
S&P warns 1 in 10 US firms may default on debt - finphil
https://techxplore.com/news/2020-03-sp-firms-default-debt.html
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ASalazarMX
They didn't save for the hard times? It was their own choices that caused them
to default. They should just pull themselves up by their bootstraps.

~~~
lmilcin
Of course, companies should save to face possible hard circumstances. In ideal
world.

In real world, conservative company that save large portion of their income
will loose competition with a company that does not have this kind of infinite
game thinking.

The events that really test and reward companies with infinite thinking are
rare and far between, allowing those without that kind of constraint to
flourish inbetween.

Now, it depends what is thought to be public good. It might be in public (US)
good to give aid to those companies to keep being competitive against foreign
powers. Even though you may not like the fact and you may think it is not fair
to reward short term thinking it might still be in your good interest to pony
up.

I don't have knowledge and mental model to decide whether this is in fact good
or not. Somebody should probably do some kind of estimation of possible
effects to figure out what is the right course here.

~~~
ASalazarMX
For the record, I'm not hating companies that live day to day, the race to the
bottom forces them to. I'm mocking the idea that if you struggle financially,
it's always your fault and you should have known better. There are always
factors out of our control, company or individual, even if bigger entities
have more factors under their control.

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SQueeeeeL
It's kind of amazing that 10% of our economy is basically living on the knifes
edge of revenue and liability like this. It might just be a bad mentality, I
know in Japan, they have a tradition of corporations building up a massive
treasury, but the US is basically the exact opposite

~~~
pwaivers
I don't think 12 months without revenue is "living on knifes edge"

~~~
weare138
That's kind of the problem. We don't view companies that go 12 months without
revenue as high risk and/or failed investments anymore. How long can companies
like Uber continue to raise capital to operate when they're only generating a
fraction of the revenue now and investors won't accept the long term risk?

~~~
o-__-o
As long as money is cheap, the rich (VCs, Angels) will throw cash at you to
satisfy their tax liability. A unicorn going public is just a side benefit.

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BenoitP
The source article:

[https://www.spglobal.com/ratings/en/research/articles/200204...](https://www.spglobal.com/ratings/en/research/articles/200204-coronavirus-
impact-key-takeaways-from-our-articles-11337257)

From their earlier article:

[https://www.spglobal.com/ratings/en/research/articles/200317...](https://www.spglobal.com/ratings/en/research/articles/200317-economic-
research-covid-19-macroeconomic-update-the-global-recession-is-here-and-
now-11392265)

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rasz
Did they swap numbers by accident? I expect 9 out of 10 to default.

