RE: LDI fallout V23 Nov 2022 16:11
Trek,
No doubt that will add to the disorderly queue to exit at other funds, which adds to the pool of distressed assets which means even deeper haircuts for those who have to sell assets. The zombies have been cut off from cheap cash and will starve over the next 2 years. There are some estimates that 20% of all UK companies will go bust.
A good thing to some extent as the nations capitol will be better invested in due course. But terrible if you work for one of those companies, or own one of them / shares in one of them.
And banks have been looking profitable and needing to have windfall taxes imposed. But are they taking full stock of the bad debt that will be developing on their balance sheets? Or the mortgage debts that will be going sour as people lose jobs and are unable to afford higher interest rate payments. And then a stagnating housing market reduces work for builders, handymen, estate agents, moving companies lawyers etc.
No wonder the BOE says it will be the longest recession in decades. Domestic tourism should be good though...