Big bankruptcies are piling up, and the wave isn’t slowing down. Weight Watchers, AMC, Fossil—just a few names circling the drain, with many more on the edge. High interest rates are exposing weak businesses faster than they can patch their balance sheets. The era of cheap debt let these companies survive long past their expiration date, but now the bill is due, and there’s nowhere to hide.
S&P is finally waking up to reality. They just bumped their default rate prediction for leveraged loans to 1.6%. That’s a number worth watching. Unlike the speculative-grade default rate, the leveraged loan index follows stricter rules on what qualifies as a default. It doesn’t count distressed exchanges, meaning the real damage is likely even worse than what they’re reporting. But here’s the real question—why did S&P stop publishing bankruptcy numbers? They raised their default rate predictions, downgraded a string of companies last week, and acknowledged that defaults are rising. Yet, suddenly, they’re quiet about how many firms are actually going under.
This isn’t about speculation anymore. The stock market is a show, and everyone’s playing a role. Think of it like bodybuilding—competitors don’t have to be the strongest, just look the part. That’s Wall Street. A company doesn’t need to be profitable, it just has to convince enough people that it might be one day. The right accounting tricks, the right credit ratings, and the right spin keep the game going. Meanwhile, truly great companies don’t waste time hyping up EBITDA or “adjusted earnings.” That’s the language of the desperate. Wayfair, and plenty of other money-burning businesses, want you to believe they can lift the weight. But when it’s time to prove it? They crumble.
This is the system as it stands. Interest rates are forcing reality back into the picture, and a lot of businesses won’t survive it. The cracks are turning into collapses, and the only thing left to see is how many will fall.
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