In conversations with The New York Times this weekend, bankers, executives and traders said they felt last week with the announcement of US government tariff, flashbacks of the 2007-08 global financial crisis, which toppled several Wall Street giants.
“It seems similar to 2008,” said Ran Zhou, a New York Hedge background manager at Electron Capital, who canceled weekend plans and wore a button shirt to sit at her Manhattan office and read Chinese news sources to anticipate China’s plans.
No government help
What is unique about this crisis is that, instead of relying on the government to help join the pieces, the financial sector sees little hope of an immediate rescue.
“Pain is self-inflicted” by Trump, said Mike Edwards, a private investor consultant who spent the weekend in calls with other investors, starting on Friday night.
“You won’t learn anything from a calculator,” he said in an interview on Saturday (5) from his home in Connecticut. “It’s more about what your neighbor is doing than what the right price is.”
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Bill Ackman, a hedge background manager who is frank in his support for Trump, made a long publication on Saturday afternoon about the beginning of the latest tariffs. “Why would a break make no sense?” He wrote. “The risk of not doing this,” Ackman added, “is that the massive increase in uncertainty leads the economy to a potentially serious recession.”
Relief on Friday night
There were some positive points. Several banks and hedge backgrounds have pointed out that, despite the frantic sale, the negotiation after the fare announcement had occurred without any unexpected failures.
.The bank also said there was relief after a call on Friday night with the bank’s regional heads and executives because no one could point out a specific customer in danger of immediate implosion.
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Citadel anticipated “Tumult”
The $ 66 billion citadel hedge background traders for about a month were reducing the use of leverage and other volatile negotiation instruments, as Fund’s founder Ken Griffin was increasingly convinced that Trump would cause “turmoil,” two unauthorized employees said discussing the fund’s machines.
The hedge background, which approached the border of collapse in 2008, was practically stable last week, they said.
Companies sought bankers
In interviews, investment bankers said they were flooded with calls from large companies willing to pay high fees for advice on how to proceed. At Banco Lazard, the message to employees was to be available to customers, but not to offer conviction about what would happen next, given the immense uncertainty of the moment.
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In fact, the true depth of impact has not yet been determined. Bank of America estimates that companies’ profits on S&P 500 may fall into one third if retaliatory rates are decreed by countries subject to Trump tariffs. But terrible evaluations may change if countries start closing agreements with the White House that will reduce tariffs.
Canceled IPOS
Even before the announcement of the latest tariffs, US businesses in the first quarter fell 14% compared to last year, according to Lseg Data & Analytics. And in the middle of last week’s collapse, some of the highly anticipated public offers that bankers expected to prepare the scenery for other listings have been taken or paused, including offers from the Klarna and StubHub payment giant, the online ticket sales business.
Two executives of private equity They said they hoped market turbulence and sour global relationships would make it harder for private companies such as raising money, increasing the challenges they are already facing, as a declining business market made it harder to return money to their investors.
