Market's been especially irrational

Simon
January 13 Flag
I fundamentally disagree with a lot of Charles's viewpoints (for example he believes the economy is in the "latter stages of an expansion" whereas I think the exact opposite is true) but his articles are some of the finest on the web and I always read them. As Catch said - remain curious about life. Thank you Charles.

"However, the market is pricing in the probability that more than 10% of single-A-rated corporate debt would be downgraded to triple-B, and more than 10% of triple-B corporate credit would be downgraded to double-B or to high-yield status."

The staggering economic fallout from the COVID-19 pandemic is expected to create a budget deficit in San Francisco of from $1.1 billion to $1.7 billion over the next two fiscal years, city officials said Tuesday.
The grim projections accompanied an announcement that San Francisco’s budget-setting process would be delayed for two months to buy the city’s financial experts time to readjust their spending plans in light of stark revenue losses.
In December, the projected budget shortfall over the next two fiscal years was pegged at around $420 million. That gap between the city’s spending plans and available revenue has roughly quadrupled. Last year’s budget, the largest in the city’s history, was $12.3 billion.
“The coronavirus pandemic is an immediate threat to our public health, and we’re doing everything we can to slow its spread and save lives, but we know that it is also having a major impact on our economy and our city’s revenue,” Breed said in a statement.
The city has already sustained substantial losses brought on by the threat of the coronavirus and its attendant impact on the economy. The estimated losses reflect evaporated revenue the city otherwise would have expected to receive.
Over the next three months, city officials expect a shortfall of from $167 million to $288 million, driven primarily by losses in hotel and real estate-transfer taxes. The 2020-21 fiscal year is shaping up to be worse, according to the projections, with $330 million to $581 million in revenue drained away. Losses in the 2021-22 fiscal year are estimated at between $214 million and $382 million.