قالب وردپرس درنا توس
Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ 13% of the world's companies are "zombies". This is not healthy

13% of the world's companies are "zombies". This is not healthy



These indebted companies do not do enough to cover even their interest payments. This is never a good sign.

The number of zombies in advanced economies last year amounted to 536, or 13% of the total, according to Bank of America Merrill Lynch.

This is a surprising figure, given that the global economy In fact, the number of zombies is not far from the peak of 626, observed in the depths of the Great Recession, said BofA.

"Last time, it was easy to be a zombie because everyone's profits collapsed," said Michael Hartnett, chief investment strategist at BofA

So what apology is this time? "Economists blame the era of extremely low interest rates

The Federal Reserve holds interest rates near zero for almost a decade and pumped its balance to 4.5 tons Leona dollars.

"The central banks have pushed interest rates to zero. No one can go bankrupt, "Hartnett said.

  Fed's choice of Trump's Stephen Moore owes $ 75,000 to the IRS
The Fed has steadily raised its interest rates in 2015, he announced plans to halt interest rate hikes due to slowing economic growth. Meanwhile, central bankers in Europe and Japan have not yet raised interest rates from the negative territory

Bad use of resources

[19659002] Money lending, especially at affordable prices, is not a bad thing at all. Adding debt allows companies to invest in the future by building new factories, purchasing equipment, hiring workers, and studying next-generation products. money helped inspire life on the world stock markets, inspiring confidence on the way

But the zombie companies are wasteful.

"You keep companies on the surface that should not be in business," Hartnett said. "These businesses use resources – such as capital or labor – that could be used more efficiently elsewhere."

In order to stay alive, zombie companies demand ever larger amounts of capital. They should often take advantage of the capital markets for more than it.

"Zombie firms are less productive and push investment and employment into more productive businesses," Ryan Nyandriy Banerji and Boris Hoffman write. Bank for International Settlements, which is owned by 60 global central banks

This is not just a post-crisis problem.

The BMI document found that the presence of zombies has been "enhanced" since the late 1980s, a period of persistently low interest rates. While only 2% of the companies in advanced economies were zombies in the late 1980s, the authors argue that the figure has risen to 12% in 2016. And instead of recovering or getting out of the zombies by bankruptcy, companies are today tend to stay longer. The phenomenon is not healthy because it sucks the rest of the resource economy. But this can not become a problem until interest rates remain low.

Catches would be if the historically low unemployment rate in the US and the shortage of skilled workers have made wages grow rapidly. This will force the Fed to resume aggressive interest rates.

"If inflation starts surprise, then these zombie companies suddenly have a much bigger problem," Hartnet from BofA said.

2. Job Report: The US employment report for March comes on Friday and will give a better idea of ​​how much wages are increasing. huge jobs have been rising in the months before. Economists will monitor whether this is a one-time case or part of a wider trend.

There is some concern that the February figures are a sign that the economy is depleting the available workers after 101 consecutive months of job growth. 3. Debate on Brexit: Britain's lawmakers rejected for the third time talks with Brexit of Prime Minister Teresa May for the third time in the political and economic uncertainty of the country.

Rejection increases the chances of a longer delay on Brexit or the collapse of the United Kingdom from a Europe without a deal on April 12. Parliament will hold a second vote on the deal's alternatives on Monday

4, After the Second Quarter: After the terrible end of 2018, the shares have become one of their best first quarters. S & P 500 appreciated 13 % its best quarter since 2009. it is historically presumed that bulls can remain at the forefront of the rest of the year, "said Ryan Detrick, senior market strategist at LPL Financial. "In fact, 9 of the last 10 times the S & P 500 has risen by at least 10% in the first quarter and the rest of the year is also green."

5. This Week: – Retail Sales in February in the United States; Production of US ISM

Tuesday Walgreens ( WBA ) Revenue; United States US goods orders for February

Wednesday – US ISM Services

Thursday Marks Revenue; Reserve Bank of India

Friday – Report on US jobs in March; EU Finance Ministers Meet


Source link