Another dimension to loans drying up is commercial paper and short term lines of credit for businesses. Since many of the banks are insolvent but no one knows who, the banks have been reluctant to lend to each other as a result. What does that mean??? It means that as these banks try to preserve and hoard capital the will begin to tighten up on lending standards for businesses too. Specifically short term debt. If that starts to happen en masse again, then your job is definitely in jeopordy because your company CFO is trying to figure out how to keep the asset side of the balance sheet from eroding if they can’t fund short term operations via credit lines…you know, like payroll. The easiest thing to do is cut head count. Additinoally, it will also impact capital spending at many small to mid-size corporatioins. Their cost of capital will increase making the hurdle rate higher for justifying capital expenditures. watch what happens to the portfolio of RD projects then. High priced design engineers suddenly become cannon fodder.
This stuff is all happening right now. It is why everyone needs to carefully reassess their employers longevity and stop projecting job security out into the future because it is not necessarily that secure anymore.