"Forty percent of finance executives report that their organizations have less access to short-term credit than they did one month ago, with 16 percent reporting significantly less or no access to short-term credit. As a result, 62 percent of finance executives report that their organizations have already taken defensive actions." [All emphasis mine.]
1- Placed all or most of short-term investments to bank deposits and U.S. Treasuries (41% of those in the survey) which means that those companies whose bonds would have been bought up by these financial officers are not able to get the liquidity they need by the usual means;
2- Adjusted capital spending downward (37%) which means the companies upon which these expenditures would have been made are experiencing a shortfall in sales...just as cash is thinner on the ground than ever;
3- Shortened the duration of their investment portfolios (29% of those in the survey);
4- Frozen or reduced hiring (26% of those in the survey);
5- Drawn on existing credit facilities to build cash (26% of those in the survey); and,
6- Considered staff reductions or layoffs (22% of those in the survey) which is reflected in reports such as this.
This could get worse, of course, if the credit access does not improve. Fed reports indicate the U.S. "commercial" paper (corporate notes and bonds and so forth) market contracted for the 3rd week in a row, which doesn't sound too scary, until you note that it's contracted by 11.5%. In three weeks. The same goes for all other means of short-term financing which is locking up with corporations and organizations and banks finding it well-nigh impossible to access borrowing.
Even more worthy of concern is the credit crisis is not just whacking marginal borrowers or those with so-so credit. More than anything else, this is an indication of the "tension" (a rather lovely and delicate euphemism) currently existing in the credit markets.
So you know.
* AFP (the Association of Financial Professionals is the organization that represents almost 17,000 corporate treasurers, CFOs and other finance executives.