The Fed is pumping liquidity into financial markets and, beyond buying Treasury bonds and mortgages as it did in its post-GFC quantitative easing programs, will also backstop lending to companies, including small business and consumers, and may even buy securities in mutual funds and exchange-traded funds.The problem for the zombies is that they were alive before the pandemic only because rates were so low and credit was so plentiful and undiscriminating.
In systems, like ours, where the banks will actually have to evaluate whether businesses have the capacity to re-emerge from near-total shutdowns of up to six months, if not longer, some tough decisions will have to be made.Sectors which were hanging on in the face of enormous and disruptive structural change ahead of the pandemic – retail is the most obvious – are going to look very different and be much smaller when this crisis ends.
Non-financial corporate debt has more than doubled since 2008 to about $US13.5 trillion , while leveraged loans have climbed to more than $US1 trillion.
StephenBartho How about all those zombie governments who enjoyed playing monopoly with all these zombie companies?
Korean zombies will survive, they have style .... Time to see Train to Busan & Rampant again
Exactly, this is the perfect time to get all unprofitable businesses receiving Govt assistance through the tax system. Great business can flourish by utilising extra capital into the business and expand, taking on the workforce leaving other non profitable businesses
Hopefully.
Obviously but where is the list of zombies for us?
Nice photo of Switzer
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