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Bankruptcy Crisis Has Arrived
-- July 3, 2002
For months, we've been warning subscribers that hundreds of public companies are sleepwalking towards bankruptcy. We said US investors are witnessing the beginning of the most catastrophic wave of bankruptcies in more than 70 years. Now, according to BankruptcyData.com, 2002 is shaping up to be another record year for business bankruptcies -- 113 companies with $149 billion in assets have already filed for bankruptcy this year.
Our research shows that among the 50 brokerage firms covering companies that have gone bankrupt this year, 47 firms continued to recommend that investors buy or hold shares in the failing companies even as they were filing for Chapter 11 in the first four months of 2002.
All of this only adds to the crisis of confidence on Wall Street. Investors are already shaken by the plunging stock markets, investor swindles at the big brokerage firms, and new revelations of accounting irregularities. But this is only the beginning. It will take months for all the scandals to be exposed and for all the weak companies to throw in the towel.
That's why we continue
to urge you to get your money to safety and to use any market rallies as selling
related article: Bankruptcies Continue Surge Even as Economy Improves