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Zombie in a rising tide

July 2, 2014

BoatUS: “Why Boats Sink“:

When it comes to gradual leaks due to slowly failing parts, too many boats existed in a “zombie state” somewhere between floating and sinking, dependent upon the bilge pump, which merely postponed the sinking until the pump failed or was overwhelmed. This one is a no-brainer: lack of maintenance is the factor here.

and

Some of these sinkings might have been avoided if some some extra care had been taken – and some can be chalked up to simply bad luck.

Recall the exasperation of boat owner who lost his boat home and was in zombie mode.. But less literally, this also sounds a lot like zombie companies (businesses hanging on because of low interest debt).

Fears over future rising interest rates” by Patrick Knox, quoting Andrew Watling of Quantuma:

“An interest rate rise will have the biggest impact on the south east’s ‘zombie businesses’ – those that are already only paying the interest on their debts – and personal finances.”

Finance is like fluid because of idea of cash as liquid asset, of solvency as the ability to absorb costs, until eventually under-water submerged in debt, ultimately insolvent.

Today the stock market hit new record highs. There is the saying, “a rising tide lifts all boats” which is related to earmark-politics but also supply-side, trickle-down theories of “voodoo” economics. But alternatively, a rising tide may also sink some ships (particularly those moored down or poorly maintained).

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From → economics

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