Re:America’s ‘Retail Apocalypse’ Is Really Just Beginning
by emodendroket on Wednesday November 08, 2017 @03:42PM
(#15656780)
It calls out some of this debt being from 2007, and some cursory checking on my part suggests things were picking up again to a notable degree more recently. http://www.reuters.com/article/us-uslbo/cheap-financing-fuel...
Anyway, at best it contributes to a negative feedback loop.
Re:America’s ‘Retail Apocalypse’ Is Really Just Beginning
by pixl97 on Wednesday November 08, 2017 @05:05PM
(#15657580)
>thought to be sustainable debt loads a few years ago.
No, the debt was never sustainable. Essentially the banks allowed loans which were gigantic ponzi schemes.
Retail: "Our growth will continue forever!"
Banks: Hmm, we got bit pretty hard on these home loans and need somewhere else to make money, "Forever growth is like infinite money, I like money!", "Here is 10 billion dollars, just remember to pay us back in 2017".
In other words, they're saying the businesses aren't profitable enough to service debt loads that were thought to be sustainable debt loads a few years ago.
That still points to lower than expected retail profit. Interest rates have been unusually low for more than a decade, so it's not like a credit spike changed the assumptions.