128 days ago • Posted by Charles-Henry Monchau
What is the definition of "moral hazard"? Just check out the % of U.S firms which qualify as "zombies"
“‘Zombies’ are firms whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing. Such is a macroeconomic problem. Zombie firms are less productive, and their existence lowers investment in, and employment at, more productive firms. In short, a side effect of central banks keeping rates low for a long time is it keeps unproductive firms alive. Ultimately, that lowers the long-run growth rate of the economy.” – Axios (Source: www.zerohedge.com)