PB Week: The crunch in New York

- Andrew Tjaardstra, editior, Professional Broking
- 17 Jul 2008
- Indicative reading time: 1 minute

The silly season is officially here and there is one story dominating the news: the credit crunch, the impending recession, rising unemployment, little room to manoeuvre for the Bank of England on interest rates, falling house prices etc, writes Andrew Tjaardstra, editor of Professional Broking. We have already heard every angle, and yet the real pain hasn’t even started yet, or at least that is what we are told.

New York

I was in New York only a few weeks ago and the gloom was mounting as The Wall Street Journal and New York Times dissected the impact of the crunch. Clearly herd behaviour has driven much of the losses with only Goldman Sachs out of the US giants having bet the right way on mortgage backed securities. I was wondering if there would be any “on the street” sign of the credit turmoil in New York, but everything seemed to be business as usual, suggesting that either everybody was in denial or that it was the calm before the next storm. The latest news is that JP Morgan Chase, which bought Bear Stearns, saw its second-quarter income drop 53% as it had markdowns on its investment bank and spiralling credit card and home loan losses. It has set aside a staggering $3.8bn in reserves to cushion expected losses. Expect this saga to run and run . . .

The highlights of New York? A trip up the Statue of Liberty – arrive at Battery Park at 8am or you won’t be able to go to the top; crossing the Brooklyn Bridge and then seeing the spectacular fourth of July fireworks; reading a book in Central Park; a viewing of Will Smith’s latest Hancock where Smith plays an alcoholic, bored and unmotivated superhero; and of course drinking in one of New York’s fine establishments where the waitresses never stop asking you for another drink and you can never work out what to tip them. Although American beer might not taste of much at least you never have to endure an empty glass.

PB recruit

This week reporter Katherine Brandon joined the Professional Broking team as reporter. Please welcome her to the industry at Katherine.brandon@incisivemedia.com

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