October 14, 2008
Where Is The Excess Capital?
Wall Street friends have been saying that in the last few years there has been a noticeable excess of global capital. Investors in Asia and oil-rich countries have had too much cash and have been looking for places to park their money. That demand drove the invention of exotic investment instruments vehicles. Mortgage derivatives were just one of many ways for investors to put their money in a wider range of assets.
The same observation is fingered by some (here, William Wheaton) a key cause of the U.S. mortgages and housing bubble.
My question is this: now we've had a crash. Is the excess of global capital still looking for a place to park? Where will it go next? Or has the money just evaporated?Posted by David at October 14, 2008 11:35 AM
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