Credit Crunch

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Credit crunch hitting black cab maker hard.

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We’ve had a very difficult time over the last 4 years – the credit crunch has been very hard on us.

There are 288 jobs on the line if the company goes into administration.

Source: Sky news

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Will Italy be the biggest Credit Crunch Victim?


It is feared that Italy, the eurozone’s third biggest economy, could become the next victim of the debt crisis. It has taken three trading days since the failure of the G20 summit to detonate the explosive charge on Italy’s €1.9 trillion (£1.6 trillion) bond market, the world’s third-largest stock of public debt. Italy is fast becoming the next Greece. The country has 120% debt-to-GDP ratio, and its debt now stands at $2.2 trillion.
After Silvio Berlusconi, the consensus seems to be that a technical government can step in, implement reforms and reverse the growing credit crunch affecting Italian bonds.

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Every 3.69 minutes someone is going bankrupt (scary!)

According to Credit Action, the debtors’ charity, people go bankrupt at the rate of one every 3.69 minutes. A property is repossessed in the UK every 11.4 minutes. Spare a thought for the hard-worked staff of the Citizens Advice Bureau who handle an estimated 9.500 new debt problems every day. A staggering 16,348 individual bankruptcy petitions were made in the first three months of this year, along with 2,177 company winding-up petitions due to financial difficulty.

Source: The Independent

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CMA could tell you who the next crunch victims are!

cma logoI came across an interesting firm recently – Credit Market Analysis, are part of the massive CME Group. These guys work in the exotic world of Credit Default Swaps (CDS) and provide information, in the form of default probabilities, that gives an indication of who might be the next victim of the crunch.

A default probability essentially gives you a percentage chance of a firm or a country going bust over 5 years. McDonald’s for example has only a 2.6% chance of default- so this looks like a safe bet compared to Clear Channel Communications which has a 79.5% chance of going bust sometime in the next 5 years

So if you are a private investor, or if as part of your business you extend significant credit lines to other firms then it may be worth talking to CMA to see if any of the assets in your portfolio look like they need their last rites read.

Check out their site for more free data www.cmavision.com/market-data.

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Google Definition: credit crunch.

Wow! we appear in another English Google Definition. This time if you type in: “define: credit crunch“.

define credit crunch

Previously we had a definition for “GFC“. (Global Financial Crisis).