Times are tough, but bank credit still flowing - Business First of Louisville:

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His 142-year-old business is the area's largestf privately owned employer, ranked No. 14 on Businesws First's list of major employees, with about 1,700 employees. It has a stronh net-worth-to-debt ratio, healthy cash flow and a sound balance Simon said. Publishers has a line of credig tied to theprime rate, the ratees at which big bankse lend to their best customers. But Simon does see some weaknessa amonghis customers, such as an increasingt number of slow payers. "A couple of businessexs -- customers I've had for years -- have bouncedc checks that have never bouncedchecksa before," he said.
The question ultimately is: What happensa to economic growth ina worst-case scenario? Most likely, the deeper the the longer the return to normalcy. "Whay you see (during economic crises) is that on bank balances sheets, banks want to carry fewer loans, preferring to hold Mullineux said. "As the economy gets back on its feet, the bankes will sell those securities and use that cash to starttlending again." The current capital crisis started with banks and mortgage brokers making mortgage loans to people, includin real estate speculators, with poor credit questionable income and no money down.
Many of those mortgagexs included adjustable interest rates that rese to double or tripled theintroductory rates, with penalties if borrower s refinanced. If that weren't bad enough, those subprimed loans, through the magic of securitization, got turnecd into highly rated collateral for bond issuesz and other debt instruments such as collateralized debt obligations. So, when those dicey mortgages starteegoing bad, and borrowers started defaulting, the banks and mortgag e lenders started losing their But the pain didn't stop there. Those defaulte set in motion falling dominos as the housing bubble created by the artificially inflated mortgage demandquickly burst.
The mortgagwe defaults also meant that some investors stopped gettin g returns from thosesubprime mortgage-backed bonds as the underlyiny collateral went bad. Those investorzs included some of the biggest names on Wall including Merrill Lynch and the now infamous BearStearne Co. hedge funds. Moreover, problems with residential mortgage-backede securities have cut confidencw incommercial mortgage-backed securities and in the increasingly interconnectef world capital market matrix as a whole. New job creation may suffer as capital groww tighter Although established businesseds so far seem unaffected by the ongoincapital crisis, growth companie s that create new jobs might be hardest hit.
Sincd March 2007, Randall Waldman has built , based in from an idea into a thriving operatiohn with a totalof 240,00o square feet in manufacturing capacity in threew locations.