Imagine you’re an institutional investor holding a great deal more illiquid, price-impaired assets than you’re comfortable with. Do you a) hold on to them and pray that the price rebounds, or b) sell now and take a loss, before things get even worse?
The U.S. Treasury’s unveiling of its toxic asset plan sent stocks soaring on Monday, and none more so than in the banking sector. The KBW Bank index rose 18.6 percent, its best one day gain since at least 1993, driven by a 26 percent gain in Bank of America, a 25 percent advance in JPMorgan Chase and a 20 percent gain in Citigroup.
from Funds Hub:
Nothing like a bit of toxicity. Wealth managers at Citi are telling their clients to watch for a burst of hedge fund interest in bad assets. They reckon the biggest opportunity for hedge funds is probably around the Public-Private Investment Fund, which is part of the huge U.S. plan to stabilise the financial sector.