Credit Lending For Early 2008 Does Not Look Good

A few entries ago, I was talking of a global crisis and this weekend I received another confirmation of it. My sister and brother in law are two French people working in London, England. For those of you not familiar with the role that London play in the financial world, it can be compared to New York but for Europe and part of Asia. Over the weekend, I had the pleasure to speak with both of them and they mentioned that between 15,000 to 20,000 bankers will be loosing their job in the new year.

These lay-oof are a direct result of the lending crisis started by the collapse of subprime lending in the U.S.. This means that numerous banks, many that we may not have heard about, have loss significant amount of capital in the U.S. real estate market. As a consequences, many will stop buying bonds secured by U.S. commercial or residential real estate. Which, I believe means that we may continue to see additional problems in the U.S. lending market.

Personally, I believe that we have not experienced the extent of the problem and 2008 will be one of the most difficult real estate year in the U.S. In addition, we may continue to experience a significant lack of liquidity.