Chaikin Money Flow drop below 4-year average often signals recession or market peak; Financial conditions are oddly starting to tigthen

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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.

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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.

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