Economic Meltdown Claims 2 More Corporate Bodies

[marmar]

from Bloomberg:



WCI, Boscov Are Bankrupt as Recession Concern Rises (Update1)

By John Glover and Rob Copeland

Aug. 4 (Bloomberg) -- WCI Communities Inc., the homebuilder chaired by billionaire Carl Icahn, and department-store chain Boscov's Inc. filed for bankruptcy as company defaults escalated amid concern the U.S. is teetering on the brink of a recession.

The U.S. default rate at the end of June was 2.4 percent, a figure that will probably rise to 5.4 percent by December and 6.1 percent through June next year, Moody's Investors Service said last month. By the second quarter, 35 companies had failed to repay their high-yield, high-risk debt, more than in the whole of 2007, New York-based Moody's said.

U.S. companies that depend on a robust housing market and consumer spending are hurting as consumers, concerned about their jobs and watching their homes lose value, rein in spending. Near- record oil prices are translating into fewer trips to shopping malls and less spending once there, as well as better sales at discounters such as Wal-Mart Stores Inc. and Costco Wholesale Corp.

``These are in sectors that are clearly good leading indicators of the overall default rate,'' said Martin Fridson, chief executive officer of Fridson Investment Advisors in New York. ``The big question now is to what extent the pain will spread into wider industrial credits.''

Merrill Lynch & Co.'s U.S. High-Yield Distressed Index comprised 450 debt issues with a total face value of $217 billion as of Aug. 1, 22 percent of the value of the benchmark U.S. High- Yield Master II Index. A year ago, there were 53 issues in the distressed index with a value of $13.8 billion, accounting for 1.5 percent of the wider speculative-grade index. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=avQ428y2z41o&refer=home

[Andy823]

1. At least it's good to know

That Bush has not only screwed over the average American, but some of his corporate buddies are getting the shaft as well. Do you think they will be voting for Obama this year? :shrug: