Why So Many US Companies Are Going Bankrupt

From Bed Bath & Beyond to Pyrex to WeWork, some of America’s best known brands are declaring bankruptcy. After years of cheap borrowing, the Federal Reserve’s push to curb inflation has also pushed up interest rates—and made the price of debt more expensive. So what does it mean for the economy and which industries are most at risk?

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[Rochelletrem]

Sadly, banks continue to stumble, mortgage rates is on the rise with higher imports and lower exports, yet the FED is to lessen cost. So, where do we grow and safeguard our money now? something will eventually break if they keep raising interests and quantitative tightening.

[johnben]

Bankruptcy is a legal process that individuals or businesses can undergo when they are unable to repay their debts. It provides a framework for financial relief and a fresh start. There are different types of bankruptcy, such as Chapter 7 and Chapter 13 in the United States, each with its own rules and implications. Bankruptcy can have long-term effects on one's credit and financial standing, so it's essential to carefully consider the decision and seek professional advice when facing overwhelming debt.

[loangxuong]

That's what happens when you build an entire economy on debt

[Casey-summer]

A Bank crash/crash in the stock or real estate markets has less of an immediate impact on people's standard of living than inflation or currency devaluation. That the market is so negative at the moment shouldn't be shocking. If we are to survive in this economy, we need assistance right away. The ETF and stock markets are still quite volatile, just like the property market. Now all that's left of my $370K portfolio is ruins.

[badminverse]

Let me save you 6 minutes, it is the high interest rates that kills those companies

[lewispalmer]

And CEO’s will make more money than ever. Their are parts of this story that needs to be told.

[tishofikini]

We in Africa used to admire how Americans do soo much shopping everyday and wondered how americans are soo with movies showing the prosperity in America, everyone wanted to go to America....little did we understand its all on credit.
Looks like the time to pay is here with them.

[nicolasbenson]

We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680, 000 savings vanish after putting in so much effort to accumulate them.

[kevinjohnstone]

This used to be one of my most watched channels... sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the toughest phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.

[aelfredrex]

That's why I like the company I work for. The owner does not like being in debt. He's not letting the accountants ruin his machine.

[johnsamuel]

The private equity transfering debt to hospitals might lead to higher medical costs for patients

[Ashleycorrie]

It's been a rough year with losses from failed banks and government, real estate crashes, a struggling economy, and downturns in stocks and dividends. It feels like everything has been going wrong.
What a terrible year it is…

[DanH-uf]

More consumers are shopping online. You will also see companies fail because they take a political stand and its customers cancelling them.

[baarbacoa]

Bad management burning cash. Low interest rates just gave them more time to squander the money, and more money to squander

[mike]

There was a lot of PPE fraud, many owners took huge 'forgivable' loans, paid out massive bonuses knowing they would never be paid back.

[RaviGoel]

Over expansion beyond sustainable demand

Over buying stocks that they can’t sell beyond 60%, 40% goods sold for losses

Under selling with increasing now of DTC brands giving competition at much lower costs

Over valued beyond income multiples

Over paid cxos and employees

Price multiple has risen from 2.5x of cost to now 7x, means garbage being sold at high prices, doesn’t work in long run

[Neckername]

To answer the title question. These business were built on models that rely on cheap money, and a weak labor force. The labor force has given up on working until they get something that can actually make sense and pay bills with the time they are expected to allot to work. Since a lot of places don't want you to "cheat" on them with other employers, they basically left no other possible result left on the table. "They" being the collective interests of corporate america who have been taking profit regardless of how it happens. This isn't a magical system, it is an economy, it can output great things into the world, with proper management and reliable inflows of the correct resources.

Basically, the kids have been outside breaking the rules and having all the fun, but daddy is home, and the nonsense and bs stops at the bootheel. It's worse than 2008, we dodged part one of this whole inflation issue thanks to covid. But we also catalyzed the second part. We WILL see on of the largest economic depressions in history by the end of the decade. Everything is repeating from last century in a modern way, and right on schedule

[dennisatkins]

THE BIGGER THE BOOM, THE HARDER THE FALL

[donaldspaulding]

And yet CEO's salaries always go up! It's as if greed is consuming all sectors of our economy.

[gregorysagegreene]

If you didn't want to get hit by high interest rates, then you shouldn't have dug into the debt trough. Thought all these companies had 'economists' anyway?