Howdy Extrapreneur! I’d like to kick off a discussion here. As far as I’ve understood, your “raison d’etre” is starting businesses, right? Somebody tell me I’m right… heh heh… Anyway – my question for you is this – How is the credit crunch affecting British start-up businesses? Do you feel this “pinch” or is the UK still a few weeks/months away from the credit roll-back that has happened in the US? (For all you CL4 students – pick up the Economist at Via Oddi “dai bidelli” to get a handle on the situation! Basically, as US housing prices slump, consumers feel their access to credit shrink, so they spend less. As well, banks find themselves with less value as collateral against mortgages, so their willingness to lend shrinks (actually – this probably comes first) – particularly in what’s called the “sub-prime” market (riskier loans). Housing prices in both the US and the UK have been “on the rise” for the past 5 years or so – motivating people to new heights of consumer spending based on credit. This “bubble” is bursting – causing reduction in all kinds of spending and credit possibilities. The UK should be feeling the same reduction by now, as UK housing prices have risen dramatically in the last few years – so now – as they drop, people lose the value of their collateral assets. (Getting kicked in the assets hurts! haw haw!)
Ahhh – the smell of recession in the morning!
So Extrapreneur – how’s it going up there?
Italy’s housing prices have been dropping for the past few years (great time for Brits to buy houses in Italy – know anybody interested?) – so the problem should unfold differently here – no so much a consumer credit crunch based on housing, but rather a hit for the Italian banks as their foreign assets and investments shrink – hitting us that way.
So – there it is! What is this like to live through as an extrapreneur in the UK, and for Italian participants – what problems do you think this can cause for small-medium business in Italy?
All the best to everyone! Hope Sunday lunch is tasty!!!