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Strategies & Market Trends : Rande Is . . . HOME
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To: carepedeum2000 who wrote (44827)1/6/2001 1:47:10 AM
From: shadowman  Read Replies (1) of 57584
 
Carp,

I'm far from an expert, but one possible serious problem area that just doesn't seem to be getting enough thought, is corporate debt. Too much money was borrowed by too many tech companies from too many investment banks and venture capital firms. Whether by corporate bonds or out and out direct loans...based on the perceived promising future of these companies and the overall technology boom.

I don't mean to diminish the potential of technology, but I'm afraid that fiscal responsibility was seriously lacking when it came to some of these funding schemes. There is some very serious money owed and a lot of it is not going to get repaid.

How serious the economic consequences are going to be....I don't know. But I'd like to see the question addressed, and so far I don't feel it's being addressed adequately in the mainstream media. I saw the same thing happen with the S&L situation, This time I'm guessing the numbers will be much larger.

The burn rate for many tech companies was unbelievable. The ability to string out their debt seems to be coming to an end. Whether the lending institutions, with some creative help from the government, can soften the potential impact of this possible problem, remains to be seen.
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