Well it is happening and the ripples have started...... now we shall see a whole bunch of banks have to write off the money they lent to Lehman's something like $4.8 billion of debt...... this is going to shake a few other banks such as Citicorp and others and this will dry up credit further .... look for the property sales now to cover short term holes with no buyers. The real pleasure is going to be a massive reduction in property prices that will release real income over time for us all who have paid reasonable prices for our property and not the speculators.
Rents will come down as office space becomes available and there is a scramble to try to fill them. The number of non productive finance jobs are going to shrink fast and hopefully permanantly now that this self serving business is damaged completely in its credibility and reputation. Some people say the skilled people released which will top 250,000 world wide may seek jobs in Russia and China, and hopefully this can weaken the pain for some. But really hopefully now the fund and wealth managers will have to work hard for a living and analyse grass roots companies with great assets capable of good cash generation. Steering away from growth that is just leveraged based and not revenue based.
I would not be investing in Chateau Petrus this year or the famous Roederer for Crystal Champagne. They are likey to be the first hit from the yuppies missing there huge take on sales of valueless instruments. Have to feel sorry for the small delis in New York with so many of the yuppies not taking their quick snack. However.if their fundamentals are right of great value and service they will keep their clients happy!
Pleasure in other peoples pain or foolishness?
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