OK, this blog is getting very financial, here is why. Things in the subprime mortgage and US financial markets are nasty. Forget last weeks 5-7% decline in equities, that is just noise. The real story is in the US housing market and the securities riding on the back of it namely the CDO's and CDS's (collatorolized Debt obligations and Credit Default Swaps. These esoteric sounding things don't show up on newspaper, but the trust me they are important. Here is an interesting article entitled Subprime could create global crisis, economist says
My own personal suggestion for those who may have a money market mutual fund or cash in the US, don't dump your equities, they are a long term play, but your cash or debt should shift to zero coupon govt. debt denominated in Euro's, try a fund or ETF if possible and try get something with a duration of at least 8 years. If there is a flight to quality, it will be govt, bonds and they won't be $ denominated.
