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.

Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (32883)	3/1/2002 8:48:06 PM
From: skinowski	Read Replies (1) \| Respond to of 209892

Perhaps I’m naïve, but I never realized clearly certain things about bank financing of businesses until I heard Skilling’s testimony. It appears there are usually numerous contingencies that the banks can use to call in their loans, like credit downgrade, etc. In other words, whenever a business is having serious difficulties, their bank will come in and remove any remnants of liquidity. My CPA tells me that that’s the way it’s done, and that all parties know about the deal in advance, but IMHO this system is totally crazy. No leveraged growth business has a chance of surviving a downturn. Imagine that whenever someone’s wife/husband looses a job, the bank immediately calls in their mortgage. The approach is designed to exacerbate trouble.