Just Blame It On The Subprime Blues

from the otherwise,-everything's-just-fine dept

Although the effects on the tech industry have been muted, we've been following the impact of the mortgage/credit mess that's been roiling financial markets for the past few weeks. While many folks (particularly bankers and regulators) would like to claim that the situation is contained, every day brings more evidence that it's not. Michelle Leder has been tracking the number of times companies are using the word "subprime" in their SEC filings and she's found, not surprisingly, a spike in the word's use. What is a bit surprising are the companies that have invoked the situation to explain their performance. It's not just financial firms, as you'd expect, but companies as diverse as restaurant chains and wireless operators. The question, then, is whether this is simply an excuse for bad performance (like how retailers always claim they were hurt by the weather), or whether this issue has really started to creep up on companies in some way or another. At this point, it's probably a mix of both, although it wouldn't be a surprise to see a lot more companies affected by the situation than people currently expect.

Filed Under: credit crunch, subprime