Perfect Storm of Doom foreclosures banking issues and recession
Reading through Bloomberg this morning and realizing that we have a “perfect storm of doom” that is going to color how people invest, take advantage of new technology, and otherwise support the IT industry as a whole. Add to that companies cutting back on budget, firing people, a true lack of desire to hold back the tide, we are hitting the point where the weight of what we have created is going to alter the next generation of web technologies and people who start them up.
A surge in defaults among subprime borrowers, those with poor or limited credit, spurred the collapse of the U.S. home loan market and has led more than 100 mortgage companies to stop lending, close or sell themselves. As the value of securities tied to mortgages plummeted, lenders and securities firms have reported writedowns and credit losses of at least $245 billion since the beginning of 2007, according to data compiled by Bloomberg. Source: Bloomberg
When Bear Sterns can be sold in a weekend fire sale, the larger banking institutions where we keep our money for our companies might be having real issues, you can’t write off 245 billion without pain. That pain will come in reduced savings, reduced purchases of stocks, a greater disparity between economic classes, as well as a host of other issues that will crop up that will influence Web 2.0 and Web 3.0 companies.
It might be the best time to stay stealth and work out the technology before going live and seeing how people adopt your technology. It will not be because they do not want to, but as people cut back on things they want to purchase things they need like food, gas and housing payments, it is going to be a lot harder to find money to invest, or money to be on the Internet.
Picture courtesy of Guerilla-Photographer
Keywords, perfect storm, doom, recession, money, fire sale, bear sterns, billions, write down, bad, banks, banking, money
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