Skip to content
Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

CORPORATE CREDIT DOWNGRADES RISE

The number of corporations seeing their credit rating fall last year was 4.67 times more than those with rising ratings, according to ratings service DBRS Morningstar.
The pace of downgrades surpassed 2008’s 3.08 ratio and approached the 5.39 mark set in 2009 at the worst of the Great Recession.
Morningstar recorded 70 downgrades in 2020, compared to 45 in 2016 when the number spiked as the method of calculating downgrades for European financial institutions was changed.
There were 74 downgrades in 2008 and 97 in 2009, DBRS said.
About 40 percent of oil companies monitored by DBRS were degraded last year. The automotive and retail sectors saw 30 percent of companies’ creditworthiness knocked down.
Automotive, consumer services, energy, real estate, and retail could continue to be vulnerable to downgrades amid aftershocks of the global economic collapse, DBRS’s report cautioned.
TREND FORECAST: With oil prices sharply rising there will be some respite in that sector, however, the serious economic damage of year-long low prices will not resuscitate the deep in debt.
Also true with retail and real estate, both of which have been propped up with government payout to the public and zero interest rate policy respectively. 
We agree with the statement of Morningstar director Anil Passi who told the Wall Street Journal. “We’re living in an artificial world propped up by money printing. There’s going to come a day when everyone has to stand on their own two feet.”
The day of reckoning will come when equity markets crash. (See Gregory Mannarino’s new article, “MARKETS’ DAY OF RECKONING: COMING SOON.”