And that is why, says Deep Tank, "you're about to see a shitstorm of epic proportions."

[Nathan_Smyth]

@Jim Sawitzke

To some degree, and in hindsight, possibly. But really this fits the typical bank asset-based lending model, which generally works fairly well as long as there isn’t a once-in-a-generation economic catastrophe. It’s not much different than, say, making a loan to a small newspaper publisher to purchase a printing press. Your collateral is the printing press and I guess the newspapers it prints…not worth a whole lot if the loan defaults. As long as the business is successful and cash flows the loan will be fine, but if the business starts to suffer then the bank is looking at a loss. In fact in the example above I’d say a bank lending 50% of the bulk/discounted value of the collateral is pretty conservative.

Well I guess that none of those Wharton School MBA geniuses ever bothered to read [u]Brendan Eliason’s infamous screed[/u].