With its debts mounting, the health-care industry looks a lot like the oil industry a few years ago. From Wolf Richter at wolfstreet.com:
Debt binge hits its limit, with big impact on overall economy.
Sector booms and busts have historically been driven by speculation and over-borrowing, often triggering regional or even national recessions. Textbook examples include the 2014 Energy and 2008 Financial sector collapse. In both of these instances, fallacies such as perpetual $100+ oil and ever rising home prices drove rampant speculation, overinvestment, and unsustainable debt buildup.
So warns John Burns Real Estate Consulting, in a new paper, “Industries at Risk and Implications for Housing.”
This time, three sectors stand out where “a similar pattern of unsustainable growth has driven rapid expansion” since the end of the Great Recession: technology, automotive (whose current travails I keep dissecting), and health care.
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