If your business is structured such that a liquidity crunch will drive you bankrupt then some restructuring might be in order.
Eh, that’s what I thought do, but the very idea looks to be beyond the pale. They tell me that we needed to make huge loans on terms no one else could get to prop up some large banks, and it’s “only” to provide “liquidity”. But my thought is: I find it extremely unsettling to be in an economy where such a huge fraction of it is based on business plans this brittle; and the sooner and more spectacularly they die off, the better a foundation future growth will be built on.
But current mainstream thinking doesn’t even allow such a thought.
I also saw people present, as “evidence” of a liquidity crunch, the fact that overnight lending rights spiked from 4% to 6% annualized. Considering that these are the annualized rates for loans with a life of a few weeks at most, this is a trivial increase in borrowing costs. A business so fragile that it can’t withstand paying a few extra pennies for ultra-cheap loans every once in a while … well, any economy dependent on such brittle business plans is living on borrowed time anyway.
Eh, that’s what I thought do, but the very idea looks to be beyond the pale. They tell me that we needed to make huge loans on terms no one else could get to prop up some large banks, and it’s “only” to provide “liquidity”. But my thought is: I find it extremely unsettling to be in an economy where such a huge fraction of it is based on business plans this brittle; and the sooner and more spectacularly they die off, the better a foundation future growth will be built on.
But current mainstream thinking doesn’t even allow such a thought.
I also saw people present, as “evidence” of a liquidity crunch, the fact that overnight lending rights spiked from 4% to 6% annualized. Considering that these are the annualized rates for loans with a life of a few weeks at most, this is a trivial increase in borrowing costs. A business so fragile that it can’t withstand paying a few extra pennies for ultra-cheap loans every once in a while … well, any economy dependent on such brittle business plans is living on borrowed time anyway.