The Chaikin Money Flow isn’t a perfect indicator, but it has been highly accurate in identifying recent market tops. pic.twitter.com/I2x8I5wXYc
— Guilherme Tavares (@i3_invest) October 24, 2024
The real economy is definitely not in good shape!
Almost every time this ratio has crossed below the 4-year moving average, it has signaled either an ongoing recession or an impending one.
Will be different now? pic.twitter.com/hu7259T8XN
— Guilherme Tavares (@i3_invest) October 23, 2024
Bankruptcy lawyers and distressed debt funds are overwhelmed. The first eight months of 2024 saw bankruptcy filings reach their highest level since 2020, marking a resurgence in economic distress that is keeping lawyers and debt funds on their toes. This trend, driven by rising economic instability, isn’t showing signs of slowing.
Federal Reserve easing, intended to reduce interest rates and boost liquidity, is facing unexpected hurdles. Despite rate cuts, financial conditions have tightened as long-term bond yields spike, making borrowing more expensive. This tightening of financial conditions has created a difficult environment for struggling companies, escalating bankruptcy cases and increasing demand for legal and financial services in restructuring.
Professionals in this space—lawyers, debt funds, and asset officers—are stretched thin, grappling with an unending influx of new cases. The rising interest in distressed debt management and bankruptcy is reshaping the landscape of corporate finance and legal services.
Financial conditions are oddly starting to tigthen, despite Fed easing… 😛 pic.twitter.com/HTDfzSkprW
— Michael J. Kramer (@MichaelMOTTCM) October 25, 2024
Bankruptcy lawyers and distressed debt funds are swarming, and guess what? They are just warming up.
Spoke with numerous lawyers, debt funds, and special asset officers this week and they can’t keep up with all the work coming in.
— BankingNewsGuy (@BankingNewsGuy) October 25, 2024
Sources:
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Bloomberg Law – Distressed Company Lenders Look to Cooperate to Avoid ‘Violence’
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Morningstar – This is what the Fed’s interest-rate cut means for distressed companies
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Lake Whillans – Litigation Funding in Bankruptcy and Distressed Situations
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Morningstar – What Does It Mean That Financial Conditions Are Tightening?
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Federal Reserve – Financial Conditions and Risks to the Economic Outlook