How Financial Crises Lead To Recessions...

Just saw this: Société Générale, the French bank that really, really, really screwed up a while ago, has withdrawn from the financing of the Tamarack Resort. They had invested $118 mn and originally wanted to finance it all themselves, but it was decided to do it with five banks in a consortium. Two of these five still want to finance, but they lack the required capital to do it by themselves. This doesn't affect the current operations, but it does stop the expansion of the only ski resort to expand like this since the 1980s.

This is how recessions start in the face of financial pressures: because the bank screwed up, an investment is stopped. While Tamarack may well be financed elsewhere, the withdrawal is not good: penalty clauses in contracts get activated, construction gets stopped, and the economy suffers. Jobs are lost, people suffer.

All do to a lack of due diligence and incompetence on the part of the bank, in a completely and totally unrelated area of business.

Fun times...