Apocalypse Ahead For Zombie Stocks As Prime Borrowing Rate Exceeds 8% | David Trainer

A concern that many recent experts on this channel have raised is that there is a dangerously high percentage of corporations that classify as “zombie companies”.

As the cost of debt increases as interest rates rise — with the prime bank borrowing rate now above 8% — the likelihood that these companies could start failing en mass increases.

How big of a concern is this? What implications would a mass die off of these zombies have on the markets, and the economy in general.

For answers, we turn to David Trainer, CEO of research firm New Constructs, who has been ringing the warning bell of late over the risk of zombie contagion.