Summary
“Zombie” refers to a fictional undead being created through the reanimation of a human corpse. The term comes from Haitian folklore, where a zombie is a dead body reanimated through various methods, most often through magic.
Article:
From people to companies, shopping centers to cities, and even entire countries, the concept of zombies is pervasive. There’s even a Zombie cocktail and a rock group by that name, adding a touch of intrigue to these undead entities.
A zombie is used to depict something that appears dead in a form other than its natural state. A Zombie apocalypse refers to a swarm of zombies that swoop in to overwhelm the people, leaving few survivors.
The concept of a zombie apocalypse is an imaginary depiction of something that could occur in real life, such as a shopping center, a section of a city, or an entire town. Crime, vacancies, and chaos can lead to a location being referred to as a zombie apocalypse because breathing life leaves only a void of death.
Zombie Cocktail:
A zombie cocktail refers to the name of the““knock you on your ass” drink, made with light rum, dark rum, 151-proof rum, vodka, freshly squeezed lime juice, bitters, grenadine syrup, grapefruit juice, and soda There are variations of this drink that all contain two characteristics: extremely high alcohol content and a participant who turns into a “zombie” after consuming one of these drinks. This cocktail was invented in 1934 by a waiter at Hollywood’s Don the Beachcomber restaurant as a solution to a hangover. A patron, after consuming the cocktail, stated that he felt like a zombie. I refuse to confess whether I have had that experience; I’ll plead less than a fifth.
Zombie Companies:
What is a zombie company? It’s a concern for the economy. Zombies refer to companies that earn little or no profit, or barely enough profit to continue operating and servicing debt. Such companies tend to manage on a month-to-month basis, scraping together enough cash flow to pay wages, rents, repairs, or expenses, but not enough to cover interest payments or principal reductions of accrued debt. They are unable to pay off their debt. Never mind the thought of research and development, or reserves for replacement.
The original plan for all zombie companies was to increase business, so that economies of scale would eventually take effect. The increased profit would become available to reduce debt, and all participants could live financially ever after. Some zombie companies operate within the crony system, utilizing special tax incentives to prop up the appearance of economic viability. Any guess about who I am referring to? Can’t say I. It would be politically incorrect! Zombie companies often resort to issuing additional stock and/or taking on more debt to continue operating. However, when their lenders become aware of their stressed financial condition, borrowing costs may increase or even cease. Many zombies can function for years under this condition, until economic headwinds become turbulent, the government stops subsidizing, lenders stop lending, stock and bondholders discover the life support condition of the “living dead,” “zombie stocks,” or a bankruptcy occurs.
Loose monetary policy by the Federal Reserve tends to feed zombies and helps keep them alive. When the market shifts, interest rates rise, business contracts are terminated, and customers disappear, the company’s insolvency will become more apparent, and it will eventually go bankrupt. A zombie’s life expectancy is usually precarious due to the slim possibility of success. Becoming an early adopter with a high profit margin, such as with a new miracle drug, an electric car, advanced technology, or a new and improved gadget, is often preferred, but hope is not a sustainable strategy.
Some employees of zombie companies have amassed significant influence, gaining so much political power in our crony capitalist system that they assume they can rely on the “too big to fail” philosophy and expect the government to bail them out. This means encouraging these companies to take risks, while enjoying financial successes, but in the event of failure, shifting the risk to taxpayers. Remember the terms’ risen from the dead’ and ‘reanimated’ by various means, such as General Motors and AIG.
It is estimated that one onen 10tenS companies is “za ombie” with a high probability of failure. Let’s not mention disruptive technologies that constantly render what appeared to be a practical strategy obsolete overnight for these members of the walking dead.
Zombie Consumers:
How about another form of zombie referred to as a “zombie consumer”? This type of zombie, much like a company zombie, operates similarly. They accrue debt and complexity in life until there is no possible financial exit. The only options are to borrow more, obtain additional credit cards, or declare bankruptcy. Many zombie consumers spend 105% of their annual income, and credit cards are the “brains” they need to eat to stay alive. Their need for an expensive set of new tires or an engine overhaul would constitute a crisis for these zombies. You may be surprised to learn that a significant percentage of American consumers can be considered “zombie consumers.” Another article, perhaps?
Zombie Homes:
Homes that are in the process of foreclosure, where the owners vacate, but the lenders have not completed their procedure to regain ownership of the property. The properties are left unattended, with no maintenance and no security, and become rundown, creating a blight in the neighborhood. If enough homes in the neighborhood fall into this category, then the entire neighborhood becomes a Zombie Neighborhood.
Zombie Countries:
How about a “zombie country?” The US Gross Domestic Product is about 30—33 trillion dollars per year. The cost to operate the federal and state governments, including the 22 million government employees (excluding military employees), and pay for all demands, including medical, entitlements, housing, and military, is approximately $5 trillion per year. The government currently only raises about 4 trillion through taxation and other income-generating schemes. The difference is created by printing fiat money and taking on more debt through the issuance of US Treasuries and US Bonds, all of which become obligations of taxpayers. A discussion for a later date is that the top 20% of the taxpayers pay more than 80% of all the taxes.
A zombie country may have direct debt, including US Treasury bonds, Corporate bonds, and direct borrowing. Still, it also relies on a concept called “underfunding, off-balance sheet, and accrued obligations," hidden from the public eye. How about 220 trillion for the USA only?ConConsiderl the countries in the European Union and Japan, which went on a buying spree, investing their ovooverseas funds stostocks, bondsnd debt. Their mood may dramatically change when they wake up one day and discover a house-of-cards collision while they try to unload “zombie” securities. The Chinese Government owns over 12,000 companies full of zombies.
Pricing Fundamentals:
If you invest $1,000 and at the end of the year you receive back $1,100, you earn a 10% return. However, in an economic system where there is no direct relationship between earnings and value, the future becomes nebulous, or value must be redefined. In the US securities market, the value is approximately $60 trillion. However, for an average price-to-earnings ratio calculation, the real value is approximately half, two, or $30 trillion. If investors start to expect yields rather than a future illusion of profits, then expect the bubble market to deflate.
How about an investment that has no intrinsic value, has no potential for creating income, other than going up in value? Meet Bitcoin and its variations, which are used as a store of value. In a bubble economy where bets are all on future profits, the term’ zombie investments’ is appropriate.
Zombie overview:
Whether it be companies, governments, or consumers, it’s helpful to understand the concept of the “Zombie businesses.” The meaning may have evolved over the years, but the core definition remains unchanged. When a large mass of brain-dead “zombies” participates in the same habits or activities that the above entities engage in, it will most likely end in financial destruction. After all this, maybe it’s time for our“Zombie cocktail! tt the same time, I intend to sift through my old 45 vinyl record collection and enjoy the timeless hit,sincluding ““Time of the Seasons,” “She’s Not There,” and “Tell Her No.” From the mid-60s British rock band, The Zombies.