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Global economy faces $19tn corporate debt timebomb, warns IMF

International financial system faces $19tn company debt timebomb, warns IMF

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4 comments

  1. This is the best tl;dr I could make, [original](https://www.theguardian.com/business/2019/oct/16/global-economy-faces-19tn-corporate-debt-timebomb-warns-imf) reduced by 78%. (I’m a bot)
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    > Low interest rates are encouraging companies to take on a level of debt that risks becoming a $19tn timebomb in the event of another global recession, the International Monetary Fund has said.

    > In its half-yearly update on the state of the world's financial markets, the IMF said that almost 40% of the corporate debt in eight leading countries – the US, China, Japan, Germany, Britain, France, Italy and Spain – would be impossible to service if there was a downturn half as serious as that of a decade ago.

    > "We look at the potential impact of a material economic slowdown – one that is half as severe as the global financial crisis of 2007-08. Our conclusion is sobering: debt owed by firms unable to cover interest expenses with earnings, which we call corporate debt at risk, could rise to $19tn. That is almost 40% of total corporate debt in the economies we studied.”

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    [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/diqixp/global_economy_faces_19tn_corporate_debt_timebomb/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ “Version 2.02, ~435199 tl;drs so far.”) | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr “PM’s and comments are monitored, constructive feedback is welcome.”) | *Top* *keywords*: **financial**^#1 **debt**^#2 **market**^#3 **economy**^#4 **risk**^#5

  2. Trump has said about his policies (including reducing the interest rate) that he doesn’t care about any damaging effects they have on the U.S.A. or the world as he’ll be gone before he can be blamed for them.

  3. These types of crises are endemic to Capital-dominated economies. Its nothing new.

  4. Imagine that, all the short sighted hedge fund and activists get on the boards, make the corporations gut themselves of assets and load up on cheap debt, to buy back stocks and inflate the price. Sooner or later, people look at fundamentals and the market sinks 50% and those stocks they bought back at x with debt now worth x/2. Of course they knew what they were doing was shorted sighted and not of lasting benefit to the company so they shorted everything in sight and giggle as pension funds evaporate.

    But I guess when you pour trillions onto the banks, every grifter starts fighting their “share.”

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