors continuing to trade amid volatility highly anxious. The economic downturn has brought the UK into a technical recession, and this validates the mind-boggling activity prevalent within global stock markets. The question beckons whether we have finally seen market capitulation, or is this just the beginning of an unprecedented economic calamity?
However, history has taught us that every shortcoming provides an opening. Evidently, this crisis has led to a surge in litigation, as investors are looking to sue leading banks due to their inadequate underwriting procedures and ‘blind’ investment of funds in sub-prime bonds. Yet, despite increased demand for litigation, it poses various problems for law firms as well since the complexity of the financial instruments could make it impossible to determine the liability and extent of losses. Disgruntled investors are seeking redress from law firms, which has increased the size of the threat to investment banks to unquantifiable measures. Although the current mayhem could be profitable for law firms it has surely incurred bleak prospects for all other stakeholders concerned, and in the wider context anxiety cannot be laid to rest.
What we are witnessing does not defy economic theory and logic; it is defiance against logic that has lead about to this global catastrophe. Conversely, it seems incomprehensible that taxpayers are made to bore the brunt for the irregularities conducted by multinational conglomerates. Governments may appear united in co-coordinating their rescue efforts, but there are no clear implications outlined for taxpayers, and concealing this information will leave the general public through to investors continuing to trade amid volatility highly anxious. The economic downturn has brought the UK into a technical recession, and this validates the mind-boggling activity prevalent within global stock markets. The question beckons whether we have finally seen market capitulation, or is this just the beginning of an unprecedented economic calamity?
However, history has taught us that every shortcoming provides an opening. Evidently, this crisis has led to a surge in litigation, as investors are looking to sue leading banks due to their inadequate underwriting procedures and ‘blind’ investment of funds in sub-prime bonds. Yet, despite increased demand for litigation, it poses various problems for law firms as well since the complexity of the financial instruments could make it impossible to determine the liability and extent of losses. Disgruntled investors are seeking redress from law firms, which has increased the size of the threat to investment banks to unquantifiable measures. Although the current mayhem could be profitable for law firms it has surely incurred bleak prospects for all other stakeholders concerned, and in the wider context anxiety cannot be laid to rest.
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