On to the next stage. Will there be an impact on the wider economy? Anyone who thinks that this is a separate and isolated issue is obviously descended from King Canute’s advisers on tidal flows. Of course there will be an impact and there already has been. Some companies have seen credit lines cut and new facilities becoming tighter.
That will affect areas such as capital expenditure and investment plans and, in due course, employment. We have also started to see some effect on company payment schedules as companies squeeze the system to maximise their cashflow and it will be the small company at the end of the food chain that will suffer the most.
Funding also for mergers and acquisitions has also been affected and the M&A flood of the last 12 months will likely be a drought for the next period. This will not just affect the companies themselves but some might want to shed a crocodile tear for those investment bankers who lorded their way around the City over the past few years.
As for the retail economy, the signs are clear. The failure of music and DVD chain Choices UK is just the latest in a tale of woe in a sector squeezed by retail weakness and a fast-changing technology which effectively undermines their main business proposition. The increased cost of credit and mortgages will only turn the screw on other retailers.
So the barbarians had scaled the walls and occupied nearly a third of the fortress but they could not break into the keep. Yes, the London Stock Exchange (LSE) has finally seen the barbarians suffer the humiliation of withdrawing their forces as Nasdaq sought to sell its strategic position in the LSE. Perhaps they too have been a victim of the credit crunch as that heavily indebted exchange probably found the cost of its financing rising rapidly.
Its attention has now been drawn to the Nordic Exchange OMX, which, although I am sure is an excellent exchange, is hardly of a similar calibre or influence as the LSE. However, here too, the barbarians are likely to be foiled as its bid (saddled with yet more borrowings) may come up against that old fashioned alternative known as cash coming from an exchange with a better credit rating.
This cash may well come from the Dubai Exchange which has been keen to be expand its influence into Europe. Nasdaq, however, has had a torrid venture overseas compared with the NYSE and its purchase of Euronext. I suspect it may now go through a period of introspection and some significant changes.
For the LSE, this really is a new dawn. Freedom from the besiegers provides it with a great opportunity to lay out its strategy and ensure it wraps in some new and more reliable shareholders who share its vision for the future.
What may come? Well the co-operation agreement with the Tokyo Exchange may give a clue but as Tokyo has yet to demutualise, it would be difficult to effect any full merger. Maybe, however, further and more sold linkages with Hong Kong and Mumbai would be logical. The announcement last week to allow mainland investors to start investing in Hong Kong is an interesting move that could lead to some further significant developments in that market.
Come on LSE – your time has come – again.
Justin Urquhart Stewart is marketing director of Seven Investment Management