Dr. Doom, Economist Nouriel Roubini has predicted that the recession is going to be more severe than estimated, saying “many zombie institutions, zombie households, corporations, banks, shadow banks and zombie countries are going to die , so we'll see who swims naked” also predicts a 40% drop in the S&P 500 at least.
So let's understand what you mean by zombie, what
this outstanding economist is that a zombie is an entity in the financial world that has no life, that is, it is dead, but it still walks like zombies in the movies, that is, they are corpses but they keep moving.
And how do these entities keep moving in the financial world, with debt, when a financial entity is alive it is when it produces, of course when it produces some good that can be exchanged for money, that is, the money it receives is received for what that it sells that it produces, there is a kind of backing behind that role.
On the other hand, there are companies that do not produce and begin to be in deficit and begin to be in the red and do not have enough income because they do not produce, but they have to pay salaries to their employees, so what do they do? They go to the bank and ask for a loan and there they begin to turn into zombies because the more they are based on loans, which means that they are going to have to repay them later, then the less life they have because they are not producing.
When we reach extremes, as is happening today in almost all areas, it is that they only live on debt, that they hardly produce anymore and have expenses, the default arrives again, that is, they have to repay the debt, they arrived until the moment of repayment and they don't have what and they ask for another loan.
So that's a Zombie, which in order to repay its debt needs another loan and the interesting thing is that here Mr. Nouriel Roubini also talks about zombie countries and we already know unfortunately that many countries, especially in Latin America, that have resources have to live of debt, that is what has brought the elites of the world to the countries.
And that is said with respect to homes, which is very sad, institutions that are companies of all kinds, corporations and banks, so this panorama is really very scary.
