Housing Market Tracker - How Subprime Affects Tech

Subprime and Tech

FTI Consulting - Recession Proof? “With the U.S. sub prime crisis erupting into a global credit pandemic, shares of corporate advisory firm FTI Consulting (FCN) are trending up. FTI, which specializes in offering financial restructuring and bankruptcy advice among other services, is on the radar of many Wall Street firms. The company serves an attractive industry that continues to benefit from the credit meltdown, which has sent several firms into an economic tailspin. In a struggling economy, FTI is experiencing broad-based strength across all its segments, reflected by a 77% increase in its fourth-quarter profit. (RTT News, Mar. 25th)

Subprime Aftermath: Tech Spending To Slow. “Analysts say… financial woes will affect technology spending by financial services firms. Larry Tabb, cofounder and president, of TABB Group says he sees a "ratcheting down" from a robust 8% CAGR [compound annual growth rate] in 2007 to a more modest 3-4% CAGR this year… Risk management technology will see the largest increase in spending at 13.6% increase (CAGR 2007-2012)… Financial services firms will continue to invest in trading and connectivity… Firms can't afford to not spend on these areas or they will risk falling behind their competitors, he says… Technology investments will also continue on the prime brokerage side, with an estimated 6.1% CAGR.” (Advanced Trading, Mar. 24th)

Does Dell Have A Subprime Lending Problem? “Tucked into a piece on Apple and patents on Barron's Online is an interesting tidbit about Dell (DELL)… It seems the Texas computer maker, thanks to its partnership with troubled lender CIT Group, could surprisingly find itself stung by the subprime loan mess. At one time, CIT owned a 30% stake in Dell Financial Services, which was founded about 11 years ago to provide leasing programs to small businesses. Dell has been unwinding the relationship with CIT for nearly two years and bought back the last percentage in Q4’07. “ (CNet News, Mar. 24th)

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