Corporate Bankruptcies Surge: 2024 Sees Second Highest Tally in 14 Years, Economic Clouds Gather

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The year 2024 is shaping up to be one of the most tumultuous for large corporations, with 452 firms declaring bankruptcy so far—the second-highest number in 14 years, only surpassed by the 466 bankruptcies recorded in 2020 amid lockdowns. August alone saw 63 bankruptcies, up from 49 in July, marking one of the worst months in recent years. The hardest-hit sectors? Consumer discretionary, industrials, and healthcare, with 69, 53, and 45 bankruptcies, respectively.

For the first time since the pandemic, the economic slowdown is palpable, with businesses struggling under weaker sales and rising costs. NFIB data shows that 37% of respondents are reporting deteriorating earnings—the highest share since 2010. The storm isn’t over yet; volatility is expected to persist as the US economy faces staggering realities:

  • 1 million full-time jobs lost in the last year
  • A downward revision of 818,000 jobs from the 12 months through March 2024
  • $2.1 trillion in excess savings wiped out in three years
  • A record $35.2 trillion in national debt
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Meanwhile, Wall Street has been rattled by Warren Buffett’s sudden sell-off of $5.4 billion worth of Bank of America stock. As BofA’s largest shareholder and long-time financial sector bull, Buffett’s retreat raises serious red flags. Could this be a harbinger of deeper economic turmoil? With his keen market instincts, his dramatic exit from one of his most favored stocks sends an unmistakable warning: tough times lie ahead, and investors had better brace for the storm.

Sources:

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www.dailymail.co.uk/yourmoney/article-13836173/Warren-Buffetts-BILLION-warning-investors-dumps-popular-stock-Wall-Street-Bank-America.html

www.statista.com/statistics/217824/seasonally-adjusted-monthly-number-of-job-losers-in-the-in-the-us/

www.usatoday.com/story/money/2024/08/21/jobs-report-revision-growth-lower/74886965007/

budget.house.gov/press-release/-818000-fewer-jobs-added-to-the-economy-than-previously-reported

www.cbsnews.com/news/big-lots-bankruptcy-discount-retailer/

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