Race against time : SME face cash flow problems

Operators of cash-strapped small- and medium-sized enterprises (SMEs) say they can keep their businesses afloat for about eight months at most as they are unable to tap lending sources, according to Thanawat Palavichai, director of the University of the Thai Chamber of Commerce (UTCC) Economic and Business Forecast Centre.

Quoting a survey conducted by the university on 800 random business operators March 26-31, Mr. Thanawat said three out of four — 74.9 per cent — of businesses are now facing severe cash flow problems and 60 per cent are having difficulty on accessing lending sources.

Some 93 per cent of entrepreneurs are concerned about declining sales and believe their businesses can survive for only about eight months, according to the survey, which indicated that most are clearly pessimistic about the economic future.

Most businesses are using their accumulated profits or cash reserves for ordinary operating expenses at present and if there is not marked improvement within the coming eight months and if operators cannot boost their cash flow, most businesses will have to lay off about 10 per cent of their overall employees. (TNA)

As usual the methodology of those “surveys” can be discussed. But this one has at least one merit : it shows the underline risk of the current crisis.

Time.

Sorry to repeat myself, but this crisis, The Crisis should I say, is not a linear process.

The most important factor is : its duration.

Every day that passes with :

-a crashed global demand for german and japanese tooling machines, for cars built in Thailand, for IT stuff made in China
-a growing unemployment in USA
-a crashing property market in USA
-a 17 % unemployment rate in Spain
-a 18 billions euros annual deficit for medicare in France
-banks still under fire with their alchemy for losers (CDO, subprimes etc.)
-with ever growing debts amounts, increase of delinquency rates etc.

… you get the picture… each day in such nefarious environment… leads to an extension of the crisis.

Businesses will increase lay-off… less consumers mean less growth, less demand for products… less investments… less tax collections… more debts…vicious circle… compound effect… negative loop.

The only weapon the clowns have left is : confidence.

Hence the disgusting “french-kiss orgy” (with the tongues) we saw in London during the G20.

A grotesque carpet bombing of superlatives : “new world order”, “unprecedented package”, “great meeting”, “historic”, “very strong decisions”, “turning point”…

It’s bullshit.

They just threw 1000 billions USD to the IMF (or 5000 ? We don’t even know for sure), and launched an utterly ridiculous “war against tax havens” (ah ah ah it’s good to laugh!)… plus a few other toys to please the europeans (sorry, their voters).

I’ve noticed a very tasty and ironic idea : to sell IMF’s gold and give the proceeds to poor countries… Sell gold amid full demise of fiat currencies ? Insane.

It’s bullshit. Emptiness. Global Goebbelism.

It’s Miss Propaganda shagged by Mister Orwell, both under LSD.

And a true miracle it was : stock markets were up ! Euphoria ! Media talked about “recovery” and “bottom out”… a perfectly orchestrated PR operation…

By thursday 8 PM GMT, the crisis was almost over. Barack Omaba was handsome. Even sexy. Sarkozy was smiling with his ex-top model wife. Abhisit was already in a plane to Bangkok (he has some little… issues at home 😉 ). Brown was… Brown as usual.

Everything was almost perfect.

But… how long will last the effect of the psychedelic drug ? How long will last the collective hallucination ?

Will the word “confidence” defeat The Freaking Global Crisis ?

We might have a problem of… scale there.

A little one. 😉

1 Response to “Race against time : SME face cash flow problems”


  1. 1 prokester 3 April 2009 at 4:05 am

    Good post.
    This madness is beyond anythong else. And what about the FASB? Mark to hope is with us…. This is lunancy. The dollar will die. I cant beleive it.
    It’s like allowing footballers to count near misses….let alone moving th goal posts. The junkie has just been given an endless supply of top grade crack.
    This is the biggest ponzi trasfer of wealth from poor to rich the world will see untill…..next time.
    VAR, fair value accounting…. .. na…. let the lunatics not only run the asylum in full charge of the dangerous drugs cabinet.
    I have lost all faith, well the last quarter ounce I still had.


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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