Today, I will mostly be blogging about economics, a subject I know almost nothing about. I’d love to hear comments from anyone who does…
I recently listened to a Radio 4 programme on Zombie Companies (Transcript here: http://www.bbc.co.uk/programmes/b01ntfwh) which I found really interesting.
The premise is roughly as follows:
Compared with previous recessions, fewer debts are being called in. Partially this is because interest rates are so low that potentially crippling loans are affordable. Companies and families stagger on in a “Zombie” mode. They are unable to move on from their past debts, but neither are they forced into bankruptcy or receivership. At the same time banks are being gentle with their creditors. Those failing to pay their mortgages are being switched to interest-only products or allowed payment holidays instead of being evicted. Companies are allowed to maintain or increase debt levels that are widely recognised to be unsustainable.
There are two alternative views on this. Read more of this post