The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Inside Investment: Hangovers from 2006

January is the month to purge the excesses of Christmas and New Year from the system. Detoxing won’t be so easy for the markets.

andrewcapon.gif

January is the traditional time to banish bad habits. For a few weeks at least we all stick to our New Year’s resolutions. The inner Puritan, in exile during Bacchanalian December, returns to centre stage. Living it up gives way to lying low, cocktails to cocooning. Indeed, the only mixed drinks consumed combine whatever fruits make wheatgrass juice palatable to people who don’t knit their own organic yoghurt for the 11 other months of the year.

If only markets found the process of detoxing after a period of excess so easy. Unfortunately, as former Federal Reserve chairman Alan Greenspan noted in his valedictory address in the summer of 2005 to an audience of fellow central bankers at the annual Economics Symposium in Jackson Hole, Wyoming: “History has not dealt kindly with the aftermath of low risk premiums.” There are hangovers from 2006 that will thump long into 2007. Any one of them has the capacity to induce a nasty dose of nausea for investors.

1) The private equity debt binge. This is something of a bugbear already but there are no signs that excesses of private equity are being moderated.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree