EU leaders reach $2 trillion deal on recovery plan after marathon summit [CNBC]
In the end, they agreed to distribute 390 billion euros, out of the total 750 billion fund, in the form of grants — a significant reduction from an initial proposal made by France and Germany in May for 500 billion euros of grants. The EU also agreed that net debt issuance will end in 2026 and that they will repay all the new debt by 2058.
In the meantime, member states will also have to develop plans outlining how they will invest the new funds. These so-called Reform and Recovery plans will have to be approved by their European counterparts, by qualified majority — rather than by unanimity as had been insisted upon by the Netherlands at one point.
A Crucial Macro Hedge-Fund Trade Is Getting Turned Upside Down [Bloomberg]
The Australian and Canadian dollars now rank among the most efficient for funding carry trades, in which investors borrow those currencies at low interest rates to fund purchases of higher-yielding assets in emerging markets. That’s a reversal of how these trades worked in the past, when assets in those two countries were popular purchases in carry trades…. “I look at Aussie, I look at Canada, I look at euro -- all these currencies are undervalued against the dollar, and therefore the dollar is going to be under some pressure,” said Paresh Upadhyaya, director of currency strategy and a portfolio manager at Amundi Pioneer Investment Management.
Is Hedge Fund Secrecy a Sign of Skill — Or a Red Flag? [II]
The more secretive funds, they found, did not outperform the more transparent funds. Instead, the researchers found that secretive hedge funds actually underperformed peers during the financial crisis — suggesting, according to the authors, that the secrecy veiled higher risk-taking.
“As best as we can tell, it doesn’t seem to signal skill,” Kelly said. “If anything, it suggests that funds might be taking on more risk.”
Bitcoin And Other ‘Crypto-Assets” Excluded From Central Bank Experiments [Forbes]
The broad parameters of the experiments include everything from testing regulation using digital currency to improve cross-border payments, an analysis of how a central bank digital currency should be made available, and importantly, “to explore new methods of exchanging financial instruments (excluding crypto-assets) for central bank money….”
Skeptics of the CBDC concept argue that so long as central banks continue to have the authority to print or issue nearly unlimited amounts of the currency the underlying problems of inflation will continue to drive people to more distributed, deflationary alternatives such as bitcoin, which has a set amount. Other skeptics point to the unlikelihood that central banks will ever actually allow citizens the same privacy they have in the real world, online, and could use the technology as a way to track their own citizens’ spending habits.
SoftBank Removes $700 Million From Credit Suisse Debt Funds [Bloomberg]
The redemption comes after Switzerland’s second-largest bank completed a review into its supply-chain finance funds to address investor concerns about possible conflicts of interest. The funds, which hold short-term corporate loans, have financed a number of startups backed by SoftBank’s Vision Fund as well as agreed in April to source most of their debt from Greensill…. The bank says it is also planning to change its investment guidelines to reduce the funds’ exposure to any one company, including those backed by SoftBank’s Vision Fund.
LinkedIn will cut 6% of its workforce as the pandemic slams recruitment [CNN Business]
The professional networking website "is not immune to the effects of the global pandemic," CEO Ryan Roslansky wrote in a note to staff posted publicly on the platform. He added that the company has been hurt "as fewer companies, including ours, need to hire at the same volume they did previously."
"I want you to know these are the only layoffs we are planning," Roslansky wrote, adding that the cuts would affects LinkedIn's global sales and talent acquisition units.
A Company Backs a Cause. It Funds a Politician Who Doesn’t. What Gives? [DealBook]
An examination of political spending over the past decade shows how those companies — and dozens of other Fortune 500 corporations — quietly funded political efforts that are antithetical to their public stances. They financed state attorneys general seeking to undo the Affordable Care Act, which has provided health insurance for millions of Americans during the pandemic; they provided funds that backed local legislators who tried to roll back L.G.B.T.Q. rights; and they gave money that supported candidates challenging federal climate change initiatives…. Of course, for companies that are as outspoken about lower taxes or lighter regulation as they are about climate change, then their donations to Democratic groups could also be seen as working against their interests.