The Credit Crunch (recipe for a depression)

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The Credit Crunch - 1 year on
Want to know more about why the credit crunch happened, what the key moments were, and who saw it coming? The FT In Depth on the 1 year anniversary of the credit crunch will answer all of your key questions.
For full details on how serious the damage has really been to the economy around the world, and how bad it might still get, visit FT.com today. Credit Crunch anniversary in depth

The credit crunch comes to the mall
Add the prospect of retail job losses to an already sour economic picture.
By Colin Barr, senior writer
NEW YORK (Fortune) -- The credit crunch isn't just for Wall Street anymore.
Penny-pinching consumers are skipping the mall, as big bankruptcy filings this week attest.
While the failures of the Mervyn's department store chain and Bennigan's and Steak & Ale casual restaurants may seem mundane - there are other places to get a chicken pesto panini - they're more evidence of a consumer pullback that poses still another threat to an economy hampered by a loss-soaked banking sector.

Worried Banks Sharply Reduce Business Loans
By PETER S. GOODMAN - Published: July 28, 2008
Struggling to recover from multibillion-dollar losses, banks are curtailing loans to U.S. businesses, depriving even healthy firms of money for expansion and hiring.

BANKRATE.COM
News, tips and advice to compare mortgage rates, home equity loans, CDs, car loans, credit cards and money market accounts. Bankrate, Inc. is the Web's leading aggregator of financial rate information. Bankrate's rate data research offering is unique in its depth and breadth. Bankrate continually surveys approximately 4,800 financial institutions in all 50 states in order to provide clear, objective, and unbiased rates to consumers. Our flagship Web site, Bankrate.com, provides free rate information to consumers on more than 300 financial products, including mortgages, credit cards, new and used automobile loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans and online banking fees.

Q: Where has all the money gone? A: The banks are hoovering it up
CREDIT CRUNCH SPECIAL: how banks went from darlings of the stock exchange to pariahs By Selwyn Parker.
IN BANKING circles it is known as "the stick", and it is beating to a pulp the institutions that backed HBOS's disastrous rights issue to shore up its capital reserves. The name is given to the agreement that requires the sub-underwriter - the last man standing in a cash call of this kind - to mop up any shares without a buyer. And in the case of HBOS, there are a lot of them. After the main underwriters take up their shares, the subs will be stuck with up to £2 billion worth.

The fall of IndyMac
Feds seize bank - once a leading mortgage lender. It may turn out to be most expensive collapse ever. One thing is sure: The credit crisis is still with us.
NEW YORK (CNNMoney.com) -- In what could turn out to be the most expensive bank failure ever, troubled mortgage lender IndyMac Bancorp Inc. was taken over by federal regulators on Friday.
The operations of the Pasadena, Calif.-based thrift - once one of the nation's largest home lenders - were shut down at 3 p.m. PDT by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp.

Tech spending not immune from slowdown
Citigroup analyst says 'highly unlikely' that capex will remain positive
By Dan Gallagher, MarketWatch
Last update: 2:20 p.m. EDT April 21, 2008
SAN FRANCISCO (MarketWatch) -- Technology companies that have so far escaped the fallout of the credit crunch may simply end up with a delayed dose of the bitter medicine Wall Street has been swallowing over the past few months.
On Monday, Citigroup's chief equity strategist Tobias Levkovich predicted that corporate spending on technology products and services "is unlikely to escape the lagged credit market impact." Capital expenditures, or capex, will likely be trimmed by other companies -- particularly those in the battered financial services sector -- as their earnings come under pressure in the slowing economy, Levkovich predicted.
"History argues that credit constraints will affect all forms of capital investment," the analyst wrote in a report. "While some very specific areas may be more insulated than others, it seems highly unlikely that capex trends will be positive in the next six months or more."

The Independent - Business RSS Feed

Inside the Liar's Loan. How the mortgage industry nurtured deceit.
By Mark Gimein - Posted Thursday, April 24, 2008, at 11:25 AM ET
Here's the narrative we've heard about the mortgage meltdown: miscalculation and unfounded optimism, clueless investors, cash-strapped home buyers clobbered by rate resets.
But there's one piece of the mortgage-meltdown tale that virtually every article or television program dances around without ever quite confronting. It's the simplest aspect of the crisis to understand and also the most troubling, because it's not about complicated financial dealings and can't be fixed with bailouts. It's about an astounding breakdown of social norms.
It's the story of the liar's loan. Read more...

The credit crunch: High street blues
Britain's economic slowdown has forced 11 chains to shut outlets this year and others are bound to follow
By Susie Mesure - Sunday, 20 April 2008
Shoppers beware. The credit crunch is claiming more retail casualties than at any time since the early-1990s' recession and experts warn there will be worse to come, spelling the end of the high street as we know it.
As the UK's debt-fuelled spending splurge fizzles out, doors are slamming shut for the last time at chains as far apart as Mexx, the US-owned fashion retailer, and Ethel Austin, purveyor of value womenswear,
Since January, 11 mostly midsize chains, selling anything from books and bedding to menswear, have fallen into administration. JJB Sports, the camera sellers Jessops and Blacks Leisure, the outdoor specialist, are all shutting swathes of their estates and others – notably DSG, the group behind Currys and PC World – are working on closure programmes.