You wouldn't know it from the speeches given at the Republican National Convention on Tuesday night, but there are some Americans who have bigger problems to worry about than the nature of John McCain's patriotism.
Credit Slips' Bob Lawless has the latest numbers on bankruptcy filings.
The U.S. bankruptcy filing rate climbed again in August, reaching a new post-2005 high of 4,476 filings per day. The year 2005 is significant because it was the year that the bankruptcy law changed making it more expensive and more time-consuming to file bankruptcy as well as making bankruptcy less effective once debtors got to bankruptcy court. Despite these changes, the bankruptcy rate has become staggeringly high, and we appear to have returned to an era where we will have well more than 1 million annual bankruptcy filings.
As Lawless notes, it takes some time for a financially stressed American to reach the point of actually filing for bankruptcy, so the numbers we're looking at now represent forces in the economy that have been in motion for years.
Which makes a nice segue into current affairs. On Wednesday, both the Wall Street Journal and the Financial Times reported the collapse of the hedge fund Ospraie Management, described by the Journal as "one of the biggest players in commodities."
From a somber letter sent to investors by Ospraie founder Dwight Anderson:
This year has been very difficult for the Ospraie Fund Ltd. The Fund returned –26.72 percent in August and is down 38.59 percent year-to-date. I am extremely disappointed with this result and the Fund's sudden reversal in performance.
The losses were primarily caused by a substantial sell-off in a number of our energy, mining and resource equity holdings during a six-week period characterized by some of the sharpest declines in these sectors in the past ten to twenty years.
What goes up, comes down -- a mundane observation given a bit of new sparkle by yet another headline this morning "Oil Price of $100 a Barrel on Horizon." (Haven't we already seen that headline, from the other direction?)
Bad bets on oil and gas burned Ospraie, and we can expect more news along the same lines in the future, if the global commmodity bust continues.
Somehow, one suspects neither Anderson or his investors will be filing for bankruptcy any time soon. But what will it take for either Wall Street or the working man to get a mention in Minneapolis?