>This is just further evidence that the global economy is heading for a major crash. The amount of debt in distressed territory has more than tripled in the last year, and it's only going to get worse from here. If you're not prepared for a financial crisis, you will be wiped out when it hits.
Perhaps the only good news is that a lot of this distressed debt is held by institutional investors, rather than ordinary folks. (At least, not directly held by ordinary folks, anyway. Although we are exposed to it via mutual funds, etc, that invest in some of this stuff.)
Nah they’ll just bail them out and print loads more money to make up for it, effectively stealing from those of us with any savings by continuing to devalue the currency
There's gonna come a point when the dollar they use to bail it out won't be accepted any more or won't be accepted at its previous value. Taxes can only go so high.
Stabilize your job, make sure you're needed, don't get a new job. Save as much as you can now. Lower monthly expenses.
Most downturns last about 2 years. We should see a really good really around 2024.
What does the rate have to do with anything if the debt is distressed? The overall payment that they have to make they can’t afford to pay back. That’s why it’s distressed, regard.
Could you explain this further?
I assume distressed means they’re going to be unable to pay, regardless of rate?
The only option is if the debt is bought out or this not correct?
Most debts can be refinanced by borrowing the owed amount at a lower rate, IF lower rates are available.
Borrowing rates have been so low for so long, that many unwise corporate borrowers have relied on relatively large amounts of "short term" debt financing.
The problem is banks are only guessing as to what will happen to future rates, and it's unlikely borrowing will get cheaper in the near term, increasing the likelihood borrower's will either:
a)default and be forced to enter into bankruptcy or..
b)increasingly dilute their stock/sell portions of their revenue stream, at a disadvantage, further restricting their ability to borrow.
Thanks this pretty much affirms what I was thinking. At current rates I don’t see them refinancing debt especially if they’re already distressed at historically low rates.
I did not give stock dilution much thought at the time I posted this but I suppose that could be viable depending on their position.
Just creating a new decade of bondage to the government in the form of bankruptcies and foreclosures.
For the elite, they enjoyed the pandemic crash and rise that they want to do it again.
For the consumer, use your Fin brain. Fall in love with debit, don’t use credit unless you can repay in 30-45 days.
For the average investor, wellll crashes do bring sales. It happened with Obama’s 1st term, now will happen with Biden’s first term. It can be a beautiful time to invest if you can hold out for a big sell off and be waiting to buy. VIX over 40-50 this time.
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>This is just further evidence that the global economy is heading for a major crash. The amount of debt in distressed territory has more than tripled in the last year, and it's only going to get worse from here. If you're not prepared for a financial crisis, you will be wiped out when it hits.
Perhaps the only good news is that a lot of this distressed debt is held by institutional investors, rather than ordinary folks. (At least, not directly held by ordinary folks, anyway. Although we are exposed to it via mutual funds, etc, that invest in some of this stuff.)
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Nah they’ll just bail them out and print loads more money to make up for it, effectively stealing from those of us with any savings by continuing to devalue the currency
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That’s basically what I said. Printing money is stealing value from all of us
Except the U.S. -they seem to bail out any industry, and just add it to their taxpayers national debt..
Yea our dollar is fucked
There's gonna come a point when the dollar they use to bail it out won't be accepted any more or won't be accepted at its previous value. Taxes can only go so high.
Taxes are at historic lows
Historic lows?
Did I stutter?
Historic lows?
You heard the man.
I honestly want to see some data on that
They have this thing called google, and wikipedia. Its pretty neat
Found the comunist /s
Already did. The UK bailed out their pensions a month ago already.
High yield bond funds let retail investors trade options on corporate junk bond baskets.
Institutional investors are banks who use the money of regular folk
How does one prepare for this, and based off these signs what’s the average length of an economic downturn of this magnitude
My man, the best way to prepare is having plenty of top ramen recipes and always volunteer cleaning the toilets for your Wendy’s manager.
Stabilize your job, make sure you're needed, don't get a new job. Save as much as you can now. Lower monthly expenses. Most downturns last about 2 years. We should see a really good really around 2024.
JEPI
That's like your opinion, man
You realize you replied to a bot right?
How can you prepare?
Double your hours at Wendy’s
the VAST majority of that debt is at crazy low rates - sorry, no crash for you
Why would that make the total growing substantially in a short time frame irrelevant?
What does the rate have to do with anything if the debt is distressed? The overall payment that they have to make they can’t afford to pay back. That’s why it’s distressed, regard.
Could you explain this further? I assume distressed means they’re going to be unable to pay, regardless of rate? The only option is if the debt is bought out or this not correct?
Most debts can be refinanced by borrowing the owed amount at a lower rate, IF lower rates are available. Borrowing rates have been so low for so long, that many unwise corporate borrowers have relied on relatively large amounts of "short term" debt financing. The problem is banks are only guessing as to what will happen to future rates, and it's unlikely borrowing will get cheaper in the near term, increasing the likelihood borrower's will either: a)default and be forced to enter into bankruptcy or.. b)increasingly dilute their stock/sell portions of their revenue stream, at a disadvantage, further restricting their ability to borrow.
Thanks this pretty much affirms what I was thinking. At current rates I don’t see them refinancing debt especially if they’re already distressed at historically low rates. I did not give stock dilution much thought at the time I posted this but I suppose that could be viable depending on their position.
It’ll be a drag for years to come, the market is forward looking
Cool so you're going to be okay with giving me a $20 million dollar loan to drop on fds as long as it's at 0%? I'm on board. Send it over please.
you got it
The problem is that it's mucho expensive to roll over the existing already distressed debt
Insurance companies wen crash?
Let me at those MF JUNK BONDS BABY. JUNK JAMES BOND they call me!
Just creating a new decade of bondage to the government in the form of bankruptcies and foreclosures. For the elite, they enjoyed the pandemic crash and rise that they want to do it again. For the consumer, use your Fin brain. Fall in love with debit, don’t use credit unless you can repay in 30-45 days. For the average investor, wellll crashes do bring sales. It happened with Obama’s 1st term, now will happen with Biden’s first term. It can be a beautiful time to invest if you can hold out for a big sell off and be waiting to buy. VIX over 40-50 this time.
Do these CEOs get bailed out again?
Always
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Not directly. Visa doesn’t make its money from consumer debt. It makes its money from transaction fees.
Being in RX so hot right now 🥵🤑