Thursday, November 15, 2007

Financial Collapse Continued

About a week ago i wrote a post about how the subprime crisis is going to tighten capital markets. I provided a list of real estate failures that painted a stark picture. Little did I know that there would be more evidence in the coming days.

Barclays Capital - Announced write-downs totaling 2.67 billion

HSBC - $1 billion more in write-downs

As I said in the last post about this issue, the danger is not that these companies are going to go under. In fact, Barclays still turned a profit (amazingly). The problem is that capital markets are going to tighten. Lending institutions are going to make it harder to lend money. Less money means less investment. Less investment means less jobs.

Buckle in because its going to get bumpy.

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