No bailout agreement

Dsylexic Wrote: ------------------------------------------------------- > sound businesses fund themselves from savings > (equity) .borrowed money isnt a prerequisite. did > google start because there was cheap credit from > wachovia? or was it because they had a brilliant > idea backed by angel investors(risk money) > wtf has accounting to do with this. this is basic > economics. you clearly failed commonsense 101 This is rediculous. Google did not start from savings, it was started from maxed out credit cards. I doubt you could have picked a worse example to attempt to demonstrate that businesses don’t need credit. http://inventors.about.com/od/gstartinventions/a/google.htm “Next, fueled by the rave reviews that BackRub received, Larry Page and Sergey Brin began working on Google. Operating out of their dorm rooms, the pair built a server network using cheap, used, and borrowed PCs. They maxed their credit cards buying terabytes of disks at discount prices. They tried to license their search engine technology, however, after failing to find anyone that wanted their product at an early stage of development, Page and Brin decided to keep Google, seek more financing, improve the product, and take it to the public themselves.”

They’ll have to fight it out like this: http://www.youtube.com/watch?v=a_-Eigd7RbU&feature=related

Dwight Wrote: ------------------------------------------------------- > Dsylexic Wrote: > -------------------------------------------------- > ----- > > sound businesses fund themselves from savings > > (equity) .borrowed money isnt a prerequisite. > did > > google start because there was cheap credit > from > > wachovia? or was it because they had a > brilliant > > idea backed by angel investors(risk money) > > wtf has accounting to do with this. this is > basic > > economics. you clearly failed commonsense 101 > > > This is rediculous. Google did not start from > savings, it was started from maxed out credit > cards. I doubt you could have picked a worse > example to attempt to demonstrate that businesses > don’t need credit. > > http://inventors.about.com/od/gstartinventions/a/g > oogle.htm > > “Next, fueled by the rave reviews that BackRub > received, Larry Page and Sergey Brin began working > on Google. Operating out of their dorm rooms, the > pair built a server network using cheap, used, and > borrowed PCs. They maxed their credit cards buying > terabytes of disks at discount prices. They tried > to license their search engine technology, > however, after failing to find anyone that wanted > their product at an early stage of development, > Page and Brin decided to keep Google, seek more > financing, improve the product, and take it to the > public themselves.” Was that a tapout from Dsylexic? Ouch.

i said cheap credit. credit card debt is cheap?. credit getting expensive in the market isnt going to kill good businesses is what i implied.

Yeah sorry for wording my reply strongly. It’s been a long day here. However, I think the point is that this is how businesses get started, and grow. What if Google founders had been rejected by the credit card companies? Where would internet search be today? What about more marginal companies that have good business plans, but maybe not as strong as GOOG? Easy credit may not be the solution, because it encourages risk taking. No credit = companies as we know them grind to a halt. Tight credit limits growth potential and the ability for a business to operate in the short run. I think we clearly see-sawed from too lax to too tigh-fisted. As with most things, a balance between tight and loose lending/borrowing restriction would be preferable to the current mess.

Businesses do not and should not for that matter think it’s smart to fund w/ savings/equity only. I’m not sure where you got the idea that using leverage in a smart managed manner is bad. Obviously being levered 20x-30x is bad (as we’ve all seen) but come on, how many successful responsible companies are funded w/ 100% equity…I think you know the answer is 0