Chemical peel

Wall Street is starting to feel the sting of bankruptcies. Until now, most bank writedowns were the result of marking loans, most of them still-functioning, to market prices rather than borrowers going belly-up. Goldman Sach’s revelation of $850m of losses on Lyondell Chemical loans suggests the next wave of financial difficulty – actual corporate defaults - is rolling in. Global default rates on bonds of highly leveraged corporations stood at only around 4% at the end of 2008, still hovering be...