"In a new "Bottom Rung" list, credit ratings agency Moody's names 283 American companies that it says may file for insolvency in the medium term.
"Tight credit markets and the global economic downturn are rapidly swelling the population of US companies with [a] high default risk and weak liquidity," Moody's said in its report.
The list, which will be updated quarterly, names the firms that are the most likely to have difficulties paying their debts. Just 157 companies would have made the list if it had been compiled last year, Moody's said."
Among those named are
"US industrial companies such as Eastman Kodak, media firms such as Univision Communications and carmakers including Ford and General Motors have a 45% chance of going bust in the next 12 months"
And here is the payoff, and if this doesn't scare you what will...
"The global default rate among speculative-grade (lower-rated) companies is expected to soar to 14.8% by the end of this year, compared with 5.2% at the end of February, according to Moody's.
At present, most defaults are in the US, because the recession hit the country before Europe, following the collapse of the sub-prime mortgage market. Of the 17 defaults in February, 13 were in the US, two in Brazil and one each in Denmark and Ukraine.
In Europe, however, the recession is expected to lift the speculative-grade default rate to 22.5% by the end of this year, from 2.7% at the end of February."
1 comment:
And Obama thinks his ideas like the whole stimulus bill that was pushed through, and all of this new spending is going to fix the problem. It does nothing to create long term jobs. These are all short term projects that they want to do. What are all of these people working on these projects going to do once everything is fixed? They will be jobless without any where to turn and the economy will go back down. If we are going to throw money around, lets throw some into creating jobs outside of the government. One job resource that could use a jolt of life is our manufacturing industry. I was reading articles over at americanboom.com about how much of this problem could have been avoided if we had not outsourced all of our manufacturing to China. We need to stop relying on the government to bail us out and start bailing each other out. If we support companies that employ Americans then maybe they will not move to China.
Post a Comment