New Report: Worldwide Bankruptcy Wave About to Hit

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I believe that many companies are waiting until after the holidays, to reveal their "real" financial situation. Just like other companies that kept the fact they are not really solvant, until it becomes absolutely neccessary (Enron, AIG, K.B toys etc) - we will be surprised and shocked over the "big" companies that will be closing by spring of 2009.

All of those strip malls built everywhere in the suburbs will have vacancies throughout. Then from there, what few stores survive the economic situation, will have a tough time with the landlords staying solvant. It will be a circle - due to the commerical land owners than not being able to pay their bills due to not having many tenants.

Many companies are hanging by a thread, though they don't release that information until they are at the end of their rope. It is going to be a complete survival of the fittest, and even the fittest might become too lean to stay in business.

I believe by this time next year our strip malls, shopping malls are going to look very different. Walmart might be the only place to get things for Chirstmas - next year.

Europe and the U.S. are about to experience a significant increase in business failures.
That's the conclusion reached by Paris-based Euler Hermes, the world's largest credit insurer, in a recently released 57-page report on business insolvencies worldwide.
With the exception of Japan, which recently emerged from its own "Lost Decade," Euler expects that almost every country in the world will see a rise in insolvencies far greater than previous economic downturns.
According to Euler, 28,000 businesses went bust in the U.S. in 2007. In 2008, that number increased nearly 45 percent -- to 42,000 insolvencies. Chapter 7 liquidations, Chapter 11 reorganizations, and Chapter 13 filings for individuals all showed dramatic increases in 2008; the only decrease came in the area of Chapter 12 filings, a chapter of the U.S. bankruptcy code usually reserved for family farmers and fishermen. (Who knows--maybe we'll all be farming or fishing six months from now.)
In 2009, Euler estimates that an additional 62,000 U.S. companies will become insolvent. If accurate, those numbers would mark the largest increase in corporate bankruptcies since the U.S. recession of 1993.

I think this is probably right.

I went to Woolworths a couple of days ago, and the shelves were pretty much empty.
For those who don't know, Woolwoths was a British institution on the high street. It was a surprise to know they had gone under, no one really expected that at all.
It was eerie walking through there, and we actually talked about how many more large chains might be in trouble and going the same way and just not mentioning it.

I don't know what the figures are for retail this Christmas, but the way so many shops are slashing prices, it reeks of desperation. As previously healthy retailers now have to compete so dramatically with those really struggling prices are coming down and so is profit. It wouldn't surprise me if the competition is causing more damage than the original crisis itself.

I think a lot of people determined to manage Christmas on a budget, but they're not really seeing any financial hardship just yet, so they're still spending, just not as much.
Come the new year, I think the majority will go back to saving and the retail and leisure industries will suffer the most.

I think by March/April time, we'll see a whole lot of well known companies sinking unfortunately.

Yes, this is about to hit in here pretty soon as well. Everyone is waiting for the christmas revenue boost before they liquidate.

Its really hitting the fan, all the countries that follow the 'western' system are getting a real kick in the pants.

I beg your forgiveness in regards to my lack of economics, but is it even possible to have a "worldwide bankruptcy"? I mean how can everyone be out of money at the same time?

Sincerely,

m.

Originally posted by Manawydan
I beg your forgiveness in regards to my lack of economics, but is it even possible to have a "worldwide bankruptcy"? I mean how can everyone be out of money at the same time?

Sincerely,

m.

I used the same headline as the article, which the source is linked. I did not change it.

reply to post by Manawydan

Look up Dubai Portsworld.That is where the ultra rich are flocking.With all the money.And Backseat Dick.Every time I hear of how much the top 1% own it gets higher and higher compared to the rest of us.Ten years ago it was more than 50%.It is now prob way more than 85%.This situation is what that really means.We've been had.I'll look it up as I am curious and will post the figure in a couple min's...Ok the first site I got has 102 new billionaires bringing the world total to 793.And 800 individuals own 5% of the world's wealth,2.6 trillion.Cheerio


[edit on 22-12-2008 by trueforger]

Yes, the corporate herd is about to be culled in a big way.

On the retail side, you can look to every catagory and probably reduce the number of competitors by half, at least.

Office Depot, OfficeMax, Staples -- do you honestly see all these three surviving? My prediction is O.D. will bite the dust, leaving OfficeMax and Staples to duke it out.

I think we'll see further attrition in electronics (I wonder about Radioshack's survivability), among chain drug stores (CVS and Rite Aid are the weaker players here), certainly among car dealerships and even among chain grocers as Super Wal-Mart is truly killing the regional players.

Originally posted by Manawydan
I beg your forgiveness in regards to my lack of economics, but is it even possible to have a "worldwide bankruptcy"? I mean how can everyone be out of money at the same time?

Sincerely,

m.

See current events for example.

The Fiat money, deposit guarantee, central banking system that the western world uses has basically flooded the market with money that never existed. This in turn has led to a cascade of bad debts leading to "Western Bankruptcy" which will in turn damage the global economy more than we can really imagine at the moment.
It is kind of leading to a "Global Bankruptcy" but not really.

Corporate bankruptcies,sure there will be plenty.I believe they will pale in comparison to the personal bankruptcies that will be filed next year.Credit card companies are already pulling out all the stops.They have even gone as far as holding mail back to force late payment fees.They want to make all they can before the axe falls.

I don't know about global bankruptcy but I know for sure that the way the holidays has gone in this nation with consumer spending is been already told that many more businesses will be closing their doors and more people will be unemployed right after the holidays.

So at least we know the trend here in the US.

Here in Australia comsumer spending is still high with the Government hending money out to Families and Elderly. However, there are many organisations in deep financial problems and are not disclosing this fact with fear that their share price will drop further. Just recently a mining company here in Australia was unable to pay its suppliers and had to give them shares in exchange.....