Corporate bankruptcy surge signals trouble for the U.S. economy

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U.S. corporate bankruptcies have risen to levels not seen since 2010. Sucharita Kodali, Retail Industry Analyst, Forrester, joined TheStreet to discuss why we’re seeing an uptick in bankruptcies and what this reveals about the economy.

Full Video Transcript Below:

SUCHARITA KODALI: Any time you see bankruptcy numbers going up. What we essentially are seeing the impact of is that you have companies with cash crunches, and that is often tied to debt payments and interest rate debt payments coming due and interest rates being too high so that you can’t easily refinance. You any debt that you have. So I think that what we’re seeing is really tough times coming for companies that are heavily indebted. And that is not a good position to be. I think anyone who is highly leveraged right now is going to have a hard time. Being it will certainly have a hard time. Staying alive through in the foreseeable future, as long as interest rates are higher than what we’ve had in that 0 interest rate environment that I think a lot of investors were too comfortable with too long.