Woe Woe & Thrice Woe ?

What a mess the financial world is in. But the journalists are missing the main point. They are all hammering on about the credit crunch, that is very much yesterdays news, the real problem is the confidence crunch.

Banking and finance works on confidence, firstly that the actual system is strong, and that the players or banks are also strong. The acute problem is that at the present, the banks do not have any confidence in each other. Can you blame them when the board will issue a statement saying they are financially sound, ( that in itself should be like an alarm bell) and 3- 4 days later, the same bank is being bailed out by their central bank or sold on to a competitor. It is not as if it is one or two banks that are suffering from this, it is becoming rare that somewhere in the global economy a bank has not failed!

The swagger of Wall Street has long gone, and I think it will take many many years before the rest of us will ever listen to what they are saying about their institutions. The undoubted position as number one has gone, and I think for good, or at least some very considerable time.

So what does the future hold, well I think it is out of the hands of the Central Banks now, it is down to something that money cannot buy....confidence. When it returns,the market will gradually recover, and with that so will the economies. In regard to leasing, many lessors have either closed off their books or are underwriting in such a way that only a very small percentage of business is being placed on their books. Business's will always have to acquire new equipment, and as the banks are very reluctant to lend through the traditional channels, leasing will grow, as it always does in a recession. To use the most popular leasing company website in the UK, simply go to www.oaklease.co.uk

What is a Name ?

Until the last two to three weeks, Fannie Mae & Freddie Mac to most people in the UK could well have been cartoon characters. It is only now that we realise that they were the largest building societies in the world.

The credit crunch is here to stay for at least for all of next year. The reasons is quite simple, between them, Freddie & Fannie own or guarantee about £2.7 trillion worth of home loans - more than half the outstanding mortgages in the US. Almost every bank in the world has some sort of financial involement with them. So when they sneeze, we catch the flu.

The simple facts are that the UK banks are only lending what the savers are putting on deposit, as securitisation has almost dried up. Savers are under huge pressure,you only save surplus money, and as we all know, fuel is up, food prices are up, gas and electric are all rising, and there is inflation hitting everything else. With little money coming into the banks coffers, it is obvious that little money can be lent out to business. Coupled with banks on the receiving end of increasing bad debts, underwriters are now more cautious than ever.

So how does the future look? The only thing we can all do is work smarter, not harder. The internet is the growth area for all companies, or should be. By utilising a website and including a leasing web page is an easy way to help any business work smarter in the coming year. If you want any help on this simply click here