Fund Performance Review (August 2007): A Global War with Sub-prime Crunch

With US housing starts falling to 10-year low and US mortgage borrowers bleeding, global investors are worried about how far the credit jitters will extend to, igniting a deep correction in US market in mid-August. In this outbreak, central banks around the globe acted decisively to fight back. Central Banks of US, Japan, Australia, Canada and Russia pumped nearly 100 billions dollars into the market, proving their resolution to restore normalcy. The Fed also cut the discount rate from 6.25 percent to 5.75 percent, and this action arouses intensified speculations of a near-term Fed rate cut. Although it is still too early to say whether the rescue is successful, some investors have hailed for this, giving US major gauges a sharp turnabout, though they are still far from full recovery. F