Friday, August 3, 2007

Commodities, Currency And Stocks

I am asking myself what's difference between this years correction in stock markets and last year correction in May-June-2006.

Last year correction started firstly in Commodities and that spilled over to stocks. The intensity with which these markets fell was shocking depicting how over leveraged positions can play havoc in the system.

This years correction occured because of cracks in the subprime mortgage markets in the U.S. and also due to Yen carry trade practice adopted by large firms. So this time credit markets and currency markets are creating tremors in stock markets.

Who knows whats next!