Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Taikun who wrote (49633)	5/7/2004 1:57:54 AM
From: elmatador	Read Replies (2) of 74559

Need help on understanding this: Companies are being ran trying to get any capital they can lay their hands on. You have to get rid of inventory and make cash. You have to invoice promptly and avoid piling up receivables. You've got to negotiate terms and conditions whereby you get your money faster than you are paying out to your suppliers and subcontractors. There in lies an anomaly I an not able to understand. Companies are being ran as if capital was expensive. But capital is cheap. If you are creditworthy and pass in front of a bank you've got to move to the opposite side walk because the manager would like to press you to borrow money. There is liquidity, lot of it. What is lacking is business worth the risk to loan money to. EVEN AT THE LOW INTEREST RATES WE HAVE TODAY!!!

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