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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Smiling Bob who wrote (150224)9/25/2008 12:53:11 PM
From: XoFruitCakeRead Replies (1) of 306849
 
"Those with established credit are unlikely having trouble carrying on business because of this crisis."'

But established credit is a relative term.. When LEH went down, all the business rely on LEH for funding just loss their funding source.. And Gross has an interview came out today.. Very long piece and he is talking his book (chest thumbing etc.).. But what he talk about MS loan should shake all of us.. If MS after commitment from Japanese bank to infuse capital has to pay 25% for short term loan (and not getting from Pimco).. How good is a commitment from MS for anyone who establish credit facility with MS?? I think that is the heart of this credit freeze problem... We won't know that the credit is not there until it hit our banks or our source of credit.. So BK for any business is essentially a random chance depending on where you bank.. For us, little investor, market now is full of junior preferred from all kind of business that pay 9-14% (and I am talking about AA kind of buiness)

nytimes.com

"Even Mr. Gross admits that he has been, at times, reluctant to commit.

“We were offered this morning a six-month sizable piece of Morgan Stanley,” he said on Tuesday. “Here’s the surviving investment bank that just last night got equitized or bailed out by a Japanese bank. We were offered a sizable piece of a six-month Morgan Stanley obligation at a yield of 25 percent, O.K.?” "
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