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"We're Going To See A Lot Of Bankruptcies": Former Home Depot CEO Warns
We’re going to see a lot of bankruptcies. Like Bed, Bath, and Beyond. We got Walmart not only laying people off but closing stores. We got Accenture laying people off.
Bob Nardelli, the former CEO of Home Depot, is warning about more bankruptcies hitting the U.S. economy, and blames lawmakers for their delay in coming to terms regarding the country’s debt ceiling.
“I think we’re going to see a lot of bankruptcies. Like Bed, Bath, and Beyond. We got Walmart not only laying people off but closing stores. We got Accenture laying people off. We got Amazon closing distribution centers. So, I think there’s a tremendous-mixed message,” Nardelli said in an April 14 interview with Fox.
At present, the “complexity” of the American economy is “different than anything I have seen in my 52 years.”
The former Home Depot CEO says he is seeing “inventory builds” in a lot of public and private businesses. He pointed to the 2007–09 period when the banking meltdown took “everything down.”
“I think we’re in a very complex environment. And, of course, this debt issue only adds to that. It adds to the certainty of uncertainty, what’s going to happen.”
Surge in Bankruptcy Filings
Bankruptcy filings across the United States rose for the third straight month in March in all major industries. A total of 42,368 new bankruptcies were filed last month, according to data from Epiq Bankruptcy, a provider of U.S. bankruptcy court data, technology, and services.
This is 17 percent up from the 36,068 filings in March 2022 and is the highest number of monthly bankruptcy filings since April 2021.
Data from S&P Global Market Intelligence showed 71 corporate bankruptcy petitions in March, a jump from 58 in the previous month. This is the highest monthly total since July 2020 and the fourth straight month of increases.
First-quarter corporate bankruptcy filings came in at 183, which is “more than any comparable period in the past 12 years,” S&P Global said.
Bank Lending Dips, Layoffs
Meanwhile, lending activity by banks suffered the biggest plunge ever in the two weeks ending March 29. Commercial lending in the country declined by $105 billion during this period—the highest since 1973. The collapse in lending was led by declining real estate loans as well as industrial and commercial loans.
According to financial analyst Andreas Steno Larsen, tough times are ahead for the American economy. “Evidence is gathering that the SVB-fueled banking stress indeed will turn into a recession, but instead of a fast and rapid liquidity-driven recession, we are rather slow-walking into a credit crunch over summer,” he wrote in an April 9 post.
Indication of an incoming credit crunch was seen in the latest Survey of Consumer Expectations (SCE) by the New York Federal Reserve.
“Perceptions of credit access compared to a year ago deteriorated in March, with the share of households reporting it is harder to obtain credit than one year ago rising and reaching a series high,” according to an April 10 press release.