White House Eyes Bailout Funds to Aid Small Firms, page 1
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Topic started on 11-7-2009 @ 01:29 PM by Keyhole

White House Eyes Bailout Funds to Aid Small Firms


www.washingtonpost.com
The debate over the proposal has centered on whether taxpayers would be protected and whether banks that make these loans to small firms would lower their lending standards if the government promises to cover loans that go bad, according to participants present or briefed on the discussions. They spoke on the condition of anonymity because the conversations were considered private.

Administration officials want to prevent small businesses from closing and adding their workers to the growing ranks of the unemployed. Some officials say small companies are key to reversing the soaring unemploy
(visit the link for the full news article)


reply posted on 11-7-2009 @ 04:12 PM by Amagnon
On the surface looks good - but it's a rotten apple.

The problem is that return on investment at the moment is extremely poor - and will continue to be poor for the perceivable future.

It is not worth running a business where you are making 2% on capital - just shut it down, try and sell some assets associated with it and look for another line of business that is suited to the current climate - odd jobs, gardening, CV writing or something like that.

Failing that - if you don't want the angst of trying to switch over to a new business, then invest in something that might show a return - think about what stocks are likely to resist falling, commodities, energy, agriculture. If you really want to play safe - then some gold and silver metal is looking good right now - but it isn't going to help the economy, but it might accelerate the inevitable - allowing things to normalize as quickly as possible, also you personally get a win.

There is a lot of protection extended to large corporations by regulations and special benefits. This is why small business is going to struggle - they need to repeal a whole lot of regulation that opens up the door for small business to get a proper share of profits - that would turn your 2% business into a 5-10% business, but it will never happen - the large corporations will never let that regulation be repealed.

The bottom has not been hit yet - small business is the fastest on its feet, and can switch course, and rebound the best.

If your Ferrari dealership, or diamond shop is closing down - then hey - that's reality, people are not paying for that stuff anymore, even if its a corner store - then realize people are not going to be spending for convenience anymore - they want cheap.

So - try something else - or try and sell, and get something for your assets and invest the money. Offering bailouts for businesses that are no longer viable, and won't be for the next 5 years is a waste of money.

If they had just allowed the failures to fail - and backed small manufacturing businesses from the start, then I would have told you they were doing the right thing - now its too late for that.
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