BREAKING: The number of US bankruptcies currently under Chapter 11 jumps to 2,462, the highest count in 13 years.
A Chapter 11 filing involves court-supervised reorganization and allows a company to stay in business and restructure its finances and operations. These bankruptcies have more than DOUBLED in just 2 years. This comes after many companies have struggled to make their debt payments as the Fed raised interest rates to the highest level in 23 years. Source: Bloomberg, The Kobeissi Letter
Interesting article by Financial Times:
Three in four audit reports failed to warn that companies risked going bankrupt in the year before their collapse. Here's how each of the Big Four performed: https://on.ft.com/3UFVHLG
In the last week - Commercial Real Estate Stress
- New York Community Bank (USA) - Aozora Bank (Japan) - and now: *Deutsche Pfandbriefbank, under pressure in Europe, more real estate cracks, banking concern, etc" Source: Bloomberg, Lawrence McDonald
Evergrande, which has now been ordered to liquidate, has an astonishing $300 billion in liabilities.
That places it near the very top of the all-time list of corporate bankruptcies. A lot of Evergrande's liabilities are down payments that Chinese homebuyers made on apartments that remain unbuilt. But even just looking at the bonds and loans outstanding, the amount is greater than $80 billion. Source: TME, Axios
From The Kobeissi Letter -> Bankruptcy documents show that WeWork, $WE, will immediately break 40 office leases in New York City
Documents also show that WeWork plans to break leases on 70 properties in New York City. Note that 40 of these locations are completely empty. Once a $47 billion company, WeWork still has 700 locations world wide. Could this bankruptcy worsen the commercial real estate crisis?
The bull market in bankruptcies...
Source: TME, TS Lombard
Bankruptcy filings have recently reached levels on par with the 2008 Great Recession and the 2020 COVID-19 pandemic
This indicator often suggests that the economy isn't performing well, and has historically always been followed by massive stock market crashes. Source: whalewire
Birmingham City Council 2030 bonds yield roughly 2ppts more than UK govt securities as Britain’s second-biggest city in financial dire straits
Source: HolgerZ, Axios Visuals
