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alstry (35.61)

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August 13, 2008 – Comments (0)

Any financial institution that is leveraged 10 to 1 and has 20% of its debt go South...........all of the depositors funds are gone(save insurance).

Some Wall Street firms are leveraged 30 to 1 or 40 to 1 and more. 

Debt is defaulting at a faster and faster rate!!!!!!!!!!!!

Now there are a few restaurant chains employing over 40,000 people having trouble meeting their debt obligations. 

The parent of Uno Chicago Grill, a chain of 200-plus pizzeria-themed restaurants, will skip a bond payment on Friday as it tries to negotiate more financial breathing room amid increasingly difficult times for sit-down eateries, according to two people familiar with the matter.

Now based in Boston, Uno employs more than 5,500 people at company-owned sites and thousands more at its franchised restaurants. It was acquired in a leveraged-buyout in January 2005 by the private-equity fund Centre Partners and members of management.

Other chains, such as Chevys Fresh Mex and the home-style Perkins and Marie Callender's chains are also in talks with their lenders, say several people familiar with the companies. These chains, which combined have about 1,000 sites across the country and 40,000 employees, also face difficulties. All have had earnings slow as diners cut back on eating outside their homes. At the same time, the companies are managing heavy debt loads placed on them by private-equity funds. They have many older sites and older brands, but limited funds to update menus or buildings.

http://globaleconomicanalysis.blogspot.com/2008/08/uno-pizza-chain-misses-bond-payment.html

The problem now is that a lot of insurance companies invest in debt.  As debt continues to default, so do the financial conditions of our banks, insurance companies, pension plans and mutual funds.

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