Throughout 2008 it has dominated headlines from the shutting down of some of our biggest banks and high street chains to the closing of our local stores, it has changed our VAT and cut our house prices and is charged with being responsible for thousands of job losses, it has got the whole of the UK looking over its shoulder thinking who’s next to drop.

The media have deemed fit to build up the credit crunch(C.C) to be some kind of almighty money swallowing monster that can turn any business no matter how rich into rubble, everybody is quick to put the blame on the C.C for their mistakes and misfortunes but what we have to remember is that the C.C is just a slump in the economy just like for the last few years their has been a boom in the economy, as we all know history repeats itself and history has shown that the economy always equals itself out, what goes up must come down, anyone that doesn’t prepare for the bad while the going is good will suffer the consequences. But what really is the credit crunch, what is this almighty money swallowing monster that can’t seem to be stopped, is it really a serial killer of businesses or was it just the last nail in the coffin for some businesses that were already struggling in the modern market, to find out lets have a look at some of the casualties it has claimed.

First lets look into Northern Rock, Northern Rock kick started it’s own funeral by sub-prime lending, which put simply is giving mortgages to people who don’t meet the usual criteria for borrowing at the lowest prevailing market interest rate, which basically means giving people a mortgage that they’ll struggle to pay back, a no-no for anyone sensible but a yes for anyone greedy. When people started defaulting on their mortgages because they couldn’t afford to keep up payments Northern Rock couldn’t cope and the rest is history. Verdict: Northern Rock weren’t side swiped by the C.C monster, they paid the price for their greed.

Now let’s look at the shock casualty of Woolworth’s, unlike Northern rock which just effected Northern Rocks customers everyone felt the death of Woolworth’s, it was a household name and ironically will be a hundred years old in the UK next year, so why did it die? Trouble first started for Woolworth’s when the market for physical copies of music, one of Woolworth’s main money spinners, collapsed in the early 21st century, the major supermarket chains all started to expand into Woolworth’s while Wilkinson’s was directly challenging it on the high street. By august 2008 (a month before the credit crunch happened) Woolworth’s had a pre-tax loss of almost 100million and were already planning on axing 120 of it’s stores as well as cutting web operations and reducing it’s products. It’s easy to see that Woolworth’s was already fighting a losing battle years before the C.C happened, the C.C was just the knockout punch that put Woolworth’s out of it’s misery. Verdict: Woolworth’s failed to keep up in the modern market, it’s funeral date was decided years ago when the physical music business collapsed, the credit crunch was just the last nail in the coffin.

So what is the credit crunch, is it a giant killer, no it’s a serious test for businesses that if they have prepared for they will pass, so for anyone fretting about the credit crunch monster, don’t just use your common sense and get out of the way of it. If you’re running your own business then hopefully you’ll have prepared for this coming, if not then just cut costs where ever you can, consider closing for a while if you can to cut costs and wait out the storm. If you’re working for a big company then do some research see how they’re doing financially, if they’ve been struggling for a while then consider getting a new job with someone who’s financially certain like McDonald’s or for someone who the credit crunch won’t effect like the local council or government related jobs. For anyone else just sit back relax and don’t worry about it, as I said before what goes up must come down and what goes down must come back up, everything will be back to normal at some point, however when that will happen is anyone’s guess.