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That’s it… I QUIT
Girl Economics | 26th March 2024
Girl Economics Admin
March 26, 2024
In this edition…
Lots of news in currency markets following the Bank of Japan’s decision to cut interest rates, and we take a closer look at the economic implications of the ‘Loud Quitting’ trend.
Articles of the Day
After a brand new Alaskan Airlines 737 Max plane was grounded in January, Boeing has been scrambling to reassure investors that its planes are safe. CEO Dave Calhoun appears to be collateral. TOPICS: business, shareholders, stock markets | Economic theory tells us that higher interest rates should strengthen a currency due to capital inflows. But in Japan, the Central Bank’s increase in the rate from between 0 and -0.1% to between 0 and 0.1% has caused the yen to depreciate. This article explains why. TOPICS: FOREX, Monetary Policy |
In The News
A Silver Lining for FTX Users
FTX, a collapsed crypto exchange, is set to repay its customers up to 120-to-140 per cent of their initial asset value due to surging prices of cryptocurrencies and artificial intelligence assets. The repayments, benefiting over 100,000 creditors, are crucial for former FTX CEO Sam Bankman-Fried's sentencing defense in a fraud and money laundering case. Negotiators are exploring post-petition interest to offer additional payments for lost investment gains. Assets like bitcoin and a stake in AI startup Anthropic have multiplied in value since FTX's bankruptcy, contributing to higher repayments. However, the IRS's $24bn tax claim against FTX could impact the final payout.
Britain’s Poor Housing Stock
The Resolution Foundation reported that Britain's housing situation is the worst among advanced economies, characterised by high prices, cramped and poorly insulated buildings, and long commutes. Despite high levels of outright home ownership, the analysis revealed that housing affordability in the UK, when factoring in all households, is worse than in any OECD country except Finland. The housing crisis, decades in the making, stems from insufficient home building and modernisation efforts by successive governments. UK households pay more for housing and receive less space compared to counterparts in similar income countries. The UK also has one of the lowest rates of second-home ownership in Europe and an aging housing stock, with knock-on effects for energy efficiency. The Resolution Foundation called for urgent action from political parties to address these housing challenges in the upcoming general election campaign.
US Corporate Bond Bonanza
In 2024 $22.8 billion poured into US corporate bonds as investors chased higher returns before expected interest rate cuts by the Federal Reserve. This rush caused the gap between corporate and government bond yields to shrink to its lowest level in two years, especially for safer investment-grade bonds. Even though some worry about companies not being able to pay back their debts and facing financial trouble, investors are still drawn to the good returns these bonds offer. As a result, companies are issuing more bonds. However, experts caution that the situation could change, and investors should carefully study the credit risks before investing.
IN DEPTH: The Economics of “Loud Quitting”
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