Part 2-of-2Market analysts anticipated that 2009 filings would challenge the record set in 2001, which was directely related to the Dot Com bust. In 2001, there were 383 public companies that went bankrupt. The total number of corporate filings in 2009 were surprising not record setting, but in fact, more than 100 shy of the 2001 record. That certainly puts the matter into perspective on some level. Recent banckruptcy data illustrates the rate of corporate filings began to slow down during the last quarter of 2009, which may be a positive indication that corporate finances are beginning to stabilize. On a more cautious note, however, it could be argued that this is merely a temporary lull. Lets hope that this is not the case.
Economic fundamentals suggest that bankruptcy rates usually lag behind other economic indicators. Therefore, it will be at least another six months before we begin to really see steady decrease in filing for businesses. Case in point: the recent manufacturing numbers reportedly showed a strong turnaround, and the unemployment rate did actually dipped below 10% two weeks ago. Although the financial markets continue to fluctuate, the manufacturing and onsumer spending reports depicted much needed traction, and offer a glimmer of hope that the economy is beginning to breath on its own. Part 2 of 2
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- K. Reilly
Cohn-Reilly Report
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