Collapsing US Companies Could Be a Sign of Catastrophe to Come: Pomboy

• Stephanie Pomboy has warned of the economic risks signaled by rising corporate bankruptcies in the US.
• First-half US corporate bankruptcies surged to the highest level since 2010, per S&P data.
• Those who understood the scale of the problem “would be calling for a fiscal & monetary response that makes 2008-9 look like peanuts,” Pomboy wrote in a post on X. 

The surge in US corporate bankruptcies likely embodies a greater economic risk that many in the market have accounted for, and could be presaging an event that dwarfs the 2008-2009 financial crisis, Stephanie Pomboy has suggested.

While some economic commentators have been talking about collapsing American companies, they still fail to see the magnitude of the problem, the Macro Mavens founder wrote in a post on X.

More US companies collapsed during the six months through June than any other half-year period since 2010 as historically high interest rates heaped pressure on American businesses, according to data published by S&P Global Market Intelligence. First-half bankruptcies outstripped even the same period of 2020 – when the pandemic wreaked havoc on the economy.

“It’s really something, listening to johnny-come-latelys parroting my talking points on corporate bankruptcies (which none of them saw coming 6 mo’s ago). But they still fail to connect the dots. If they did, they’d be calling for a fiscal & monetary response that makes 2008-9 look like peanuts,” Pomboy wrote.

Silicon Valley Bank, Bed Bath & Beyond, Lordstown Motors and Mediamath Holdings are some of the well-known names that have gone under in the last few months. 

This is not the first time Pomboy has raised concerns of looming economic and market risks in 2023.

Last month, she warned that investors, while growing optimistic about the Federal Reserve eventually cutting interest rates, are still downplaying the fallout from the central bank’s aggressive policy tightening since early 2022.

“The markets don’t seem to be anticipating the pain before the pivot — they’re just anticipating the pivot,” she said in a recent Wealthion interview. 

“The impact on the economy, and then the corporate and household credit situation, will be so severe that they’ll take rates down dramatically,” she added.