Bankruptcies rise despite trillions of liquidity

Daniel Lacalle

“One of the most alarming facts about this crisis is the pace at which bankruptcies are rising. Despite an $11 trillion liquidity injection and government aid in 2020, stocks and bonds at all-time highs and sovereign as well as corporate yields at all-time lows, companies are going bust at the fastest pace since the Great Depression. Why? Because a solvency crisis cannot be disguised by liquidity.”

USAGOLD note:  Lacalle offers insight and opinion on a developing situation Wall Street ignores and most of the rest of us would rather not have to think about. “Bailing out zombie companies,” he says, “will only make things worse.”

Repost from 8-26-2020

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