tag:blogger.com,1999:blog-7539577136486286096.post3736560518481307124..comments2024-03-28T02:46:41.090-05:00Comments on Supply and Demand (in that order): Fundamental Inconsistencies in the Treasury's Report to CongressCasey B. Mulliganhttp://www.blogger.com/profile/03317454408275318282noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7539577136486286096.post-61427867973174583492009-01-21T17:31:00.000-06:002009-01-21T17:31:00.000-06:00Banks may not want to raise capital without govern...Banks may not want to raise capital without government intervention. Shareholders can raise equity values by shifting risk onto creditors. This means bad loans will be funded and good loans will be rejected. My coauthor and I argue that the major problem with the $700 billion bailout at present is that it buys preferred not common stock. Preferred stock is too much like debt to be effective.<BR/>Our paper can be accessed at the following link:<BR/>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1321666Linus Wilsonhttps://www.blogger.com/profile/15708405376918167083noreply@blogger.comtag:blogger.com,1999:blog-7539577136486286096.post-80082254277711708052009-01-05T07:38:00.000-06:002009-01-05T07:38:00.000-06:00While some business do borrow to make payroll and ...While some business do borrow to make payroll and other extreme short-term financing payments, most viable business do not.<BR/><BR/>The "bail-out" or fail screed was the biggest farce in recent history. I agree with the WMD analogy 100%.TxEconhttps://www.blogger.com/profile/14934059543203467938noreply@blogger.comtag:blogger.com,1999:blog-7539577136486286096.post-2890417829620991712009-01-01T22:38:00.000-06:002009-01-01T22:38:00.000-06:00Some businesses do fund payroll by borrowing. Som...Some businesses do fund payroll by borrowing. Some businesses are highly cyclical and borrow for all kinds of needs including payroll and then when revenue comes in they pay off all their short term debt. I don't think it's most, but there are businesses that do finance payroll and it's more of a timing issue than a business failing issue.Anonhttps://www.blogger.com/profile/16360342828201367542noreply@blogger.comtag:blogger.com,1999:blog-7539577136486286096.post-46055593590607325872009-01-01T16:24:00.000-06:002009-01-01T16:24:00.000-06:00My sense is most businesses do not need to borrow ...My sense is most businesses do not need to borrow funds to make payroll. Anecdotally, I checked with a few business owners, bookkeepers, and payroll officers I know at the time and they could not understand the need to borrow for payroll unless the business was failing. Are there statistics on borrowing for payrolls? And in what industry groups?Milton Rechthttps://www.blogger.com/profile/02488660316957122768noreply@blogger.com