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But the absence of credit poses a practical obstacle to their reorganization through bankruptcy proceedings: Who wants to extend a loan to companies with such shaky prospects?
"The combination of a squeeze on real take-home pay and a decline in the availability of credit poses the risk of a sharp and prolonged slowdown in domestic demand.
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But the recent tightening in the credit markets poses the most significant challenge to policy makers since the Fed stopped raising rates in June 2006.
Jan Ehlen, a spokesman for BMW, says availability of credit still poses a problem for car buyers and will continue to do so.
And for the first time, the Fed bluntly acknowledged that the credit crisis posed a threat to economic growth.
Yes, if it had reason to believe that the collapse of the hedge fund and an incipient tightening of credit conditions posed a systemic risk.
"The key to success to investing in the group is the ability to analyze the credit risk" posed by the company.
However, the report said, "The rating is constrained by the credit challenges posed by India's poor social and physical infrastructure, low per capita income, high government deficit and debt ratios, a complex regulatory environment, and a tendency towards inflation".
Poles have bought more than 500,000 new cars each year for the last four years, reflecting the prosperity and an explosion in consumer credit, but posing dangers for more inflation, already at 11.6percentt in July, a two-year high.
Instead of pointing to actual weakness in the broad economy, they have focused on worries that the deepening fall in housing prices and the fears running through the credit markets pose dangers that ought to be addressed.
But a big part is missing from the media coverage, and it's exactly the reason people took out subprime loans — they had bad credit and posed a big risk to the lenders.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com