| Hello Reader, “We are in the thick of it. We are getting battered by the vagaries of these markets. ... If we were in one of those concrete trucks where the back end is swirling, it couldn’t be much worse than the manner in which we are being knocked around presently.” This is what my good friend Mark Grant, chief global strategist at B. Riley FBR Inc., said in his latest report that I shared with Over My Shoulder subscribers. Mark is a veritable macro genius, which is why he was recently named a “Bloomberg Prophet”—one of only 15 globally. In his report, Mark notes that US corporations are filing for bankruptcy at a record pace, soon to surpass Great Recession levels: For companies with liabilities over $50 million, 157 have filed for bankruptcy already this year, and I predict more will follow, perhaps significantly more. My good friend Charles Tatelbaum, a director at the law firm of Tripp Scott, has indicated to me that reorganizations are just getting underway. He tells me that many corporations are hanging on for dear life and that the surge in reorganizations has only just begun. His outlook on pension funds is just as dire: The shortfall in pension funding is now at 10 percent of GDP in nine states and more than 6 percent of GDP in 24 states. The largest share of unfunded liabilities is in New York, California, Illinois, New Jersey, Texas, and Pennsylvania. The total amount of damage here is $693 billion. Besides the pension funds of the states, I would also be looking at your exposure to the pension funds of the municipalities in these states. It is almost impossible to raise taxes now to meet these obligations as the pandemic sweeps both people and governments off their feet. I do firmly believe that we will find our way out of this terrible mess. However, I am not saying it will be easy... or fast. What we all have to do at this point is “lean in” and make the best of the situation. Don’t upgrade to that bigger house or the new car. Instead, tighten your belt, invest wisely, and create a thick financial safety cushion. Knowledge is truly our greatest power right now. Mark Grant and the other financial, economic, and (geo)political visionaries who contribute regularly to the wealth of research that is Over My Shoulder have proven to be lifesavers for me and many subscribers. Over My Shoulder doesn’t tell you what exactly to do or how to invest. What it does instead is enable you to make the best-informed choices for your business, family, and finances. And as you well know, even the toughest crisis harbors profit opportunities for astute investors. For just a couple more days, you can subscribe at a 33% discount... for just $9.95 a month. That’s $2.49 a week for better sleep and peace of mind. To me, that’s priceless. Please consider joining us today. But remember: This offer expires on September 6. Your let’s survive and thrive together analyst, John Mauldin
Co-founder, Mauldin Economics | 