"Zombie firms"

Comment: New term "zombie corporation"

Revised AIG Terms Begin Treasury Transfusions to 'Zombie' Firms

Excerpt:

Taxpayers are ``keeping the zombie alive,'' said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors and former director of research at the Atlanta Fed. ``We keep getting deeper and deeper into these holes.''

The shift is likely to vastly expand political demands for saving dying companies in the name of financial or economic stability. The administration of President-elect Barack Obama may soon have to consider credit or capital injections for other insurers, automakers, even retailers as the U.S. slides deeper into what could be the worst recession in a quarter-century.

``Are you going to do General Motors and Ford, and, if you do those, are going to go on and do retailers?'' said William Isaac, former chairman of the Federal Deposit Insurance Corp. and now chairman of the Secura Group LLC. `` Where does it stop? That is a very difficult decision we are going to face as a country.''

Comment: As long at they keep "eating blood" (receiving taxpayer money), they (the "zombie firms") will survive. Wonder why the government doesn't just buy the whole company for $ 1.68 billion (market capitalization)? (Instead of loaning them $ 25 billion). I've loaned and given people (hard luck cases including some relatives), but at some time one has to ask ... how does this money really help them? GM may be a case like that!