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Rise of the Zombie Companies

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  • Rise of the Zombie Companies

    http://www.moneyweek.com/news-and-ch...-economy-61500

    I have posted the above link but would have preferred to show a Financial Times article on 19th Nov which was far better and more thought provoking. Unfortunately copyright seems to prevent me.

    In brief the FT pointed out that 10% of British Companies (a massive 25% in hotels and catering) were only able to pay the interest on their debt and were being kept artificially alive by the ultra low interest rates.

    This could explain why employment has been strong (and increasing) whilst the GDP figures are flat to declining.

    The consequence of this policy is that zombies are absorbing the capital that bright new companies need for start-up and expansion whilst the zombie is too weak to invest or innovate and sits around slowly losing customers.

    I contrast this with Margaret Thatcher's recession which was short, brutal and very successful.

  • #2
    Apparently the FT does not allow linking unless you are a registered user.
    Any metaphor will tear if stretched over too much reality.

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