3 reasons why Wall Street problems will affect all including tech

Today: $700 billion bailout plan fails in the House of Representatives.
So many problems have come to attack the U.S. economy, and the government has failed to act to help Wall Street. However, Wall Street isn't the end of problems, because their problems and the credit crunch is going to seriously affect a lot of industries around.

It's something we really need to think about here, because much of the U.S. economy is based on credit, and with these massive problems plaguing Wall Street, obviously, that part of the economy will be affected.

Why and how will Wall Street problems affect other industries, and the technology sector?

1) The power of Wall street to drag everything else into their mess is enormous, because this is where much of the U.S. "credit" is. Banks are having a hard time getting money, and it's going to take down new companies, and companies that rely on loans for their business. They will be destroyed completely, and there's not much they can do about it either. Even large companies that rely on loans will suffer hugely.

2) Wall Street problems is causing a major shift in public perception of the markets everywhere. They are lowering investor confidence, and causing stocks to plummet. Not all companies have a massive amount of money just lying around to plow past this time of economic downturn. If investors lose their confidence, then many companies will see their chances of survival dwindle, or at least force them to stay dormant with little progress during this time.

3) Normal Americans will also suffer from this, if not remedied soon. We're talking major decreases in consumer confidence and consumer buying because of reason number 1. How much of American people use credit every single day to purchase items, or products or services? Almost all. How many rely on credit to help them with their everyday needs? You can probably answer that easily. The truth is, people need credit and they need to use it for spending! If people don't have the money to spend, we're just going to see a continued and drastic lowering of consumer buying trends. Think of what this does to companies! Companies need consumer business to survive. Regardless of what sector, they need consumers somewhere up or down the line.

How does Wall Street affect the tech sector? Just take a look at tech stocks and you'll see what's happening. Obviously tech isn't immune. It's just another sector where people are losing their confidence.
In the online advertising world, there may be serious problems with filling ad inventory, as less companies will be willing to spend a lot of money on advertising. It's not just the inventory either, as it is quite possible companies will be willing to pay less for displaying ads. They will all shift to the saving mode instead of expansion. Digg seems to have disregarded this altogether, but the fact remains, online advertising is far from immune.

The government really has to take action RIGHT NOW! It's really unfortunate that the bailout plan failed, and even Microsoft has asked Congress to re-vote on the matter. Something needs to be done if we want to avoid a cash freeze and other economic problems. This is just too important to be left alone.

Tags: Wall Street, advertising, government, economy, banks, credit, Microsoft, Internet, Tech, industry, companies, confidence, BlitzTech Blog

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