In our continual mission to make Line Go Up, we’ve seen the growth of many companies that seem to do nothing but make money. This is despite the fact that these companies, by and large, lose money. For example, OpenAI, the company behind ChatGPT, has debated valuing itself at $1 trillion — even though the company lost $11.5 billion last quarter alone.

Much like the passengers on the Hindenburg discussing the marvel of hydrogen, you may be wondering, “How is this possible?” The answer is, in the long term, it kind of isn’t.

Experts are warning that the economy is becoming dangerously overfilled with “zombie companies.” These are companies that cannot generate enough profit to cover their interest payments, and survive only by continually borrowing.

According to Bloomberg, there are now 639 companies in the Russell 3000 that meet this description. The number hasn’t been this high since 2021 and 2022. Anything important happen just before then? I can’t remember.

So, if companies got out of this before, can’t they just get out of it again? Well, probably not. With the double punch of tariffs and the Fed’s signaling that it might not continue to cut rates, these zombie companies are going to have to work extra hard to boost profits at a time when doing so is getting more difficult by the minute.

In short, things are just great. Don’t worry about it!