It may strain credibility to suggest that 300 point declines are nothing to worry about. But after close observation and thoughtful consideration over the past fortnight, we are compelled to offer a rational response to the media’s hysterical treatment of recent events. Perspectives readers will recognize that the current turmoil in the credit markets is a logical outcome of the mispricing of risk premiums that has existed for some time now, although we could not predict exactly how the adjustment would manifest itself. The good news is that our clients have little direct exposure to the losses in the mortgage markets – and in fact may benefit as indiscriminate selling creates opportunities for level-headed investors.

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