I’ll get around to posting more detailed thoughts about the economy by next week at latest, but those of you who’ve read my posts like this or this already know that I think the global economic recovery of 2009 is a joke.
Yes, “global” includes the United States.
In “The Coming Default Wave Is Shaping Up to Be Among Most Painful,” Bloomberg.com once again provided a warning about a round of corporate bond defaults heading our way, and will be among the nastiest financial bloodbaths that we’ve seen in years.
The Wall Street Journal warned last month that the global default rate will be the highest since the 2008-2009 financial crisis.
It also seems — surprise, surprise — that much of the defaults are holdovers from the 2008 financial crisis, an additional data point that highlights 2009’s faux recovery. Consulting firm managing director Alan Holtz explains:
A lot of the troubled companies that had become overleveraged were able to find more temporary solutions in the last credit cycle,” Holtz said. “Those Band-Aids are no longer available now, and a lot of companies are going to have to face distress,” he said.
While the eight years of soaring financial markets may not have reflected the more somber Main Street realities, I get the sense that we won’t have that kind of inverse relationship if the markets tank again …
song currently stuck in my head: “what goes around comes around” – arthur monday