"Zombie Corporations Now Roam
The Real Economy"In his latest Investment Outlook Bill Gross* has a message for market bulls:
"say a little prayer"
he emphasizes that "low interest rates are not the cure, they are part of the problem" .. the Zero Interest Rate Policy (ZIRP) has enabled "a host of zombie and future zombie corporations which now roam the real economy. Schumpeter’s 'creative destruction' –
the heart of capitalist progress has been neutered.
The old remains in place, and new investment is stifled.".. cites warnings from the Bank for International Settlements (BIS) which says the persistently ultra-low interest rates are sapping bank interest margins & causing mispricing in the financial markets, threatening the solvency of insurance companies & pension funds .. "Low interest rates are not the cure – they are part of the problem. Say a little prayer that the BIS, yours truly, and a growing cast of contrarians, such as Jim Bianco and CNBC’s Rick Santelli, can convince the establishment that their world has changed." [Is it gratifying to hear Bill Gross talking like Cliff Küle? OR is it scary?]
LINK HERE to the essay