I've been chewing on a few things for the last couple of days.
"Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry." Hamlet
I overheard something in the airport the other day. One company is trying to buy out another. They can't get financing. Then I saw this by Kevin O'Leary about companies having to go into "the shadow banking" system for funds.
Banks are also under pressure as they brace for higher capital requirements, O'Leary said. Many have started to pull back on writing new loans, with lending conditions tightening the most on record this past April, according to Morgan Stanley.
"That is going to cause a real run again on these banks. Because if you have a payroll account at a regional bank right now … you're quietly moving it to Citi or JPMorgan or Morgan Stanley." O'Leary said in an interview on Fox Business on Sunday.
The trouble will ultimately spill over to small businesses. Practically "no one" is lending to businesses with under $500 million in sales, he added, which he believes is causing some companies to turn to the shadow banking market.
"This is causing some real chaos in the very short term," he warned, predicting that lending pressures would reach a boiling point sometime between September and November of this year. "[If] you don't put any capital into the small business sector, which is 60% of the jobs in America, you're going to start to see some real chaos."
Many of you are not old enough to remember 1979-1981. This is when rates went up to about 20%. Many many small businesses went by the way side. We know about the problems in the commercial property markets.
Just my thoughts...Cash will be king for the next few months. Apple can buy so many companies, for pennies on the dollar. Those with great balance sheets, should do OK. Those who have great products...But crappy balance sheets, will either go under or get cannibalized by other companies.
I can see this, but I don't know how to profit from it at this time...
Thoughts please...
"Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry." Hamlet
I overheard something in the airport the other day. One company is trying to buy out another. They can't get financing. Then I saw this by Kevin O'Leary about companies having to go into "the shadow banking" system for funds.
Banks are also under pressure as they brace for higher capital requirements, O'Leary said. Many have started to pull back on writing new loans, with lending conditions tightening the most on record this past April, according to Morgan Stanley.
"That is going to cause a real run again on these banks. Because if you have a payroll account at a regional bank right now … you're quietly moving it to Citi or JPMorgan or Morgan Stanley." O'Leary said in an interview on Fox Business on Sunday.
The trouble will ultimately spill over to small businesses. Practically "no one" is lending to businesses with under $500 million in sales, he added, which he believes is causing some companies to turn to the shadow banking market.
"This is causing some real chaos in the very short term," he warned, predicting that lending pressures would reach a boiling point sometime between September and November of this year. "[If] you don't put any capital into the small business sector, which is 60% of the jobs in America, you're going to start to see some real chaos."
Many of you are not old enough to remember 1979-1981. This is when rates went up to about 20%. Many many small businesses went by the way side. We know about the problems in the commercial property markets.
Just my thoughts...Cash will be king for the next few months. Apple can buy so many companies, for pennies on the dollar. Those with great balance sheets, should do OK. Those who have great products...But crappy balance sheets, will either go under or get cannibalized by other companies.
I can see this, but I don't know how to profit from it at this time...
Thoughts please...