Financial Implosion: Next Stop, Madison Avenue

25 Sep

Fasten your seat belts everyone.  We are in for a hell of a rough ride..

All media and ad-related companies will be shaken by the full implications of the deepening credit crisis, financial breakdown and consumer-led economic recession over the coming 18 months. They will reign in costs and cautiously explore ways to generate new digital revenues. Many will budget for a best-case scenario–and will be devastated when the worst case occurs, as many respected economists forecast.

In a conference call Wednesday, RGE Monitor economist Nouriel Roubini–who is known for well-regarded, accurate forecasts–warned of at least an 18-month recession in which corporate earnings generally will see only 5% or negative growth in 2009. Stock market and housing values generally could continue to fall to a collective 40%. Corporate debt will climb without relief, causing many defaults. Nearly half of all homes will be in a negative equity position, destroying the consumption of goods and services and resulting in negative GDP growth.

Dozens of regional and national banks with exposure to real estate will go bust–as will the FDIC, trying to cover them all. Many foreign markets that were supposed to be a source of growth are now also suffering deteriorating economics.

The Collateral Damage Dancers in NYC protest the war Midtown in NYC

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