The forced sale of Washington Mutual allied with the currently blocked state of the Wall Street rescue discussions leaves me with a sinking feeling in the pit of my stomach.
The collapse in retail sector profits, that I have been predicting, seems to have started with JJB Sports reporting a loss for the last six months and describing the situation as the "worst retail recession" it has ever known. Many retail companies are just holding position and hoping for a good Christmas, when that does not come true there will be big losses, company failures and huge job losses. I expect to see many high streets and shopping malls with over 15% empty units by the end of 2009 Q2.
The collapsing financial sector will flush out more troubled companies and this allied with the collapse in the retail and the construction sector will increase unemployment and decrease government tax revenues.
I don't wish to sound like the harbinger of doom, but...
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