Andrew Milgram

That feels like the world we're heading into.

There are other scenarios you could imagine that are more punctuated.

Let me go back to what I said earlier about debt service coverage.

So interest coverage is a funny problem because, again, you've got to make that coupon payment.

If you're unable to make the coupon, you have a couple of options.

You can go to your lender and try and work something out, or your ultimate resource is you can go petition the courts for protection.

In the 2023 data, we saw that almost 25% of the companies in the data set couldn't make their debt service coverage.

So surprise, surprise, in 2024, business bankruptcies hit like a 14-year high.

Fast forward, the 24 data that we're living with now in 25 showed that another 20% of the data set couldn't make their debt service coverage.

So based on the data we see to date and the bankruptcies that we've already seen in 2025, we would expect 2025 to show persistent and possibly higher number of business bankruptcy filings.

We're also, interestingly, starting to see some larger companies suffer that as well.

So goes back to as much as the infomercial that is CNBC wants to convince you that everything's great in the economy, it's just clearly not.

How do we resolve it?

I think there is broad-based weakness in this economy.

We can spur growth, get everybody buying.

There are some macro things you could do.

You could pump more liquidity into the economy.

Of course, you risk an inflationary spiral, which we're probably on the cusp of again.

You can do some sort of wholesale debt restructuring and try to get through it quickly.

That would be recasting a resolution trust company type idea.