Extending credit: the pain continues

Posted on November 7, 2008
Filed Under Uncategorized |

Dennis provides an example of how the credit markets are impacting supply chains.

This tongue in cheek look at the US dollar’s rise and fall would be funny if it didn’t mask the pain that many feel is upon the global economy. But then I read in the FT that Tesco is strong arming 300 of its non-food its suppliers to pony up an extra 30 days’ cashflow as it seeks to release more cash into its coffers. Over on HotViews, Richard Holway reports the same disease has spread to Computacenter and DSG, noting that:

[From Extending credit: the pain continues | AccMan]

With GM in the news today and not for good reasons it is somewhat reactive to simply say “let them fail” considering the impact such a development would have on the thousands of suppliers and millions of workers who are in play. I’m no fan of government intervention but also remain acutely aware of the consequences of inaction as well. Exhibit A is the Feds decision to save Bear Stearns but let Lehman fail, which in hindsight set of a chain of events that led to the demise of AIG and countless others.

We are living in extraordinary times, as much as I despise that bailout plan and more so how poorly it was conceived, communicated and ultimately acted upon by the Congress, I think we all have to admit that any playbook we thought we had has been ripped in half and we are playing the second half only on audibles.

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