Even as the reverberations of the financial earthquake that hit the financial markets on July 26 are still rattling the retirement plans of millions the world over, a new term has re-emerged, as if defining the problem would make it go away. Money managers, now exposed, are standing helpless before a market that like the serpent that ate its own tale is beginning to gnaw. As the fine clothes come off and the high tide of a global bull market recedes, we see just what’s lying beneath the Armani suits — a herd. They invested as a herd, and are now pulling out like a herd. Naked they stand but together as herd, hanging on to anything that can justify their irresponsible behaviour. The newest straw they’re clutching at is called ROR (repricing of risk).

Sitting halfway across the world, in a country where the currency is not fully convertible, where subprime borrowers or their lending banks don’t exist, where products like CDOs (collateralised debt obligations) aren’t seen, where rating agencies have not graded them triple A, and where investors, particularly, hedge funds have not bought them, investors are still coming to grips with this new animal, ROR. But the market is not giving them time - with the Sensex is down 1,400 points (9 per cent) in 14 trading sessions, experts are throwing new numbers (it can go as low as 9,000-11,000) and old advice (at 12,000 it would be time for bottom fishing). All because of ROR.

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