The 90 Day Debt Holiday is Ending… Now Comes the Bankruptcies

We are now entering the time in which the true structural damage caused by the COVID-19 pandemic will be revealed.

Back in April when the economy was on lockdown, it became clear that many large businesses were in serious trouble. I’m specifically talking about restaurants, commercial real estate and retail. At that time, multiple large chains informed their lenders that they would NOT be paying rent in April.

Cheesecake Factory, Subway, other major retailers tell landlords they cant pay April rent due to coronavirus

   Source: Yahoo! Finance. 

To deal with this issue, the banks and large financial institutions gave their borrowers 90-day forbearances on their debt payments… meaning those groups wouldn’t be required to make debt payments for 90 days.

Put another way, the banks told these businesses “don’t worry about making any debt payments for 90 days… but come July you’ll have to start paying us again.”

That was in APRIL… exactly 90 days ago.

Which means… these same businesses will now have to start making debt payments again. And if they have not TRULY recovered from the economic shutdown… we’re about to see a TSUNAMI of defaults and bankruptcies, as well as layoffs and shutdowns. 

This process has already begun as the below headlines reveal:

Wells Fargo reportedly preparing to cut thousands of jobs

United Airlines warns it could furlough 36,000 employees by Oct. 1 as demand remains low

Storied apparel brand Brooks Brothers files for bankruptcy as it seeks a buyer and closes dozens of stores

Muji files for bankruptcy

GNC files for bankruptcy and will close up to 1,200 stores

24 Hour Fitness files for bankruptcy, closes more than 100 gyms

It’s only going to get worse from here on out.

Smart investors are already taking steps to profit from the next major downturn in the markets.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We made 100 copies available to the public.

As I write this, there are just 9 left.

To pick up your copy of this report, FREE, swing by:

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted by Phoenix Capital Research