Earlier this week, Global Custodian EIC Dominic Hobson speculated that the U.S. Federal Reserve stepping back and letting Lehman Brothers crumble could in a roundabout way be a positive signal for the future of the marketplace."You could say that the authorities have signaled that they have done enough to help the markets recover -- in other words, that marks the bottom of this particular credit crunch, and so things can only get better from here," Hobson explained, saying many at Sibos held such a view. Today, however, two days later, the ready-to-flop AIG insurance company was handed an $85 billion bailout by the Fed. In an about-face from the laissez faire decision made earlier this week, using Hobson's reasoning, the Fed must be saying this isn't the end of the credit crisis clearly everyone was hoping was on its way out.
So is this round two or are these the last few lightning bolts from a passing storm cloud? While we don't expect any more surprises this week, it is unlikely this is the end, either. Bankers we spoke to agreed -- some having sent colleagues back home from Vienna to evaluate the effect of this week's tumult.
We're waiting for the international mainstream press to turn up here in Vienna: When the next one drops, it could be one of us.
New Media Editor