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The World
December 18, 2008 2:00 PM
New Report: Worldwide Bankruptcy Wave About to Hit
Posted by Brian Baxter
Europe and the U.S. are about to experience a significant increase in business failures.
That's the conclusion reached by Paris-based Euler Hermes, the world's largest credit insurer, in a recently released 57-page report on business insolvencies worldwide.
With the exception of Japan, which recently emerged from its own "Lost Decade," Euler expects that almost every country in the world will see a rise in insolvencies far greater than previous economic downturns.
According to Euler, 28,000 businesses went bust in the U.S. in 2007. In 2008, that number increased nearly 45 percent -- to 42,000 insolvencies. Chapter 7 liquidations, Chapter 11 reorganizations, and Chapter 13 filings for individuals all showed dramatic increases in 2008; the only decrease came in the area of Chapter 12 filings, a chapter of the U.S. bankruptcy code usually reserved for family farmers and fishermen. (Who knows--maybe we'll all be farming or fishing six months from now.)
In 2009, Euler estimates that an additional 62,000 U.S. companies will become insolvent. If accurate, those numbers would mark the largest increase in corporate bankruptcies since the U.S. recession of 1993.
The situation is just as bad in Europe. Euler expects the number of insolvencies in Western Europe to rise from 169,000 this year to 197,000 next year, an increase of 16.7 percent. U.K. firms will account for a large portion of that bankruptcy surge, with the burst of the real estate bubble and worsening finance and banking crisis creating havoc for British companies. Spain is also expected to be particularly hard hit from the collapse of the construction and real estate market.
Euler believes that German companies will continue to suffer from bad debt risk, while The Netherlands, which underwent only a 10 percent increase in bankruptcies this year, will see its insolvency numbers jump nearly 40 percent in 2009. In Eastern Europe, the Czech Republic and Hungary will see bankruptcies increase by 15 and 20 percent, respectively.
As corporate failures become more widespread, Euler states that it will take actions to solidify its own business. The credit insurer will increase the premiums it charges to act as an underwriter on deals.
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For God's sakes, just get off the fiat, debt-based money system. Back a country's money 100% with silver and gold, outlaw fractional reserve banking, and make all loans strictly from saved capital. You're going to be forced to this conclusion anyway, so let the g.d. banks fail so a new honest system of money creation can arise.
Comment By acudoc - December 22, 2008 at 3:49 AM
Listen to economic experts interviewed on the Alex Jones show. They are all free MP3 downloads at http://drop.io/Summerbird Included are, Gerald Celente, Max Keiser, Paul Craig Roberts, Bob Chapman, Patrick Carmack and others. America is being deliberately destroyed by the banksters. (Bank Owning Gangsters.)
Comment By Edward S. - December 22, 2008 at 3:50 AM
People will accept anything or anyone if they're homeless and hungry of if it gets them food on a plate...do you think these 'elites' deserve to win? Are they the ones who have done the hard work in the trenches or the ones who capatilised on others hard work? TIME TO TAKE THE POWER BACK PEOPLE!!! It is better to die on your feet, than live on your knees!!!
Comment By W Smith - December 22, 2008 at 9:11 AM
Comment By acudoc - December 22, 2008 at 3:49 AM
"For God's sakes, just get off the fiat, debt-based money system."
Jct: Nothing wrong with fiat money we can pay our taxes with. Nothing wrong with debt-based money either.
"Back a country's money 100% with silver and gold, outlaw fractional reserve banking, and make all loans strictly from saved capital."
Jct: Nothing wrong with fractional reserve banking except that it's stupid, nothing wrong with making loans out of new chips, and no need to make our chips out of metal rock.
"You're going to be forced to this conclusion anyway, so let the g.d. banks fail so a new honest system of money creation can arise."
Jct: The Gold Standard was just as oppressive as the non-gold standard since the instability is the positive feedback on debt, usury, not the medium of the token, whether in metal, paper or wood.
Comment By Edward S. - December 22, 2008 at 3:50 AM
"Listen to economic experts interviewed on the Alex Jones show. They are all free MP3 downloads at http://drop.io/Summerbird Included are, Gerald Celente, Max Keiser, Paul Craig Roberts, Bob Chapman, Patrick Carmack and others. America is being deliberately destroyed by the banksters. (Bank Owning Gangsters.)
Jct: Never heard of any of these so-called experts in banking systems engineering.
John the Banking Systems Engineer Turmel.
www.youtube.com/kingofthepaupers
Comment By KingofthePaupers - December 22, 2008 at 9:11 AM
People will pretty much allow a government to do anything to them, until they are hugry.
When the people start to starve, governments fall.
Its the easiest indicator of upheaval, keep your eyes open over the next decade!
Comment By Schmay - December 22, 2008 at 9:46 AM
fraudulent inflation of housing prices destroyed usa
economy, a roof can cost no more then 30% of income or the economy and people are destroyed. there are 22.6 million surplus housing units in usa, the housing inflation was a con like the tulip craze in amsterdam
Comment By no - December 22, 2008 at 10:36 AM
i think euler is right. i also think it's about to hit the fan in the 2nd quarter of 2009
http://www.youtube.com/watch?v=jrfG2r4bTOc&feature=channel_page
Comment By rich - December 22, 2008 at 10:47 AM
Paul Craig Roberts, because he stood up to the Bush Admin. through each of the absurd episodes the Admin. used to con us into an unafordable war.
Max Keiser, because he's truly a nice broker, who once he figured the actual risk-reward game being played on Wall St., chose to come clean and actually help all investors.
And the point of this article is preparedness, as in note how little that 'city people' can actually do about all of this. You can keep silent and die in the urban decay, or you can take up gardening like those of us who have been composting since the 60's.
Comment By Tom-Scott Gordon - December 22, 2008 at 3:31 PM
62,000 businesses becoming insolvent in 2009 is quite sensational, but without details, that's all it is.
There are over 30,000,000 businesses in the US. They range from one or two person operations up to those employing tens of thousands.
62,000 represents .02% of that figure. Not exactly earth shaking
Comment By pjdarling12 - December 22, 2008 at 11:50 PM
Its time to strip everything from all the greedy bankers and politicians. Take the power back. That's how the forefathers did it. America was not legislated into being, it was brought into being - by FORCE. That's why you have the RIGHT TO BEAR ARMS. Mao said - "Political power flows from the barrel of a gun". Now you know.
Comment By warrior - December 24, 2008 at 9:43 AM
Your post was incredibly timely, looking back.
Comment By chapter 11 bankruptcy - March 20, 2009 at 7:16 PM
I would say this article was pretty accurate. In our area commercial bankruptcies are also on the rise.
Comment By arizona auto insurance - May 2, 2009 at 6:45 PM