Private Equity Placement apparently believes that the Federal Reserve bailout of insurance giant, AIG, may instill confidence in markets still shell-shocked by the collapse of Lehman Brothers.
Private Equity Placement cited the sharp recovery in the DJIA when the news was announced as an indication that global markets were relieved.
There had been concerns that AIG, had it collapsed, would have sparked off a chain reaction in the so-called shadow banking system which would have caused widespread meltdown in already dysfunctional capital markets said an individual with knowledge of Private Equity Placement’s research.
The Private Equity Placement source said that overall, this was good news. The PEP source added that the Fed had done the right thing by bailing out AIG.
