So everyone’s piling on now:
– OPEC: “The more bearish economic trend which has materialized in recent weeks could negatively impact demand growth in the second half of the year.”
– WTO: Global economic and trade expansion could slump in 2008 because of the credit crunch sparked by the collapse of the U.S. subprime mortgage market, according to a report by the World Trade Organization.
– Toronto’s Coventree is the tip of a big iceberg of asset-backed commercial paper problems. This isn’t a subprime issue, because they don’t package up subprime loans; it’s an asset-pricing issue — and the most serious evidence of the fact that buyers simply don’t know what some of what’s for sale is worth. I feel bad for the people at Coventree, who took their company public in November and have been abandoned by some of the banks who were lined up to provide emergency funding — they’re now known around the world as a canary in a very dark coal mine.
And I’d like to start a collection of premature calls that the bottom has been reached.
August 13: “Money market conditions are normalizing”: European Central Bank.
August 14: Credit Tremors Pop Up in Cash Funds: Wall Street Journal
August 13: “…the nastiness has subsided for the moment…” Derek DeCloet in the Globe and Mail (subscription only)