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The year of the credit crunch

The year of the credit crunch
1 January 2009 - Issue 409

1 January 2009 – Issue 409

1 January 2009 – Issue 409

By Suzan Nuri

WITH the num­ber of big na­me com­pa­ni­es go­ing ban­krupt in­crea­sing by the we­ek and thou­sands of pe­op­le lo­sing the­ir jobs, the­re can be no do­ubt that 2008 will be re­mem­be­red as the ye­ar that we le­ar­ned a new phra­se: cre­dit crunch.

What started as a ripple across in America, with the collapse in the housing market and mortgage lenders such as Freddie May and Fannie May having to be saved by the US government, turned into a tsunami which engulfed banking giant Lehman Brothers and eventually washed up on the UK financial shores.

Banks stopped lending to each other, which caused a ‘credit crunch’, affecting every financial institution, both global and here in the UK.

While the effects of this financial tsunami took time to filter through, it eventually exposed critical weaknesses in companies such as Woolworths, a High Street giant for over 100 years and many other blue chip stores such as childrenswear group Adams, Zavvi entertainment stores and furniture giant MFI.

Other major companies such as Allied Carpets, JJB Sports and Land of Leather are also teetering with mounting debts and falling sales.

Of these major companies to fall victim to current trading conditions, most people will regard the demise of Woolworths as the saddest.

With almost 30,000 employees and hundreds of stores nationwide, the failure to find a buyer was devastating news and will leave a big void in High Streets up and down the country.

It is thought other major retailers are eyeing up prime locations formerly leased to Woolworths but there is no doubt the brand name will be gone forever.

The credit crunch did seem to benefit prime minister Gordon Brown however. In recent polls, Mr Brown and Chancellor Alistair Darling seem to have emerged as the politicians the voting public are most willing to trust the failing UK economy with. There is no doubt the Conservatives have a lot of catching up to do this new year to overturn that perception.

2008 should have been remembered for the fact that America chose its first Black president, the young dynamic Barack Obama, as far removed from the hated figure of George W Bush as it is possible to get.

With the new president due to be sworn in this month, America and the world will look to see how President Obama will leave his mark globally.

Terrorism remains a constant threat and there are combat flash points dotted around the globe. The latest is the Israeli attacks on Gazi which just in the past few days has left hundreds of Palestians dead.

The Cyprus issue remains unresolved, despite Greek Cypriots voting in a new leader who appeared closer in ideology to Turkish Cypriot president Mehmet Ali Talat than his predecessor. Will 2009 be yet another key year for Cypriots or just another false dawn?

On the sporting front, 2008 will best be remembered for the amazing Beijing Olympics and the incredible success of British athletes. Eclipsing F1’s champion Lewis Hamilton, British Olympians were hailed as they brought home dozens of medals, 31 of them gold and produced an Olympian who took three gold medals in cycling, Chris Hoy.

Published on 1 January 2014 as part of Londra Gazete’s “Five years ago this week” feature.

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