A hundred years of defaults

Long-term metric history

Let’s take a look at the historical annual default rate over the last hundred years:

The first thing that stands out is how insanely bad the Great Depression was. It completely dwarfs anything else.

After the Great Depression, things were calm for a long time but then from 1980 onwards there were more defaults on average and some notable peaks of bad times.

One thing to keep in mind though, while defaults are bad, you don’t get return without risk. Companies may have blown up over the last forty years but the stock market and amount of wealth creation has been explosive.

At least, as long as so many things aren’t blowing up that the entire system is threatened as it was in 2008 and as it actually happened during the Great Depression!