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But most of the debt has been around for years at this point. What in the next 9 months changes that?
by devalgo 6y ago
But most of the debt has been around for years at this point. What in the next 9 months changes that?
- david927 6y agoDebt is fine if payments can be made. What's coming is an inability to make payments. Further, credit is tightening, so that, say, companies that have been using credit to stay alive (zombie companies) won't be able to anymore. Up until around 2003, zombie companies were no more than 2 or 3% of total companies, as you would expect. This grew to 5-6% in the 2008 crisis. But that crisis wasn't allowed to resolve naturally, so it's been continuing to grow, and now it's almost at 20% -- of all companies.* https://www.axios.com/zombie-companies-us-e2c8be18-6786-484e-8fbe-4b56cf3800ac.html https://www.axios.com/zombie-companies-us-e2c8be18-6786-484e... The economic contraction that we're just starting is going to set off a wave of defaults, and those defaults will beget more defaults.