Above the Fold

Are Some Fed Funds Stigmatized?

Years after the Great Recession, companies like General Motors, American Airlines, Citibank and so many more were taunted by consumers, competitors and the media for the “bailouts” they received during the downturn. For some, there was no other option than to borrow from these special government lending programs; others were forced to declare bankruptcy and fully restructure, often at the detriment of shareholders and creditors. 

With the painful memory of 2009 still relatively fresh, the recent pandemic triggered a quick and aggressive response from lawmakers and the Federal Reserve (Fed) to proactively stimulate what seemed like a quickly spiraling situation. One part of the programs launched (announced) in March by the Fed would allow the purchase of up to $750 billion in corporate bonds — but, to date, not one bond has been purchased. 

A recent article in The Wall Street Journal suggested that companies could be stigmatized had they taken advantage of the program. And as markets return to normal, investors could view participation as a sign of weakness, triggering adverse pricing in future offerings. The real reasons are obviously more complex, but some believe that the announcement was enough to stabilize markets, and maybe companies are strong enough (in general) to do without the backstop … for now.  

Three Things 

1. A Virtual Battle Is Heating Up in the Digital World – Tens of millions of new users have taken to virtual workspaces facilitated by products like Zoom, Teams, Slack, Hangouts and others. While each offers its own advantages and preferences among users, Microsoft is reportedly using aggressive tactics and its deep enterprise integration to gain market share — others, like Facebook, are also vying for business in the space (currently dominated by Zoom). It’s all good news for consumers who have plenty of options at little or no cost. 
2. High Profile? Google Has You Covered – Google will be expanding its Advanced Protection Program (APP) across Nest home devices (several other Google products already utilize APP as well). Through the use of a physical security key, the APP is the strongest level of protection for people at high risk of digital attacks like journalists, activists, business leaders and election personnel. 
3. We Still Need a Place to Live… – Despite the pandemic, civil unrest and shuttering of thousands of businesses, apartment manager, Greystar Real Estate Partners LLC, is betting that the American residential rental market will remain strong. Greystar recently paid nearly $200 million in an all-cash deal to acquire the management business from Alliance Residential Co. for nearly 130,000 housing units, increasing Greystar’s management portfolio to 660,000 units.  

Did You Know?

The Latest (Fact-Checked) COVID-19 Positives

• While the ADP employment report showed a loss of 2.76 million jobs, the drop was far less than economists had expected. Some, like Moody’s Analytics chief economist Mark Zandi, believe the worst is over and job creation could begin as early as June. 
• Across the nation, the average share of hospital beds occupied by COVID-19 patients is dropping. While there are still states seeing increases, major coronavirus hotspots — New York, New Jersey, Louisiana and Illinois — are seeing steady decreases.