I’m sure everyone is aware of the banking crisis that the world is going through at the moment. It has already taken in plenty of victims – Bears, Northen Rock, Halifax, Lehman, Merrill, B&B, AIG, WaMu, Wachovia, Fortis have basically been bailed out, bought or fell over. Freddie and Fannie have tanked in. Morgan and Goldman have become holding banks. And these are the ones that I can remember from the top of my head! Even ICAP (who actually have great technology behind their trading platforms) can’t seem to meet their forecasts. And now Congress has voted down the $700bn government bailout (I have tons of views about this “bailout”, but that’s for another blog post).
Stock markets not healthy from yesterday’s trading
Where does it end ? I feel that the banking industry consolidation will actually carry on into the next year, maybe even the year after (thats 2010 for you!). Countries will officially hit recession. Ireland have beaten us to it! Jobs will have to go. The smaller banks who do not have billions in cash deposits will have to merge with ones that do.
For the short term – I’m actually interested in who’s next to go ? Surely the failure of plenty of banks and broker houses will have a horrible domino effect as some investment contracts will default. I have seen first hand what the fall of Lehman actually means – no one is going to honour your trades. They call it “counterparty default”.
So, who’s biting the credit crunch dust next ?
Posts RSS Feed