What we’re reading (11/10)
“How Risky Is Private Credit? Analysts Are Piecing Together Clues” (Wall Street Journal). “‘If rates stay higher for longer—or higher forever—then these companies are not equipped,’ said Ramki Muthukrishnan, head of U.S. leveraged finance at S&P Global. He said companies would struggle to pay their debt. Just 46% of the companies in the analysis would generate positive cash flow from their business operations under S&P’s mildest stress scenario, in which earnings fell by 10% and the Fed’s benchmark rates increased by another 0.5 percentage point, the ratings firm said.”
“Citadel’s Ken Griffin Sees High Inflation Lasting For Decades” (MarketWatch). “…Ken Griffin, head of the Miami-based hedge-fund manager Citadel, said higher baseline inflation may go on for decades, caused by structural changes that are pushing the world toward de-globalization.”
“Moody’s Cuts U.S. Outlook To Negative, Citing Deficits And Political Polarization” (CNBC). “‘In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,’ the agency said. ‘Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.’”
“Has IBM Built The Next Generation’s 401(k) Plan?” (Morningstar). “Whatever its name, the introduction of the RBA converts IBM’s employee-retirement plan into a hybrid scheme. It will now consist partially of a defined-contribution plan and partially of a defined-benefit plan. Such arrangements are not unique, but they are unusual—particularly when openly coupled with the decision to cancel the company’s 401(k) match program.”
“How To Hijack A Quarter Of A Million Dollars In Rare Japanese Kit Kats” (New York Times). “These particular Kit Kats would become the key players in an ultimately frustrating saga of shell email accounts, phantom truckers, supply-chain fraud and one seriously bewildered cargo freight broker. Interviews and emails shared with The New York Times tell the story of just one instance of ‘strategic theft,’ a growing corner of the criminal world that the F.B.I. has said accounts for some $30 billion in losses a year — with food being among the top targets.”
