Stock tumble around the world
Stock markets around the world are tumbling on news of hedge funds collapsing under bad bets on sub-prime mortgages. Sub-prime mortgages, or housing loans offered to buyers with poor credit history, at high interest rates, but millions of these buyers, unable to make their repayments, given the falling value of their houses, have seen hedge funds lose billions. The fallout has in-turn wiped billions off stock markets around the world, as far as Singapore and Hong Kong.
Is this it ? Or is this just the beginning of more to come ? This could be the start of a mini depression, which may see the market falling over the next few weeks, that may take a few years to recover. Therefore, the cash-rich should maintain liquidity, in order to be ready to move into the market decisively when it has bottomed out. And those in bad positions would do well to try to cut their losses as soon as possible.