Summary
This article is important because if it were not for the fright of our banks over sub-prime loans we would not be in this mess in the US and now they are threatening the foreign markets. Banks play an integral role in our secondary markets and because of that and their bearish beliefs on a sector of the financial markets, ie, sub-prime residential mortgages, has collapsed and caused unprecedented foreclosures and bankruptcies. When banks get skittish over a sector of the economy, whether locally or globally, as in 2006, and that caused the closure and bankruptcy of over 200 mortgage lenders thus far as well as millions of homeowners without a loan product to refinance their short term loans. Once again the bankers have the ability to shut down an economy of nations by pulling out too soon. What the end result will be is yet to be seen but I believe that at a time when they should be investing in alternatives they are ready to pull out and detroy more of our financial future.
Analysis
This impact will be felt across all sectors of trade from retail and wholesale to freight brokers and carriers. Don't forget that when the financial markets of one economy are crippled other economies flourish until the big guns roll over into those markets. Look for rising retail costs due to labor shortages in China and India.
