The financial markets have experienced unprecedented turmoil over the past 18 months, exacerbated by historic pricing levels for food, housing and energy. The net result has been financial stress on consumers leading to escalating loan delinquencies and defaults, and a broad imbalance between the supply and demand for credit.

The roller coaster ride the market has experienced is due to a number of factors: weakness in underlying economic fundamentals, rising prices, falling home values, credit tightening, looser underwriting standards in past years and reductions in discretionary income, leading to reductions in spending levels.

The financial market is reacting immediately to any news creating volatility, and the global credit crunch that began with the US subprime mortgage markets is now a broad based concern. While there is some evidence that the markets are starting to improve, we are still in the early stages of recovery. Hopefully, there will be more stability in the markets in 2009, however, we can expect that the impact of the past 18-24 months will have a lingering affect, and in some respects a permanent affect, on the global market.

What we do know is that the days of cheap and easy financing have disappeared. But how we will evaluate the factors that will continue to affect the cash markets?

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