Black Swan, commenter at Mish Shedlock’s weblog, offers another anecdote from the mid-level business circle he runs in:
We did Christmas Eve at at a McMansion that looked like a replica of an Antebellum Mansion. I got to talking with the owner, and he told me he only owed $180,000 on the house, which was decked out like a Martha Stewart Christmas spread. His big lawn is exquisitely manicured, and keeping it that way is a huge expense (my lawn is so bad that neighbors burn crosses on it just to get me to mow it). He has a beautiful trophy wife and two very young kids in private school.
He told me he was running out of money.
He has a trucking business in Newport News, Va., which is located at least 4.5 hours from his home in NC. He just let his manager go because he can no longer afford him. He will now be spending 5 days a week, away from his kids, his beautiful wife, his manicured lawn and his mansion, having to totally run the business himself from the port. He’s worried that even that won’t be enough to save him. Many of his customers are now more than 180 days behind in their payments to him. If he pushes them, he loses their business. If he doesn’t push them, he doesn’t get paid. [Emphasis added]
The last bit there is something I’ve wondered about for some time: to what extent is a deeper crisis being delayed by creditors being slow to collect on debts? Like the fellow mentioned above, such a creditor may be solvent on the books, but he ends up raiding his own savings to get the cash needed to keep the operation afloat. Once the savings are gone, all he has left is debts which may never be paid and in any case can’t be used to fund a business.