CJJ

Be Prepared for S&P to Hit 350 by June 2010

Ex-freaking-actly...

How can people say we have too many businesses tailored to the consumer(YES, many of those small businesses) and that the economy will collapse if some of the fluff goes out of business.

Its the same bad argument Larry made about less credit to people. Guess what, while in the short term Joe Idiot who has no real money to buy a car but does so on credit is good for the economy, in the long run its bad when he defaults and then the car company goes out of business.
Its the same thing the other way. If you close down credit to Joe Idiot, in the short term it may be bad he doesn't buy a car, but in the long term it better because he doesn't default. The idea that is John Moneybucks who can afford things is going to be also affected if his credit gets cut is stupid. John Moneybucks will either A)use cash or B)be in a good enough position to get the credit. or C)a combination of A&B
Its called rightsizing. Happens in every recession.

You can't have it both ways Ryan and Larry. Sorry.


On May 28 11:55 AM mr freddo wrote:

> As a former small business owner, I would have to agree with the
> author that shutting off credit will kill many of these businesses
> that are the engines of employment in our economy.
>
> But it won't bring down the economy. The weaker businesses will close
> and the stronger businesses will pick up the slack. Consolidation
> will occur which will raise overall productivity.
>
> In boom times, small businesses proliferate and overcapacity becomes
> a problem. Well run businesses have to compete with poorly run businesses
> that don't understand how to cost their products or services and
> often undercut the market price to get business, driving profits
> down for everyone.
>
> Well run, conservatively financed small businesses will survive and
> prosper.