Quote:
Originally Posted by Cowboy89
The problem with the Credit Crisis is that the disruption in credit caused banks to horde money to keep their balance sheets alive and this process caused a disruption of funding towards "real" projects that had "real" value and thus stalling that value creation. There was a time last fall/winter where you could have been a reasonably sized company with good credit ratings and still not be able to borrow or obtain financing for operations and as such had to delay expansion plans, scale back operations despite still having viable markets and customers. The mass effect of companies in that situation scaling back operations contributed to the layoffs and declining economic activity. A lot of the 'recovery' could indeed be due to companies in that situation that only now are able to get the funding they need to operate and expand.
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Very true, but if it was truly an economic
crisis as many are proclaiming, we would still be in the position of nearly impossible project financing. Both debt, equity and institutional lending seems to be trickling back which makes me suspect that this whole kerfuffle was no more than a bunch of BS being flushed from the system.