What we’re reading (9/6)
“Junk-Loan Defaults Worry Wall Street Investors” (Wall Street Journal). “Defaults on so-called leveraged loans hit $6 billion in August, the highest monthly total since October 2020, when pandemic shutdowns hobbled the U.S. economy, according to Fitch Ratings. The figure represents a fraction of the sprawling loan market, which doubled over the past decade to about $1.5 trillion. But more defaults are coming, analysts say.”
“One Of The Biggest Strikes In US History Is Brewing At UPS” (CNN Business). “Over the past year, the nascent labor movements at mighty corporations like Starbucks and Amazon have grabbed national attention. But less well-known is a looming high-stakes clash between one of America's oldest unions and the world's biggest package courier. Contract negotiations are set to begin in the spring between UPS and the Teamsters Union ahead of their current contract's expiration at the end of July, 2023. Already, before the talks have even started, labor experts are predicting that the drivers and package handlers will go on strike…If that happens, a strike at UPS would affect nearly every household in the country. An estimated 6% of the nation's gross domestic product is moved in UPS trucks every year.”
“How Passive Are Markets, Actually?” (Financial Times). “The harsh reality is that the investment industry as a whole makes a staggering amount of money — listed US asset managers had an average profit margin of almost 26 per cent in 2021, more than twice the S&P 500’s average — and yet do a bad job on average. Despite the march of passive over the decades, there are still more mutual and hedge fund managers than ever before, many of which in practice do little more than extract rents from the financial system.”
“The Other Doomsday Scenario Looming Over Markets” (Wall Street Journal). “The Fed doubles the pace of its bond runoff this month, aiming to reduce its Treasury holdings by $60 billion and its mortgage-backed securities by $35 billion monthly. Those concerned about the impact include hedge fund giant Bridgewater, which thinks markets will fall into a ‘liquidity hole’ as a result.”
“Politico’s New German Owner Has A ‘Contrarian’ Plan For American Media” (Washington Post). “A newcomer to the community of billionaire media moguls, Döpfner is given to bold pronouncements and visionary prescriptions. He’s concerned that the American press has become too polarized — legacy brands like the New York Times and The Washington Post drifting to the left, in his view, while conservative media falls under the sway of Trumpian ‘alternative facts.’ So in Politico, the fast-growing Beltway political journal, he sees a grand opportunity.”
