Finance by a Croat

And the pertinent question is…how deep is it? No one knows at this point, but the markets are going to spend the next year determining and clearing out the damage. The current round of write-downs is merely the beginning of the game. Years of excess credit sloshing around the mortgage markets will take much more time, and pain, in the form of steep losses, to erase the exuberance that was. A NYT article discusses this, as they point that firms continue to write down billions more, even after they publicly state that they are done devaluing their assets. This is leading to a confidence crisis, which is deepening the credit crisis, as witnessed by the bank run on Northern Rock earlier this year, the first time a British bank has encountered this catastrophe since 1866.

Right now, the big question in the Credit Markets is, Who’s Next?