What we’re reading (3/22)
“U.S. Economy Is ‘On The Brink’ Of A Complete Recovery, Says Richmond Fed’s Barkin” (CNBC). “The U.S. economy is recovering from the Covid-19 recession, but some economic “scarring” may take a long time to heal, said Richmond Federal Reserve Bank President Thomas Barkin. Economic scarring refers to damage left behind by crises that will suppress growth prospects over the medium or long term.”
“One Measure Of Debt-Market Distress Is Down 90% Since March Amid Fed Assistance And Easy Money” (Business Insider). “The US distress ratio - the proportion of speculative-grade (rated "BB+" or lower) issues with option-adjusted composite spreads of more than 1,000 basis points relative to U.S. Treasuries - continued to trend down in February 2021, hitting 4.0% after peaking at 35.2% just 11 months earlier, according to a report from S&P Global.”
“Bond Rout Hits Safest Company Debt” (Wall Street Journal). “Bonds from highly rated companies have lost more than 5.4% this year, counting price changes and interest payments, through March 18. That is their second-worst start in data going back to 1996, the worst being last year’s pandemic-fueled selling, according to Bloomberg Barclays data. That compares with a 0.2% return for high-yield bonds and a 1.7% gain in corporate loans to highly indebted borrowers.”
“States Are Out Of Excuses About Remote Work And Taxation” (Real Clear Markets). “As a result of the pandemic, many Americans switched to remote work for long periods of time in 2020. Many employees that normally cross state lines to an office (as is common in large multi-state metro areas) but instead worked from home last year may find that the state in which their office is located still expects them to pay taxes as if nothing had changed. This also opens up the possibility of double taxation, as both the resident’s home state and their prior work location’s state could allege that the work was done in that state.”
“Turkey's Lira Plunges After Erdogan Fires Central Bank Head” (CNN Business). “Turkey could be on the cusp of another currency crisis after President Recep Tayyip Erdogan abruptly fired the head of the country's central bank, putting the lira on track for its worst single day decline against the US dollar in nearly three years.”
