A zombie firm is one that cannot even cover its band or bond interest from free cashflows. The chart below is of firms from the Russell 3000 Index, aan Index comprising 97% of US listed companies and it shows that 25% of them are now zombies. The last time that number was anywhere close was in 2001 at 17% and look how that played out. But in 2001 interest rates were being cut, now they are increasing just as a consumer slowdown means that free cashflows will be decreasing so that Zombie percentage is going to head sharply higher this Autumn.
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