2007_08_31 — “August’s subprime mortgage contagion led to a widespread liquidation of…”

August’s subprime mortgage contagion led to a widespread liquidation of…

August’s subprime mortgage contagion led to a widespread liquidation of equities, commodities and low-grade credits. The sell off was exacerbated by the largest jump in overnight loan rates in six years. Correspondingly, inflation in China accelerated to the highest level in a decade, volatility soared, and U.S. consumer confidence reached a two year low. The market environment negatively shocked the performance of most hedge fund sectors, with the CS/Tremont Hedge Fund Index down -1.53% and some notable individual funds down over -20%. The Managed Futures sector was particularly affected, down -4.6% as an overall flight to quality by investors triggered reversals in most of the sector’s established energy, fixed income, and currency trends.

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Michael Ashley Schulman

Michael Ashley Schulman

Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm