Diversity in action

News Headline:

Credit Suisse Writes Down $5.26 Billion

Over the last few years, I’ve been saying that with diversity risk is pretty well spread out.

Seems to have been the case – risk seems to have been well diversified.

Losses seem to be spread around more evenly than in the past with no one major US company failing as of yet due to losses per se.

But that also meant that in the adjustment process total losses would build to higher levels before the ‘cycle’ reversed and might be higher than in previous cycles.