We are back to the collapse of Lehman Brothers, but this time the virus is not due to the banking system.
(Bloomberg) — Distressed debt supply has surged $234 billion to $559 billion in just the past week, escalating this month’s jump to $423 billion and setting a pace that would nearly double the $215 billion record for a single month set in October 2008. If the total ends the month at these levels, it would be the biggest-ever increase in the par amount of debt in the ICE BofAML US Distressed Index.
Energy isn’t solely driving the distressed ratio (44.5%) higher anymore as all sectors now have double-digit distressed ratios.
Commercial and industrial (C&I) lending is approaching zero growth as of February.
Fortunately for America, The Federal Reserve is on call!
Thanks to Jesse at Jesse’s Cafe Americain!