Comments on: Financial crisis not yet our industry’s crisis http://www.techforecasters.com/weblog/archives/financial-crisis-not-yet-our-industrys-crisis/ Read what our thought leaders are thinking, in our every-other-Friday TFI blog entries. Sign up with your favorite RSS Feed service and get an automated alert whenever there's a new posting to the TFI Weblog. Wed, 21 Jul 2010 10:20:37 -0500 http://wordpress.org/?v=2.8 hourly 1 By: Matt Chanoff http://www.techforecasters.com/weblog/archives/financial-crisis-not-yet-our-industrys-crisis/comment-page-1/#comment-16009 Matt Chanoff Fri, 26 Sep 2008 18:12:25 +0000 http://www.techforecasters.com/weblog/?p=145#comment-16009 Thanks Glenn, The hit to hardware and software direct sales to the financial industry is being estimated at 20% in 2009 - down from about $22 Billion to $17.5. On the other hand, consumers have been displacing other purchases to keep buying electronics, and most people expect decent unit sales. So far, we've got widely scattered showers, but no deluge. As for mark to market, sure it causes problems in a liquidity crisis, but isn't the alternative worse? An accounting rule that allows you to leave bad assets on the books longer might help some banks ride over a temporary loss of confidence, but in a major credit crunch it would incentivize them to ignore reality for longer, leading to a deeper fall when they finally deleverage. Thanks Glenn,

The hit to hardware and software direct sales to the financial industry is being estimated at 20% in 2009 – down from about $22 Billion to $17.5. On the other hand, consumers have been displacing other purchases to keep buying electronics, and most people expect decent unit sales. So far, we’ve got widely scattered showers, but no deluge.

As for mark to market, sure it causes problems in a liquidity crisis, but isn’t the alternative worse? An accounting rule that allows you to leave bad assets on the books longer might help some banks ride over a temporary loss of confidence, but in a major credit crunch it would incentivize them to ignore reality for longer, leading to a deeper fall when they finally deleverage.

]]> By: Glenn Lefkof http://www.techforecasters.com/weblog/archives/financial-crisis-not-yet-our-industrys-crisis/comment-page-1/#comment-16006 Glenn Lefkof Fri, 26 Sep 2008 16:04:27 +0000 http://www.techforecasters.com/weblog/?p=145#comment-16006 Recessions usually start with one industry and then trickles down eventually to all other industries. As long as employment is high, the technology sector appears to do well. This banking problem can very easily affect all other industries if companies can no longer borrow money and that leads to excessive layoffs. And if companies cannot borrow money, there will be layoffs in the banking sector and in every other industry. There is definitely a major concern that this banking problem will eventually hurt the tech sector and lead to a recession or worse. Let's hope that our goverment can get it right. Stupid accounting rules like Mark to Market were the obvious culprit leading to banks having to write down assets using worst case scenarios. Bank convenants are then violated and this starts a whole chain of events that aren't good. If the tech industry is only mildy impacted that will be amazing. Recessions usually start with one industry and then trickles down eventually to all other industries. As long as employment is high, the technology sector appears to do well. This banking problem can very easily affect all other industries if companies can no longer borrow money and that leads to excessive layoffs. And if companies cannot borrow money, there will be layoffs in the banking sector and in every other industry. There is definitely a major concern that this banking problem will eventually hurt the tech sector and lead to a recession or worse. Let’s hope that our goverment can get it right. Stupid accounting rules like Mark to Market were the obvious culprit leading to banks having to write down assets using worst case scenarios. Bank convenants are then violated and this starts a whole chain of events that aren’t good. If the tech industry is only mildy impacted that will be amazing.

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