KEY POINTS:
This credit crunch is a cruel and unforgiving beast. Half way through the interim results season and the true toll it is taking on some of our brightest corporate hopes is starting to emerge.
Debt is the word on everyone's lips and it is being uttered with morbid finality - as if it were black plague.
Ironically it was last week's announcement from Fisher & Paykel Appliances - which doesn't actually report in this cycle - that sparked the panic and honed investor focus on corporate borrowings. Now any hint of balance-sheet weakness looks likely to be severely punished.
Given the miserable state of the banking sector, and the high cost of raising cash by other means, much of the investor fear is justified.
But leaping to the conclusion that all companies with debt issues are about to topple and fall is dangerous. Investors risk creating a self-fulfilling spiral as they bail out. As the share price falls a company's equity position goes with it. The debt to equity ratio blows out further and the bankers - these days more paranoid than P addicts - start closing in.
Even if those blighted with debt find financing to survive they will be left floundering at penny-dreadful prices.
Their so called "white knights" will surely be foreign bargain hunters - private equity raiders that lurk in the shadows waiting for the market to hit bottom and rival trade buyers eager to snap up good brands and market position for a song.
Of those that have owned up to debt concerns thus far - F&P Appliances, Nuplex, ProvencoCadmus - none is necessarily a company of national interest in its own right.
But collectively their departure from the NZX would deal a body blow to the exchange which has little going on in the way of major new listings.
That New Zealand needs companies to dare and dream of international expansion has been the rallying cry for a decade.
Now in cold light of hindsight it is all too easy to point the finger at business leaders and accuse them of expanding too far and too fast.
The Government should look closely at what it can do to help the most vulnerable survive. Before it spends billions to create jobs it may want to consider spending millions to save jobs.
But whichever way that national debate should go this crisis is too big and New Zealand too small for the indulgence of schadenfreude.
