How about this for a waste of money: companies defaulted on $57.9 billion (#68 billion) of debt in the first six months of this year. That's more than in all of 2000, and we're not out of danger yet. If the global economy doesn't stabilise and pull itself out of its downturn, more defaults are a certainty.

Last year's figure of $42.3 billion was a record, too, so these are record-breaking times for debt investors.

Mr Leo Brand, a director in the Risk Solutions division at the credit rating agency Standard & Poor's (S&P), which compiled these preliminary figures, says the rate at which debt defaults are occurring in 2001 is heading for levels last seen in 1991, when more rated debt than ever before was in default.

"Oh well," you might think. "Investors, like politicians, rarely learn from their mistakes."

Given the uncritical reception many investors gave to sub-investment grade borrowers in the international capital markets in the past few years, it is not too surprising that fingers are being burnt on this scale.

According to S&P, 101 companies defaulted between January and June. Of these, 83 were in the US with the rest spread among other Group of Seven members and emerging markets alike.

The telecommunications sector accounted for more than one-fifth of them, which will not surprise many observers. The names are a little too familiar by now: Winstar, PSINet, 360Networks among others.

More tellingly, nine out of every 10 of the defaulters had never been in the investment grade class. This is as it should be: investment-grade borrowers don't go bust overnight, we all hope.

The real problem for investors, though, lies in the poor recovery rates for the telecoms sector in particular.

According to Fitch, another credit rating agency, which estimated first-half default levels somewhat lower than S&P's at $45.5 billion, the recovery rate on defaulted telecoms sector bonds was only five cents in the dollar in the second quarter of this year, down from 11 cents in the first quarter.

Ignoring the telecoms sector's particular travails, however, there are several factors that make this year's default patterns differ from those of 1991.

One is the increasingly global nature of the phenomenon, as seen by the geographic spread of the defaulters, from the US to the Netherlands to Bermuda and Indonesia. A decade ago, the defaulters were largely confined to the US.

A second factor is the broader economic context. In 1991, the world was in a recession induced by the Gulf War.

Many of this year's defaulters, on the other hand, will have lived their lives - certainly in the case of technology companies - almost exclusively in the high winds of a booming stock market and record global demand.

Mr Brand at S&P estimates that the current cycle of default would have begun in 1998, when the Nasdaq stock market boom still had a way to run. He also says that, by and large, the economic context of today's defaulters is much better than it was 10 years ago.

So it wasn't the economy that killed all those telecoms companies; it was just that there were too many of them.

A third factor is the decline in credit quality. In 1991, the typical sub-investment grade company would have been rated BB. Now, the typical rating in this class is B, a drop of three notches. This lowering of the barrier reflects a much wider investor appetite for corporate debt, which has facilitated access to the capital markets for a type of borrower that hardly existed in 1991.

Clearly, these are interesting times for hedge funds and junk bond specialists, for whom these default and recovery levels are meat and drink.

For most investors, however, an economic recovery can't come quickly enough. S&P is banking on an upturn in the fourth quarter and is expecting a slowdown in the rate of growth of defaults and bankruptcies.

Still, the signs are not good.

The US and Europe now have an emerging market crisis on their doorsteps. Argentina's woes are spreading across Latin America, while Turkey is threatening to do the same to its European neighbours.

With both economic blocs in the grip of recessionary fears, there is a strong chance that there will be more defaults. Investors may yet find that they have more money still to waste.