01/08/2008 Is the Credit Crunch Over?

Renewed anxiety about the state of the US economy and large companies such as Citigroup and General Motors has led to fears in the credit markets that the worst of the crunch might not be over.

‘In the last few weeks, hopes that the financial markets had turned the corner have faded’ says Martin Fridson, chief executive of Fridson Investment Advisors, an investment firm specialising in speculative grade debt.

Through May the default rate has doubled, but is still historically low at 2 percent. It is expected to surge to 5 percent by the end of the year and to 6.3 percent a year from now according to Moody’s Investor Service.

Despite the gloom we as a firm feel that there is optimism out there if you are prepared to look for it as well as plenty of opportunities. We are detecting an upsurge in interest from investors with spare cash who are enforcing the market to purchase land developments.