The New F Words

Forbearance and Force Majeure are two words that will suddenly become synonymous with the economic fallout from the Coronavirus. As we wrote earlier, this period is difficult to characterize given the sudden nature of the decline in cash flow across almost the entire economic landscape. Its as if the lights went out and everyone literally is fumbling around in the dark trying to find their way. Lifelines from Governments are always clunky, unwieldy and slow to implement, so don’t look to this most recent bailout to stem what is going to be a virtual tsunami of workouts coming down the pipe. As we have said repeatedly over the last few years, credit fueled markets, constantly backstopped by Global Central Banks were rendered more and more unstable. That instability is unfortunately coming to the forefront, and the recent trillions of misplaced Government dollars won’t be enough to stop it.