Mixed Views On Future Market Prospects

The news is mixed about the future prospects of the markets. Some feel that the news this week that UBS has finally got out in front of its subprime problems and that Lehman has put to bed any doubts about its own liquidity position mean that the worst is over. Others are not so sure.

Although 2008 already appears to be a wipe-out over at UBS (a $12bn first-quarter loss surely signals that there will be no recovery this year), the firm has said that it expects to return to profit in 2009. And global stocks were on the march Tuesday, as investors feel that Central banks and regulators will do all that it necessary to prop up the financial system until things return to normal.

Bloomberg reports, however, that market commentator Charles Morris (banker, lawyer and author) feels that we might end up seeing $1 trillion in asset write-downs this year, as the subprime crisis has a knock-on effect on commercial mortgages, credit cards, credit default swaps, high-yield bonds and leveraged loans. The news agency also reports that The International Monetary Fund has cut its global growth forecast for this year and said that it feels that there is a 25% chance of a world recession.

And The New York Post reports that, according to Merrill Lynch, equity hedge funds are maintaining more assets in cash than at any time since 2004, as many are unsure where the stock markets are headed next.

Finally, The Wall Street Journal reports that JPMorgan boss Jamie Dimon bagged a $14.5m bonus last year, together with $10.7m in stock, $1.24m in options and a $1m salary. And The New York Times says that former Citi CEO Chuck Prince is playing golf and dieting and mulling over his next career move - which may be in private equity, venture capital or taking on a broader role on a corporate board or with a non-profit organisation.