What pushes down economic growth is sorry companies being fa...
What pushes down economic growth is sorry companies being far too reliant on unsustainable, short term credit, simply pushing around money to keep up appearances without growing anything real for the company(and therefore shareholders).
These companies (zombie corporations) are the real reason why, when lending rates are jacked up, it appears as though the economy slows(Sorry businesses and quality businesses both occupy space within indexes, mutual funds, etc, the sorry business goes down and drags good businesses down with it, market sentiment is not always based on facts).
Truthfully, the economy slows and speeds with the mentality of the populace, the reason it appears to do so with the fed's monetary policy, is this; the only real time a company, in modern day USA, which makes no profit is in trouble, is when the rates of the money they borrow, to perpetuate the corpse, shoot past their ability to cook books.
Unfortunately, as many of these companies are simply forgotten about, by a combination of lack of effort on behalf of the government in prosecuting, and an apathetic mindset of the populace in forcing the government to do it's job; this sentiment within the populace is encouraged rather than discouraged.
Thus, individuals see the fact that when rates are so low, you can effectively borrow money, so close to free, you can prolong a company's death a few decades, enough for those shrewd individuals to transfer their C level paychecks to private accounts and sit back with a margarita as they watch the zombie company implode when the fed raises interest rates. Why wouldn't a selfish individual exploit this system? The morals and ethics which some of us try to operate our own lives within, are not shared by all. (whole other tangent on the congruity of society, when the shared beliefs degrade)
Disclaimer: None of the above should be taken as financial advice.
These companies (zombie corporations) are the real reason why, when lending rates are jacked up, it appears as though the economy slows(Sorry businesses and quality businesses both occupy space within indexes, mutual funds, etc, the sorry business goes down and drags good businesses down with it, market sentiment is not always based on facts).
Truthfully, the economy slows and speeds with the mentality of the populace, the reason it appears to do so with the fed's monetary policy, is this; the only real time a company, in modern day USA, which makes no profit is in trouble, is when the rates of the money they borrow, to perpetuate the corpse, shoot past their ability to cook books.
Unfortunately, as many of these companies are simply forgotten about, by a combination of lack of effort on behalf of the government in prosecuting, and an apathetic mindset of the populace in forcing the government to do it's job; this sentiment within the populace is encouraged rather than discouraged.
Thus, individuals see the fact that when rates are so low, you can effectively borrow money, so close to free, you can prolong a company's death a few decades, enough for those shrewd individuals to transfer their C level paychecks to private accounts and sit back with a margarita as they watch the zombie company implode when the fed raises interest rates. Why wouldn't a selfish individual exploit this system? The morals and ethics which some of us try to operate our own lives within, are not shared by all. (whole other tangent on the congruity of society, when the shared beliefs degrade)
Disclaimer: None of the above should be taken as financial advice.
Fed Williams Doesn't Think Bank Failures Will Be 'Big Negative' for the U.S. Economy
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