In yet another sign that the U.S. economy is still plummeting downward, bankruptcies of large, U.S. corporations increased by 60% from the previous four-week period, according to a Reuters article, which obtained the numbers from BankruptcyData.com.
Led by long-term care operator Extended Stay Inc, and theme-park operator Six Flags (SIX), there were eight corporate bankruptcies in the last four weeks of corporations with more than $1 billion in assets, compared with five in the four weeks before that.
With U.S. consumers having no savings, no credit, and declining wages, there is no possibility of the retail sector strengthening in the U.S. Indeed, with the U.S. economy still losing roughly two million jobs per month (see “U.S. economy to lose 20 MILLION jobs this year”), the retail sector is certain to lead the U.S. economy in bankruptcies, going forward indefinitely.
Meanwhile, in the U.S. housing market, foreclosures remain near record-highs, delinquencies continue to break new records every month, and home-prices continue to fall more than three times as fast as during the worst of the Great Depression. This means that Americans are still losing trillions of dollars per year in “paper wealth”.
With debt-levels also at all-time record highs, individual bankruptcies are soaring, as well. In the twelve-month period ending March 31, there were 1.2 million bankruptcies in the U.S., more than doubling the level of bankruptcies from three years ago.
This soaring bankruptcy rate comes despite changes in bankruptcy laws which makes it much harder for individuals to be allowed to declare bankruptcy. Barbara Lynn, who heads the Judicial Conference of the United States is recommending that the U.S. government increase the number of bankruptcy judges by 13, while making 22 “temporary judgeships” permanent.
Is adding large numbers of bankruptcy judges now consistent with an economy which has “bottomed”?
In the meantime, the Obama regime, Wall Street, and clueless, media-parrots continue their inane chatter that the U.S. economy is starting a “recovery”, or to be more precise a “jobless recovery” - where there will few discernible signs of economic improvement.
For Americans who continue to lose their jobs, lose their homes, and lose their businesses, it is only a matter of time before they cease listening to Ben “I-cannot-tell-a-truth” Bernanke – when his 5th prediction of an “economic recovery” turns out to just as baseless as his first, four predictions.
Based on the previous pattern, Bernanke will be forced to abandon his prediction of “an economic recovery in the second half of 2009” in the next few days - since the 2nd half of 2009 starts in less than two weeks. After that, Bernanke will lie low for a month to six weeks, then emerge from hiding and announce his 6th prediction of an “economic recovery” - with the new start date for that “recovery” being the first half of 2010.
Maintaining the pattern, Bernanke will suffer complete “amnesia” and not remember his “prediction” that the recovery was supposed to be starting now (nor any of the other “predictions” before that).
Meanwhile, the entire U.S. media will suffer an identical bout of “amnesia” - and also forget about all of Bernanke's previous “predictions” as they pump his next “prediction”.
...and the bankruptcies of large U.S. corporations in the next four weeks will likely exceed the number of bankruptcies in the last four weeks. Welcome to the world of U.S. “economic recoveries”!
Disclosure: I hold no position in Extended Stay Inc. or Six Flags.