Wednesday, Nov 18, 2009

Business defaults

Telegraph: Bad debt threatens to hamper economic recovery

This was a major problem in the last recession but not much about it this time. The problem, not stated clearly here, is to maintain cash flow businesses attempt to pay as late as possible, but when all businesses attempt to do this simultaneously it has an effect akin to a liquidity crunch. Businesses end up going under despite being profitable solely because of payment delays.

Posted by stillthinking @ 08:59 PM (871 views)
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7 Comments

1. bidin'matime said...

It might be cos I'm thinking of getting an early night, but I could have sworn it said 'Bed debt'. Funny how your brain plays tricks on you...

Wednesday, November 18, 2009 09:43PM Report Comment
 

2. Ohdearohdear said...

Just signing up, agree with the bears, though govt meddling has surprised me. You can't meddle forever.

Wednesday, November 18, 2009 10:04PM Report Comment
 

3. Ohdearohdear said...

House prices can NOT carry on rising, the country's debt will soon outstrip housing asset's in general. Which paints a bleak future, though we will all still love each other. Thats a positive, if you look'at times of hard ship!!y

Wednesday, November 18, 2009 10:18PM Report Comment
 

4. Guy M said...

You're not. It does. Impressive journalism there! Probably sent it from their bed while Tweeting on their iPhone...

Wednesday, November 18, 2009 10:40PM Report Comment
 

5. This comment has been removed as it was found to be in breach of our Blog Policies.

 

6. mander said...

High levels of debt does not equal bad debt. We are not that stupid. Like with a salary of a math teacher I can buy 700 properties.

Wednesday, November 18, 2009 11:04PM Report Comment
 

7. stillthinking said...

It did say bed debt. I just changed it because typo. Nice to see Telegraph on the ball as usual.

Thursday, November 19, 2009 10:31AM Report Comment
 

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