TechPulse 360

Storm Duncan, Managing Director & Co-Head of Technology M&A, Credit Suisse

It’s not over until it’s over.

And Credit Suisse’s managing director and co-head of technology M&A alarming comments is a bleak reminder of that, because for Storm Duncan the end of this economic crisis is nowhere near in sight.

Actually, it’s going to get much worse.

“The day the Dow plunged [last Monday] everybody priced in the fact that the House is going to vote for the bailout. That was priced in a week ago and still there hasn’t been any flow of capital in the markets. And there will be no significant tangible flow of capital in the markets before the Government starts to re-buy assets from the banks. And that’s probably not until the end of the year at a minimum”, said Storm Duncan during a panel on “Capital Markets” at the AAMA Connect conference Friday.

So with little or no capital available before year-end for most consumers and businesses, large and small, the holiday season is just going to be tough.

“Any flow of capital that occurs in the interim is only going to happen with significant highly secure assets. So you’ll see the GEs of the world gain capital from Buffet etc, but in terms of high growth capital, risk capital – and I’m not only talking about Silicon Valley venture fund firms – but $10 to $20 billion public companies that aren’t investment grade are going to have very difficult to access to capital”.

Furthermore, according to Duncan, even investment grade level companies will find more expensive to raise money, “5 to 6 percentage point more expensive than it has always been historically”.

Now, how bad can it get from here?

Here’s an excerpt of Storm comments at AAMA about his views on the subprime crisis: