Re:Say Hello to Full Employment
by HillaryBriss on Friday July 06, 2018 @03:50PM
(#17474572)
Some will survive, many won't.
how precarious is it? any thoughts/guesstimates on the percentage that will fail because of higher rates?
The Fed had a good graph on the sky high amount of debts many companies are laying on, but I'm having a hard time finding it right now. A bunch of outlets have written on it, here is the first one I found http://money.cnn.com/2018/02/26/investing/corporate-debt-ris...
As to how many will fail is anyone's guess. Retail has already started to have a reaping (with help from Amazon). If a trade war kicks off price increases for goods from China, that probably won't help a lot of them.
Sub-prime auto market is not doing well either, that should hurt auto manufacturer numbers, but nothing crazy there at the moment.
I think everyone is still trying to guess.
Which options over 2% APY do you know of?
Looks like I was wrong (the >= 2% were CDs) - Marcus.com (Goldman Sachs side bank) is currently offering 1.8% though, so not far off.
Increased fed fund rates and tapering off QE has been having effects. Retail customers generally are unaware of this, so retail banks are still able to not pay any actual interest.
A lot of the weirdness in the market (from Tesla to GE and others) is due to increased returns from 'safe' investments causing easy money for risky ventures to start to dry up. Expect failures as companies built on nearly free money start having to pay up or fold. Some will survive, many won't.