Bankruptcy filing surge

Bankruptcy filings surge to 1 million - up 29% (August 27 – CNN.com )

 

NEW YORK (CNNMoney.com) -- As things in the economy have gotten worse, the number of people and businesses heading to bankruptcy court has spiked.

Bankruptcy filings surged 29% in the 12 months that ended June 30, according to government figures released Wednesday.

Total filings rose to 967,831 from 751,056 a year earlier. Business filings jumped more than 41% to 33,822 from 23,889 in the year-ago period. Personal filings totaled 934,009, up 28% from last year.



I know this is a few days old, but it just caught my eye, and I wanted to contrast this with the recent miracle 3.3% GDP number. One thing that is NOT consistent with an expanding economy is a big surge in bankruptcy filings.

Note, too, that both business (up 41%) and personal (up 28%) bankruptcy filings were up strongly. So this
just can’t be due to the housing crisis alone.

If we list all of the things that are NOT consistent with 3.3% GDP growth, we quickly arrive at a very long list:

  • Reduced gasoline consumption
  • Reduced trucking tonnage
  • Increased unemployment claims
  • Surging bankruptcy flings
  • Lower consumer spending
  • Increased savings
  • Foreclosures
  • Consumer confidence numbers in the dump
  • Fed surveys solidly in negative territory
  • PMI and other indexes below 50 (meaning recessionary)
  • Leading indicators (ECRI) solidly in recession territory


These are all signs of recession, not expansion. The only things that are mysteriously fixed on the sunny side are the government's GDP readings and the stock market remaining in oddly high territory, especially given the rich valuations that still exist in there (see next).

This is a companion discussion topic for the original entry at https://peakprosperity.com/bankruptcy-filing-surge-2/