I keep hearing Larry Kudlow talk about the “V-shaped” recovery the U.S. is now (supposedly)in the midst of.
UH, WHAT IS HE TALKING ABOUT!!!???
Right now, the U.S. is experiencing…..
- Record unemployment
- Record deficit spending
- Record national debt
- Record number of small businesses closing
Article appearing on “FinancialPost.com” this morning….
“Bond defaults deliver 99% losses in new era of U.S. bankruptcies”
Bankruptcy filings are surging, and many lenders coming to realization their claims are almost completely worthless.
(
Bloomberg News. Jeremy Hill and Max Reyes, Publishing date:Oct 26, 2020)
Copied from that article….
"Bankruptcy filings are surging due to the economic fallout of COVID-19, and many lenders are coming to the realization that their claims are almost completely worthless. Instead of recouping, say, 40 cents for every dollar owed, as has been the norm for years, unsecured creditors now face the unenviable prospect of walking away with just pennies — if that.
While few could have foreseen the pandemic’s toll on the economy, the depth of investors’ pain from corporate distress was all too predictable. Desperate to generate higher returns during a decade of rock-bottom interest rates, money managers bargained away legal protections, accepted ever-widening loopholes, and turned a blind eye to questionable earnings projections. Corporations, for their part, took full advantage and gorged on astronomical amounts of debt that many now cannot repay or refinance.
The pandemic is upending industries like retail and energy, making it unclear how much assets like stores and oil wells will be worth in the future. The underlying problem for many companies, though, is that they have astronomical levels of debt after borrowing with abandon over the previous decade, then topping up with more to get them through the pandemic."
Link to complete article:
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