The One Post to Read on Wall Street

Megan McArdle:

Banks have tens of billions of debt maturities to refinance in the coming months.  The overwhelming majority of it will be good even under distressed circumstances — unless they can’t roll any of it over.  At that point, they experience the same problems you would if your credit card company pulled your credit line and demanded you pay back everything you owe them.  

No doubt some of my readers are rubbing their hands and saying “Exactly what should happen to people who carry credit card balances!”  And I’m sure that among you there are people who pay cash on the barrel for everything, having never taken out any loan for a house, an automobile, an education, a personal financial crisis.  These people never even use an American Express Card, which is, of course, a short-term loan.  They also do not work for companies that borrow money to buy capital equipment or finance expansion, and their firms do not experience any mismatch between their payables and their receivables.  Those people should stop reading now, because I’m pretty sure the Amish aren’t supposed to use the internet.

Read the whole thing.

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