Thank you as we reduce interest we too have problems in return.
It is too high a percentage in my opinion.
feer.com
No one wanted to be left out of the tech boom before it bombed. American and European banks, especially, fell over each other to fund technology. Indeed, Chi Lo, regional head of research for Northeast Asia at Standard Chartered Bank in Hong Kong, tells us that estimates are that in value terms, "more than 60% of international syndicated loans in North America and Europe went to tech companies" in 1999. More significantly, the proportion in the United States was 70%, while in Europe it was 40%.
Not all the money went into the Internet, of course: As we've said since before the crash, technology is more than the Internet. Some would have gone to high-speed telecommunications networks. The problem is that money also would have been spent on technology whose profitability is still in question, such as wireless applications. It's for this reason that Lo thinks these loans may represent "a big Achilles heel for the financial system." And, we might add, bank stock prices.
Certainly, Asia does not have overly high exposure to Internet lending. The region's timidity as regards the Internet, once thought a failing, has turned out to be a virtue in disguise. However, our stockmarkets, rightly or wrongly (and we think the latter), closely track U.S. equities. So if there are more storms to come in the U.S. financial sector, we may just want to keep our seatbelts fastened. |
