Business finances

I came across this story.... the inner workings of GC
 
http://thetoneking.com/wp/the-debt-pyramid-how-guitar-center-paid-its-april-2013-obligation/
 
 

The bigger problem is that many, many businesses operate in this condition.
 
I too, believe that is it simply a matter of when, not if, the rates rise. This country can not keep the rates low by artificial means for much longer. They are already hinting that EQ is about to end or at the very least be curtailed. several hundred points were lost in the stock market just over the mere mention that the end to QE was being considered.  The hope was that the economy would pick up as a result of "cheap money" but that has not happened. Pumping money into the economy, inflating the existing dollars, is not a good idea and it certainly can not continue for long since it destroys the buying power and wealth of the country.
 
Factor in that it's not just here in the US, but more broadly, in many of the major financial players in the world, who are in a similar predicament and are also looking for the easiest, least painful way out..... while knowing that no matter which door they choose, there will be major, and painful financial repercussions.
 
When the situation finally does arrive, many companies will be forced to liquidate assets and it will be ugly.....
 
Just saw Portugal and Spain are soon to be back in the news and the US debt ceiling is coming on fast...again.... how much further can we kick the can? Even strong, well managed businesses will have difficulty remaining solvent in a global money crisis.

If they use inventory that is "fronted" to them for collateral on a loan who gets the inventory if they default? I wonder if this is what happened to MARS. Also, I thought MF and GC were the same company.
Maybe this expains why I got a call from some GC salesman a couple of weeks ago, first time ever. Then again I got a call from Tim at SW last week too. I used to buy at GC regularly and I have a GC credit card but I really preferred MARS, they were always more laid back and the store itself was MUCH better. We now have a SAM ASH store down the road from GC and it seems, to me, to be more well stocked and I like the lay out better. We have a small local chain that is OK too, Ken Stanton, then in town we have one or two small stores that sell a few PV SS amps, lower end guitars and cater to the school music programs.
 
I have been able to get GC to match SW sale prices and eat the sales tax so I get "out the door" with the same price as I would buying online with free shipping. I know they can't be making the money they need once they pay a sales comission but that isn't my problem, yet. If the bigbox music stores fail we will all be paying more for what we want and need. Then again I don't think Sweetwater, B&H, or Florida Music are going anywhere and they all have great prices.
 
I hope they make it. Maybe they can get a "bailout". Then again probably not, they aren't a union shop.
 
J

Maybe they could get an out??  A billion here a billion there pretty soon you're talking about real money.
 
J