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Newsnight 'aftershock' Special


the stig

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HOLA441

On right now.

Just heard the ex-Lloyds chief exec say that recovery will be a matter of years rather than weeks, and Blanchflower stating that it's the biggest financial collapse in 100 years.

Currently slating 100%+ mortgages.

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HOLA4410

This talk of needing credit to do business - what a load of rubbish! The woman almost answered her own question - they need to learn to save money, so they don't need credit, rather than using it to grow too quickly!

The banks loaning silly amount of credit is very much part of the problem. This quick buck, hell for leather growth, business culture is causing chaos. When you need to permanently borrow to function as a business, something is wrong; a leg up now and again to the next level, sure, but not from day to day.

Of course if everyone is on a credit binge, you have to join in to compete. It is easy to see why we ended up in this mess! <_<

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HOLA4411

it was nice to see.

but just as a point.

as a lefty...

...one who has gone on about, even written about, the madness of securitisation, of the impossibility of rising interest rates as they would trigger asset price collapse, of all the problems with neo-liberalism, co-opting politics, of an elite skimming cash off huge lines of liquidity and credit...etc etc...years before it happened...

...after a year I have never, on the media seen a single left wing view of the collapse. not a single one.

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Was the hedge fund chappy being sarcastic when he suggested they would take the brightest 18-24 y/o' and employ them to bet on house prices? Methinks they will have to employed on real wealth industries, not speculation for the benefit of a small few.

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HOLA4415
This talk of needing credit to do business - what a load of rubbish! The woman almost answered her own question - they need to learn to save money, so they don't need credit, rather than using it to grow too quickly!

The banks loaning silly amount of credit is very much part of the problem. This quick buck, hell for leather growth, business culture is causing chaos. When you need to permanently borrow to function as a business, something is wrong; a leg up now and again to the next level, sure, but not from day to day.

Of course if everyone is on a credit binge, you have to join in to compete. It is easy to see why we ended up in this mess! <_<

You are wrong with this post. If a business takes a large order and needs to fund production before the customer pays then credit is essential.

Same for business investment. If you want to invest to become more effcient then a loan can fund that captial expenditure.

I do agree in an ideal world where all companies pay in 30 days as agreed it may be not needed but every large company I deal with pays over much longer timescales than small companies. So credit is needed or legislation that says small busineses by law van add punititve fees (like banks do) to large companies with big cash balances that do not pay in the agreed 30 days.

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and america is owned by the chinese

well kind of... so far they have a lot of claims on the Americans...they are going to be royally stiffed by the yankees... just like the brits were post WW2.... the Americans are yet to really go cap in hand to their chineese masters...

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HOLA4419
You are wrong with this post. If a business takes a large order and needs to fund production before the customer pays then credit is essential.

Same for business investment. If you want to invest to become more effcient then a loan can fund that captial expenditure.

I do agree in an ideal world where all companies pay in 30 days as agreed it may be not needed but every large company I deal with pays over much longer timescales than small companies. So credit is needed or legislation that says small busineses by law van add punititve fees (like banks do) to large companies with big cash balances that do not pay in the agreed 30 days.

This is the sort of mad thinking that needs to go.

If you can't afford it, you can't afford it.

And it doesn't matter what "it" is, either.

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HOLA4420
You are wrong with this post. If a business takes a large order and needs to fund production before the customer pays then credit is essential.

Same for business investment. If you want to invest to become more effcient then a loan can fund that captial expenditure.

I do agree in an ideal world where all companies pay in 30 days as agreed it may be not needed but every large company I deal with pays over much longer timescales than small companies. So credit is needed or legislation that says small busineses by law van add punititve fees (like banks do) to large companies with big cash balances that do not pay in the agreed 30 days.

Please stop and think about this for a moment.

If a business has a float of money, waiting there, in case an order comes in, then they don't need the credit. The fact that every business thinks it should be entitled to a big hunk of credit to fund such rapid growth is part of the problem.

Think about how much money is being wasted on interest. Think about how many gambles are being taken on payment on delivery. Excess credit makes for a brittle economy, with a lack of fore planning, but maximum short term profit extraction.

I'm not saying that no credit is needed, but there has been a dangerous over reliance. Companies need to grow more organically, to build strong foundations. If we keep gunning for a quick buck, things will remain unstable, feeding insecurity.

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HOLA4421
This is the sort of mad thinking that needs to go.

If you can't afford it, you can't afford it.

And it doesn't matter what "it" is, either.

Even if you legislated that all goods and services must be invoiced pro-forma you'd soon find people were offering credit informally. I can't see the issue with it as long as it's not fraudulent in nature like bank originated loans.

___________

Much of what the other poster was calling for in late payment legislation exists but few firms take advanatge of it for obvious reasons.

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Please stop and think about this for a moment.

If a business has a float of money, waiting there, in case an order comes in, then they don't need the credit. The fact that every business thinks it should be entitled to a big hunk of credit to fund such rapid growth is part of the problem.

Think about how much money is being wasted on interest. Think about how many gambles are being taken on payment on delivery. Excess credit makes for a brittle economy, with a lack of fore planning, but maximum short term profit extraction.

I'm not saying that no credit is needed, but there has been a dangerous over reliance. Companies need to grow more organically, to build strong foundations. If we keep gunning for a quick buck, things will remain unstable, feeding insecurity.

I agree too many companies think they have grown just by credit.

But it is the same argument as house purchases. Most people can not afford to buy a house outright but a lot of people can afford a sensible LTV to buy a house. The same is true for business, a lot of busineses thought they were growing because of cheap credit whereas in reality they were not. But decent profit making busineses can afford credit at a decent level of gearing to invest in the future.

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