Jim Rogers: NOT the end of the world, let em go bankrupt!

[patientrenter]

MadeinT,

One of the recent govt actions was to create a backstop to support Money Market funds. Implementing that would free up the commercial paper markets, relieving the problem you describe.

For some strange reason, this MM backstop has not been implemented by Treasury. In the meanwhile, we are all made to feel the symptoms of a credit squeeze…. which makes you and many other members of the electorate anxious for a massive bailout. See some comments in the recent threads on the Calculated Risk blog for more on this.

I suspect that we are being stampeded into a bailout.

[gary_broker]

Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.

[gary_broker]

Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.

[gary_broker]

Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.

[gary_broker]

Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.

[gary_broker]

Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.

[TheBreeze]

[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.

[TheBreeze]

[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.

[TheBreeze]

[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.

[TheBreeze]

[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.

[TheBreeze]

[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.

[CA renter]

Imagine all the capital poured into the Iraq war and the housing bubble and bust. Now, imagine instead all that money going to building solar panel plants and putting the new panels on every rooftop in America.
—————-
Exactly, underdose!

It sickens me that everyone is whining about housing prices going down…which makes housing more affordable and takes a smaller portion of a family’s wages, so they can spend their money and/or invest in more productive things.

Trillions of dollars…lost.

[CA renter]

Imagine all the capital poured into the Iraq war and the housing bubble and bust. Now, imagine instead all that money going to building solar panel plants and putting the new panels on every rooftop in America.
—————-
Exactly, underdose!

It sickens me that everyone is whining about housing prices going down…which makes housing more affordable and takes a smaller portion of a family’s wages, so they can spend their money and/or invest in more productive things.

Trillions of dollars…lost.

[CA renter]

Imagine all the capital poured into the Iraq war and the housing bubble and bust. Now, imagine instead all that money going to building solar panel plants and putting the new panels on every rooftop in America.
—————-
Exactly, underdose!

It sickens me that everyone is whining about housing prices going down…which makes housing more affordable and takes a smaller portion of a family’s wages, so they can spend their money and/or invest in more productive things.

Trillions of dollars…lost.

[CA renter]

Imagine all the capital poured into the Iraq war and the housing bubble and bust. Now, imagine instead all that money going to building solar panel plants and putting the new panels on every rooftop in America.
—————-
Exactly, underdose!

It sickens me that everyone is whining about housing prices going down…which makes housing more affordable and takes a smaller portion of a family’s wages, so they can spend their money and/or invest in more productive things.

Trillions of dollars…lost.

[Author]

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