Brian Chappatta, Columnist

Central Banks Are Creating a Horde of Zombie Investors

In a world of ultra-stimulative policies, individuals are plowing money mindlessly into risky assets.

June 21, 2019 at 11:00 AM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Call investors programmed; call them zombies — it’s the same thing.
Photographer: Britta Pedersen/AFP/Getty Images

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Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, wrote a provocative op-ed in the New York Times last weekend. Titled “When Dead Companies Don’t Die,” it argues that unprecedented monetary stimulus from global central banks created a “fat and slow” world, dominated by large companies and plagued by a swarm of “zombie firms” — those that should be out of business but survive because of rock-bottom borrowing costs.

I would add that central bankers are creating a horde of zombie investors as well.