Economy

mahatmakanejeeves

(57,446 posts) Mon Apr 8, 2019, 02:49 PM Apr 2019

What will happen to the economy when leveraged loan defaults pick up? Beats me.

David Fahrenthold Retweeted

I spoke to more than 30 senior administration officials, current and former regulators, congressional aides, bankers & analysts for this piece. Almost all of them said they have no idea what will happen to the economy when leveraged loan defaults pick up.

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What will happen to the economy when leveraged loan defaults pick up? Beats me. (Original Post) mahatmakanejeeves Apr 2019 OP

That solution was never Wellstone ruled Apr 2019 #1

pretty straightforward, i think. unblock Apr 2019 #2

Wellstone ruled

(34,661 posts)

1. That solution was never

Reply to mahatmakanejeeves (Original post)

Mon Apr 8, 2019, 03:05 PM

Apr 2019

taught at the Chicago School of Economics under Milton Freidman. Supply Side economics on Roids.

unblock

(52,227 posts)

2. pretty straightforward, i think.

Reply to mahatmakanejeeves (Original post)

Mon Apr 8, 2019, 03:28 PM

Apr 2019

when defaults pick up, lenders will back off, either widening spreads (i.e., charging more) or freezing new investments altogether.

at that point, leveraged companies will be in a tough spot when their debt comes due and a big chunk will go reorganize under bankruptcy laws, which will hurt lenders even more.

the question is, do we then stabilize at a new level and recover from there, or does it spiral down and drag down much of the rest of the economy with it.

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