Zombie Alert!

October 19, 2023

by Brian Maher Daily Reckoning

Today we run a warning flag up our flagpole…

For we have detected “zombies.” Zombies?

Mr. Robert Burrows of BondVigilantes.com:

 Zombie firms are essentially companies that exist on borrowed time.

They struggle to generate enough profits to cover their debt obligations, yet manage to stay afloat thanks to lenient borrowing conditions. The prolonged period of ultra-low interest rates following the 2008 financial crisis played a significant role in sustaining these firms, allowing them to refinance their debts at favorable terms.

As a result, many of these entities have been able to continue operating, albeit with weakened balance sheets and limited growth prospects.