Opinion | This Is How the Coronavirus Will Destroy the Economy – The New York Times

Though the Federal Reserve moved over the weekend to slash rates and buy treasuries, markets around the world fell on Monday anyway. The coronavirus threatens to set off financial contagion in a world economy with very different vulnerabilities than on the eve of the global financial crisis, 12 years ago.

In key ways the world is now as or more deeply in debt as it was when the last big crisis hit. But the largest and most risky pools of debt have shifted from households and banks in the United States, which were restrained by regulators after the crisis, to corporations all over the world.

As businesses deal with the prospect of a sudden stop in their cash flows, the most exposed are a relatively new generation of companies that already struggle to pay their loans. This class includes the zombies companies that earn too little even to make interest payments on their debt, and survive only by issuing new debt.

via www.nytimes.com