Almost 20% of the Stock Market Is Zombified
Nov. 21, 2020 (EIRNS) - According to a Bloomberg survey of 3,000 of the largest publicly traded companies, almost 200 corporations have joined the army of zombie firms, i.e., those that are unable to pay debt service interest even at the current minimal or negative rates. “From Boeing Co., Carnival Corp. and Delta Air Lines Inc. to ExxonMobil Corp. and Macy’s Inc., many of the nation’s most iconic companies aren’t earning enough to cover their interest expenses (a key criterion, as most market experts define it, for zombie status)”, Bloomberg says.
Since the beginning of the pandemic, their debt has increased by $1 trillion, “bringing total obligations to $1.36 trillion. That’s more than double the roughly $500 billion zombie companies owed at the peak of the financial crisis,” Bloomberg remarks.