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Saving For a Space Ship

The Financial System's Weak Link: Zombie Firms (Now at 10%)

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The Financial System's Weak Link: Zombie Firms



In its latest Quarterly Review, the Bank for International Settlements has some telling charts on the state of the Western corporate world. Leverage conditions in the U.S. are the highest since the start of the millennium. As the chart below shows, the share of "zombie companies" -- firms whose interest bill exceeds earnings before interest and taxes -- in the euro zone and the U.K. has continued to rise since the crisis, and now stands at over 10 percent.



Edited by Saving For a Space Ship

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1 hour ago, ThePrufeshanul said:

Thanks for the post!

is there any way to get a list of these firms?

Considering that this is public knowledge, viewable through the accounts, there was no reason for them not to share a few of the juicier names. 

Perhaps the BIS report has them. 

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This is an inevitable consequence of current policy and will only get worse if the policy doesn't change.  And they claim poor productivity is a mystery.

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Meet my brother-in-law:

MD of a small firm, no pension, huge IO mortgage, “the company is my pension” mentality,  the company is in property services, extravagant life style and extravagant wife.

Zombie household living off a zombie company.

My wife is quite competitive and they like to compete for attention as to who is the most successful with their parents. My wife does quite well, she is in a senior education role on about £100k. My brother in law claims he earns various amounts between £200k and £300k.

I just laugh inside, as I know he hasn’t paid a penny off his £800k self declared  IO mortgage in 13 years. It is actually very pathetic.

I just quietly pay off our mortgage, and shove £2k pm into my pension.





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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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