Over the last week or so I’ve read about a dozen articles complaining about the declining company profits, how over-extended businesses are, and coming corporate defaults. This article at Business Insider is by far the most pessimistic:
A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession.
The Societe Generale economist, and noted perma-bear, believes that the profit recession facing American corporations is going to lead to a collapse in corporate credit.
“Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red,” wrote Edwards in a note to clients on Thursday.
If you’re the sort of person who revels in despair, read the whole thing. You’ve got a treat in store.
If he’s right steering clear of corporate bonds sounds like good advice. Stick with something solid, like Chicago Public School bonds.
