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WaterStreet Quarterly Commentary 2009 - 3rd Quarter: Markets Continue to Heal: The most powerful credit rally in decades continues as government stimulus programs and sustained liquidity provided by central banks allowed credit markets to gain more confidence. Renewed economic growth in China, India and other emerging markets lifted all global equity markets as the US experienced its best two quarter return since 1975. 2009 - 2nd Quarter: FINALLY SOME RELIEF: Governments and central banks continued to implement programs and policies attempting to unfreeze credit markets. The measurable success caused a powerful rally in credit. A rally in the equity markets followed, ending six straight negative quarters. The second quarter was the best quarter since the fourth quarter of 1998 when the S&P 500 Index was up 21.3%. Similarly, the fourth quarter of 1998 was preceded by the last major credit crisis, which was precipitated by the Russian debt default and the failure of the highly publicized and leveraged hedge fund Long-Term Capital Management in August of that year. 2009 - 1st Quarter: THE CREDIT CRISIS, PART III: Frozen credit markets, de-leveraging, and the re-pricing of risk continued, causing significant devaluation of equity and most credit instruments. However, actions late in the quarter by the Federal Reserve and the US Treasury seem to have created a bottom by announcing the purchase of up to $300 billion in longer-term Treasury securities. On March 23rd, the US Treasury explained in more detail how the Public-Private Investment Plan (PPIP) would remove $1 trillion in toxic assets off the balance sheets of US banks. Below is an archive of all previous Quarterly Commentaries. Simply click on the issue you wish to download.
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