Pall of Gloom Engulfs Silicon Valley

In the wake of recent events pertaining to the financial crisis and the billions of dollars being offered to bail out large global institutions, the economy has been left devoid of money and confidence. Owing to the fallout of the vulnerabilities in the financial system, the capital markets and the economy at large appear to have taken a beating in the aftermath.

Savour the after-effects:

• Liquidity has been sucked out of the system owing to the siphoning of funds towards the bailout.
• Investor confidence is dwindling as their savings and investments have come under a cloud.
• Consumers would not be interested in the splurge that is typical of the Holiday season. Everyone is worried about tomorrow, his/her job, his/her home, the home loan, the next credit card bill ... in addition to rising fuel prices leading to rising domestic prices of goods and consumer items.
• Nobody is considering a vacation or a long drive to the beach.
• With consumer confidence at it's nadir, expensive items will be off the list of most shoppers. As a result, analysts have downgraded the expected earnings of major retail stocks for the year-ending quarter.
• Stock downgrades add to loss of share-holder value owing to drop in stock prices, further denting the psyche of the common American.

Many miles away, between San Francisco and San Jose, the Start-up valley is also feeling the jitters.