Tuesday, September 23, 2008

A sure sign credit markets are frozen

It was reported yesterday that Bank of America, the buyer of Countrywide Mortgage and more recently one of the teetering investment banks, Merrill Lynch & Co, is not willing to loan to McDonald's franchisees seeking cash to upgrade their stores. This is amazing to me. I know that McDonald's has a pretty good track record for successful franchises, and franchisees likely generate great cash flow. McDonald's stock has been preforming greatly during these tough times as well so if anyone needed any further confirmation that credit was becoming a larger problem, now you have it. The banks have closed up shop to wait for brighter days ahead and this is a perfect example of how crazy it has become in the credit markets. Congress should take note.

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