More from the front

A buddy who is a corporate attorney in NYC writes:

We’ve been watching a slow motion train wreck for over a year now. What makes this so nerve-wracking is that, with the loss of trust and
confidence in the financial world and the massive deleveraging underway, there is no way to predict with confidence how bad this will get. Things which were inconceivable two years ago (15-20% unemployment for example, cannot be dismissed out of hand any more). In my small part of the world, I’m seeing a large number of portfolio companies of private equity firms in covenant default, companies that need to file for bankruptcy unable to do so because they can’t get a DIP lender and enormous redemptions from hedge funds. My business has slowed significantly and my firm is going to have to face some very difficult decisions about whether to abandon certain business lines (and fire a bunch of lawyers) in the near future.