Parliament Bankruptcy Chapter 11

[ajhaig]

Capital often gets misallocated during economic bubbles as the bubbles can mask the flaws in the underlying business models.

As a general rule, lending to entities that are using the loans to cover operating losses (particularly in times of economic uncertainty) doesn't workout.

You can't blame it all on the banks.

[pwf252]

What you can blame the banks for is loaning money to anyone with a pulse, bundling those notes together and selling them off to another set of suckers all the while knowing, if the banks themselves had a pulse, that the likelyhood of repayment was iffy at best, but not really giving a rats behind because they made their bonus. THAT YOU CAN BLAME ON THE BANKS!!!!!!!!

[garyde]

The Banks really have no reason to Loan. Business activity is low because demand for services are low. In a recession, people withhold spending , creating a kind of self fulfilling slow down. In our case, fear and the natural cycle of a recession combined to create a whopper. The fear was caused by too many un secured securities which were not worth the paper they were written on thus ruining the Banking system.
With the Recreation buisness, Sales dried up. So, like Jon said Banks had no reason to finance. The industry was left with too much inventory and no customers going forward. If your layed off, your not going to be purchasing a RV. Banks closed off credit lines because Companies were now considered liabilities with no tangble assets but their good name.

So, cash is king. The more you have the better off you are in this economy. Long live the king!