The Bankwatch

Tracking the consumer evolution of financial services

A succint comparison of exiting 1980 recession, and 2009 recession

I thought this a particularly succinct view of the next 10 years view prospects for banks and their business planning.

The view from New York | Buttonwood/ Economist

The bearish view came from Josh Rosner of Graham-Fisher. Mr Rosner was one of the first analysts to spot the potential havoc caused by the interaction between subprime mortgages and structured products like CDOs. He thinks the economy will not rebound as it did in the 1980s. Demographic trends are not as favourable (the baby boomers were entering their prime earning period in the 1980s; now they are retiring); while credit card use was about to explode (now it is contracting). He argues that small businesses, a key source of job creation are still being denied credit; one problem is that small businessmen can no longer afford to use their houses as collateral.

Written by Colin Henderson

October 20, 2009 at 22:30

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