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Zombie company debt swells to $1.4 trillion

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Bloomberg/Lisa Lee and Tom Contiliano/11-17-2020

“From Boeing Co., Carnival Corp. and Delta Air Lines Inc. to Exxon Mobil 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).”

USAGOLD note:  Bankrupt companies held aloft by banks that cannot afford to take the hit recognition would deliver to their balance sheets (all supported by Fed quantitative easing policies) …… “They’re a drag on the economy,” reports Bloomberg, “because they keep assets tied up in companies that can’t afford to invest and build their businesses.”

bar chart showing growth in corporate debt year over year as of 11-2020Sources:  St. Louis Federal Reserve [FRED], Board of Governors Federal Reserve System
Click to enlarge

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