By Christopher Hewitt and Jayne Juvan

Those who closely follow economic policy understand that pinpointing exactly where we are in any given economic cycle is challenging even for the most experienced economists. Most recently, U.S. GDP grew at a relatively strong clip of 2.8% in Q3 2024, bolstered by consumer spending. In 2024, The Federal Reserve cut interest rates twice, and the Trump market rally began in earnest the day after the election, posting impressive gains on both the Dow and the Nasdaq. In a potentially deregulated environment created by a Republican administration, happy days may be here again.

But whether these are happy days is no matter for companies that are distressed or on the brink of becoming so. In fact, distress is often created when times are good, not when headwinds are ever-present. Warren Buffett famously quipped, “Only when the tide goes out do you discover who has been swimming naked.” Indeed, difficult times reveal which companies were careless in better times.

Read the article on the Crain’s Cleveland Business website here.