A Tidal Wave of Bankruptcies Is Coming

[Zorro]

Experts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving.

Already, companies large and small are succumbing to the effects of the coronavirus. They include household names like Hertz and J. Crew and comparatively anonymous energy companies like Diamond Offshore Drilling and Whiting Petroleum.

And the wave of bankruptcies is going to get bigger.

Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis.

Even a meaningful rebound in economic activity over the coming months won’t stop it, said Mr. Altman, the Max L. Heine professor of finance, emeritus, at New York University’s Stern School of Business. “The really hurting companies are too far gone to be saved,” he said.

Many are teetering on the edge. Chesapeake Energy, once the second-largest natural gas company in the country, is wrestling with about $9 billion in debt. Tailored Brands — the parent of Men’s Wearhouse, Jos. A. Bank and K&G — recently disclosed that it, too, might have to file for bankruptcy protection. So did Weatherford International, an oil field services company that emerged from bankruptcy only in December.

https://www.nytimes.com/2020/06/18/business/corporate-bankruptcy-coronavirus.html

The impending tidal wave of bankruptcies will include both corporate and personal bankruptcies. Throw in some natural disasters -- hurricanes, wildfires, earthquakes -- and this country will be in extremely dire straits by the time the election rolls around.

[Moostache]

1. We are already in dire straits...by November it will be biblical...

The situation is stunningly bad and the total lack of a legitimate PLAN to guide the nation onto solid ground is stomach turning...we are rudderless, leaderless and the mast is broken off sweeping all the life boats off deck....yet our insane captain has tied himself to the wheel and will not change course or even steer the ship at all.

Captain Queeg was sane by comparison...

[Generic Brad]

2. It's going to dwarf 2008

I’m worried it will be worse than the Great Depression, to be frank. Buckle up, friends. We’re about to have the bumpiest ride of our lives.

[roamer65]

3. Massive monetization by the Federal Reserve is coming.

The Federal Reserve will risk hyperinflation before it lets outright deflation happen.

The Fed was shackled by a gold standard from 1929 to 1971.

Now there is no limit to money creation...NONE.

[I_UndergroundPanther]

4. Fuck Nixon

Removing the gold standard. Republicans ruin everything.

[roamer65]

5. I expect within 10 years we will be like Japan.

200-250 pct GDP to debt ratio.

The Fed buying up most Treasuries, Corporate bonds and even buying into the stock market.

[Initech]

6. This fucking virus just wrecked our whole society.

The sooner it's eradicated from the planet the better.

[roamer65]

10. Get ready.

Even with a vaccine, this is probably a 5-6 year fight.

[2naSalit]

15. Yup.

I have been explaining this to relatives and friends all along. People expect things be done within a given length of time. This is different and it will take a lot of adaptation along the way.

[roamer65]

16. You are correct.

Even if and when we find a vaccine, there are nearly 8 billion on this planet.

The virus will circulate even as the rollout of a vaccine slowly happens.

Plus...who gets it first? That’s the stuff civil unrest is made of.

[Initech]

19. Oh yeah if Trump is reelected, guarantee there's civil unrest over it.

He will dangle the vaccine in front of us the way a jockey dangles a carrot in front of a horse. He'll put states against each other over doses and favor those who voted for him first. Guarantee it.

[roamer65]

20. Bingo.

[MoonlitKnight]

18. Unless you are referring to Trump

The economy was already well on its way down the toilet before Covid-19. It just provided an extra nudge over the edge.

Trump’s tax cuts were the start. The trade war was wrecking the global economy. And regardless of Trump we were in the midst of a substantial change in how the economy works.

[Hermit-The-Prog]

22. By "fucking virus" you mean Republicanism, right?

[KentuckyWoman]

7. No well managed co bankrupts due to Corona.

These were poorly managed businesses with losses to start or with no reserves. Filing now gives them extra perks thanks to the stimulus that gave some $1200 and others $Millions.

[lpbk2713]

8. A lot of restaurants will probably not open back up.

They won't be able to comply with the new regs and turn a profit.

[brooklynite]

9. Don't know about your nabe...

I've seen a number of re-openings in the past two weeks. I think the new liberal policies on outdoor seating will end up becoming permanent.

[KY_EnviroGuy]

11. What on earth do they do if a storm blows in?

...............

[Generic Brad]

12. That will suck in the winter

I feel sorry for those in the north and higher elevations.

[PoindexterOglethorpe]

14. Unlike those who will soon be underwater along the coasts,

what with global warming and oceans rising.

[Green Line]

13. Restaurants here are doing great with curbside and delivery

[JmAln]

17. They're opening movie theaters here tomorrow.

No way I'll be setting foot in one anytime soon. It's a totally unnecessary risk. I wonder how many will go under. They were already on the way out before the pandemic.

[roamer65]

21. Smart move.