Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (96853)	4/20/2001 12:37:32 PM
From: GraceZ	Respond to of 436258

CB- One of my prime considerations when borrowing to pay for business assets is the rate of return on the asset has to be sufficiently higher than the rate I'm paying in interest. If you already have over capacity in your business than there is no reason to borrow to expand it. I imagine a great deal of the borrowing that is going on is simply to restructure existing debt to lower interest rates. So in this way the reason your banker is going door to door to lend money is to get people to switch their debt to his bank. This is the same as all those roll over offers the credit card companies are pushing and the refi biz in the mortgage lending biz. The good news is that if rates are lower and businesses keep up the same rate of payment they will in fact shrink the debt burden....but a quick look at how fast earnings are shrinking tells me this isn't possible, they will be lucky to stay ahead of the interest expense, let alone the principal payments. Principal payments are made with after tax earnings.

To: Ilaine who wrote (96853)	4/20/2001 12:39:37 PM
From: TobagoJack	Respond to of 436258

Yup, it means when your kid is comfortably retired in a Japanese funded condo in Hawaii, some Japanese guy's kid will be slaving away making something or other to pay the bank for a bubble blown during the twilight zone years of 82-89. China mortgages go for no more than 15 years, mostly of the 10 year variety. HK goes for around 15-20 years, depending on age of home. Variable rate is the rule. <<But my crystal ball is hazy and I can't see the future.:)>> What you do see scares me enough already. The floor of the jungle is trembling. Thanks, Jay