This is probably going to be a series of blogs from me, so I am serializing this blog. Next, I was wondering, how and where to start and then I read an interesting blog ‘Second Engine Implosion’ by Magnus Lind and the paper from J P Morgan it refers to.
The Figure below from this paper is quite an eye opener.
The Figure below from this paper is quite an eye opener.
Source: Federal Reserve – Flow of Funds Accounts of the United States;
Securities Industry and Financial Markets Association; Standard & Poor’s.
It shows, securitized Loans had the biggest chunk of Credit Market share.
And this is the chunk, which has been badly hit in the crisis. Or rather, this is the chunk, which has dramatically contracted and is responsible for the Credit Crunch. So, even though Bank Loans have responded positively to various stimuli, crisis in credit markets is still knee deep.
So, in next blog, I will go after these ‘Securitized Loan’ instruments and try build and understanding for them :)
It shows, securitized Loans had the biggest chunk of Credit Market share.
And this is the chunk, which has been badly hit in the crisis. Or rather, this is the chunk, which has dramatically contracted and is responsible for the Credit Crunch. So, even though Bank Loans have responded positively to various stimuli, crisis in credit markets is still knee deep.
So, in next blog, I will go after these ‘Securitized Loan’ instruments and try build and understanding for them :)
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