So much has been written about the current financial climate and its impact that you might think what new am I going to blog about.
But there is something that intrigues me these days. Almost every day I read some retail chain, some bank, some online store closing down and filing for bankruptcy.
It reminds me of environmental disasters like floods, tsunamis, forest fires which changes the entire landscape. Old things disappear and new areas evolve. The current Financial Tsunami (as some media agencies term it) is something similar.
But there is something that intrigues me these days. Almost every day I read some retail chain, some bank, some online store closing down and filing for bankruptcy.
It reminds me of environmental disasters like floods, tsunamis, forest fires which changes the entire landscape. Old things disappear and new areas evolve. The current Financial Tsunami (as some media agencies term it) is something similar.
No longer will we see the household brand Woolworth in our local High Street where you could get a kid’s toy to an old man’s duvet. Every year we see MFI ads flooding the TV with its Christmas 50% offers on its furniture sets. No more from next Christams. No longer will we purchase music from the online discount chain Zavvi. No longer will the elite society purchase Teas and Coffees from Wittard of Chelsea. No longer the best mortgage deals will be available from Northern Rock. No longer will the highest savings rate will come from a bank in a tiny country of Iceland. The TVs will be spared from some of the worst ads where a spectacled guy dances and screams about HBOS interest and lending rates. No longer will the unique twin giants Fannie Mae and Freddie Mac be the trusted names in secondary mortgage market. Back home, some of the most anticipated and sought after institutions on IIM campus like Lehman, Bear Sterns and many other I-Banks will now be absent. In fact there are so many more names that will suddenly disappear like LandAmerica, Circuit City, Linens N Things, Wellman, Flying J, Palms of Treasure Island, and many many more. I am even sure by the time you forget about having read this blog, there might have been many more names and I might have to do a sequel to this. Some statistics state that US bankruptcy proceedings have surged 30% in the last 12 months. In a tiny country like Serbia, experts say as much as 40,000 companies would face bankruptcy (Mind it they are talking of companies and not individuals).
This Financial Tsunami has engulfed some of the oldest and biggest brand names.
In fact had the governments not intervened on time, there could have been many more like Goldman Sachs, AIG, Citi, Bank Am, GM, Fortis, Chrysler, Ford, and the list is endless.
Slowly people will forget that such names existed and the brands will die as people’s memory is short-lived. Well as they say Change is the only constant thing in the world and today’s landscape is fast changing.
1 comment:
How do you thing that this Tsumani will affect the future of financial services market. It surely ends the era of complex and short sighted financial instruments and the concepts of pure play investment banks.
On other note, are we (at india) also not replicating the subprime crisis situation by luring lower income group citizens by offering lower interest rates. This not only causes concerns on people's paying back capability but it questions govt's strategy who is hell bent on puting India PSU Banks in to dangerous zone. Image a further interest hike and crash in property prices. Have we not learnt few lessons already, why repeate the mistake?
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