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United States: Congress finally passed the $900 billion stimulus bill.
Below are the key components of the package …
• A one-time $600 payment to most Americans
• Extension of the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs
• Extension of the $300 per week in additional unemployment benefits through mid-March
• $284 billion for the Paycheck Protection Program (PPP) and additional small business funding worth $35 billion
• Extension of the federal eviction moratorium through the end of January plus $25 billion for a rental assistance fund
• Up to $68 billion for vaccine distribution, vaccine administration (making it free), and COVID testing/contact tracing
• A $13 billion increase to SNAP (foods stamps, food banks, etc.)
• $10 billion for childcare assistance
• $10 billion for the USPS
• $45 billion for transportation: highways, airlines, transit systems
• $7 billion for broadband internet for students
• $82 billion for schools (K-12 and colleges)
• $13 billion for agriculture
… and some additional “features.”
• Termination of unused Fed lending programs
• An attempt to end “surprise medical billing”
• Temporary tax cuts on beer, wine, and liquor
• And finally, the cost of meals becomes a deductible business expense.
Here is a rough breakdown of the planned expenditures.
Eurozone: Italy and Spain are the largest beneficiaries of the €47.5 billion REACT-EU package (€37.5bn allocated in 2021 and €10bn in 2022.)
But other fiscal measures will be rolling off.
Asia-Pacific: South Korea’s memory chip export prices are at a decade-low, pressuring manufacturers.
Mexico’s key fiscal risk in 2021 will be dealing with Pemex credit issues and its oil production targets (according to Barclays Research).
Reuters: – … a combination of declining output, crushing tax obligations and a hefty payroll burden have gradually weakened [Pemex], which is a major source of federal budget revenues.
Credit: Finally, here is an illustration of how CLOs cut off payments and delever when their portfolio CCC holdings exceed the maximum allowed amount (due to downgrades).
Food For Thought: Wrapping presents:
Edited by Devon Lall
Contact the Daily Shot Editor: Editor@DailyShotLetter.com
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