%1

With just weeks left before the extra $300-a-week federal unemployment checks run out, scores of unemployed Floridians are urging Gov. Ron DeSantis to reconsider a decision to end participation in the federal government’s enhanced unemployment benefits program, the Associated Press reported. Florida is among a growing number of Republican-led states that are withdrawing from the federal Pandemic Unemployment Compensation program. The state’s participation is set to end June 26. As Florida’s economy rebounds from the pandemic, some businesses say they can’t find enough people to fill open jobs. Some Republicans assert that the unemployed aren’t actively looking for work because of the federal checks they are still getting. DeSantis has said the economic rebound means there are jobs to be had, and that withdrawing from the program would “incentivize people to go back to work.” Rich Templin, the legislative policy director with AFL-CIO Florida, said during a video news conference that withdrawing from the program would “prove disastrous for the workers currently relying on these benefits.” “We’re being told that workers are not seeking employment because they want to sit at home eating bonbons for less than the minimum wage,” Templin said. “This is a completely false mean-spirited narrative, not based in reality and certainly not based on any sound policy consideration.” Templin and others acknowledged that the last-ditch effort to extend the benefits is likely futile, considering the political and ideological divides over the issue.

President Joe Biden has pitched to Republicans the idea of a 15% minimum tax on U.S. corporations, along with strengthened IRS enforcement efforts, as a way to fund a bipartisan infrastructure package, Bloomberg News reported. The proposal sets aside the Biden administration’s proposal to raise the headline corporate income rate to 28% from 21% — a non-starter for Republican lawmakers — though that could be pursued elsewhere. White House Press Secretary Jen Psaki confirmed the offer during a briefing Thursday. Under the pitch to Republicans, companies that have lots of tax credits and deductions would be required to pay at least 15%. The plan would also increase tax revenues by conducting more audits of rich taxpayers. Those two funding measures were already included in Biden’s tax plans. The White House sees the offer as raising money without increasing tax rates or rolling back President Donald Trump’s 2017 tax cuts, something that Republicans have said is a red line in the negotiations.

As distressed real estate investors struggle to find enough properties to snatch up, at least two money managers think they’ve found an untapped source of troubled hotels, offices and retail space: commercial real estate bonds, Bloomberg News reported. Hedge fund Axonic Capital and startup Metamorphosis Hotel Capital Partners are picking apart commercial mortgage-backed securities as they hunt for bargains, according to people with knowledge of the funds’ strategies. The two have different plans for how to gain possession of the underlying assets, but their end goals are similar: to take control of, fix and flip ailing properties for significant profit. Grabbing CMBS collateral on the cheap is hardly a new tactic — firms did it after the global financial crisis. This go around, the thinking is that properties that were financed by banks may continue to receive time from their lenders to meet interest obligations. But buildings with mortgages that were bundled into bonds and sold to investors likely have less flexibility to avoid being sold off should they miss looming payment deadlines. “This is an interesting strategy that’s proven successful in other asset classes,” said Paul Norris, head of securitized-credit investing at asset management firm Conning & Co., which oversees about $198 billion globally. “We expect to see more hedge funds do this,” he said, noting that he’s not pursuing the strategy himself. Read more.

Next Tuesday: Don't miss the abiLIVE webinar "Key Concepts in Post-COVID Real Estate Restructurings" as experts discuss key cases, rulings and strategies including an assessment of asset valuations and projections. Register for FREE.

Half of U.S. states, all of them led by Republican governors, are cutting off billions of dollars in unemployment benefits for residents, rebuffing a key part of President Joe Biden’s response to the coronavirus recession, Reuters reported. Maryland on Tuesday became the 25th state to announce it would stop the extra $300-per-week benefits on July 1 before the federal program lapses in September. Governor Larry Hogan (R) said that while the program gave "important temporary relief" during the pandemic, it was no longer needed now that "vaccines and jobs ... are in good supply." Hogan is following 24 other GOP state leaders and business lobbying groups, who say the benefits mean people are turning down good jobs, leaving companies without the workers they need to reopen. The Biden administration, Democrats, workers, activists and some economists argue, however, that a host of ongoing troubles — from lack of childcare to continued fear of infection to low wages — are keeping people out of the labor force. Just over 41% of the United States' 328 million people are fully vaccinated. The United States is about to undergo a real-time test of the issue. The 25 states turning down the federal cash have announced different end dates for the program. Benefits expire June 12 in Alaska, Iowa, Mississippi and Missouri, with the other 21 states falling off through July 10.

The U.S. government’s nationwide prohibition on evictions can stay in effect, a federal appeals court ruled, Bloomberg News reported. A three-judge panel in Washington, D.C., said that the eviction moratorium instituted by the U.S. Centers for Disease Control and Prevention can continue while the Biden administration appeals a lower-court ruling that overturned the ban last month. In that case, U.S. District Judge Dabney Friedrich ruled the CDC had exceeded its authority when it issued a broad moratorium on evictions across all rental properties. After the government appealed, Friedrich put a temporary stay on her order. In upholding the stay on Wednesday, the appeals court said the government had made a “strong showing that it is likely to succeed on the merits.” The moratorium, first enacted by President Donald Trump and extended by President Joe Biden, aims to prevent evictions amid a public health emergency that has seen millions of Americans lose their jobs and fall deep into debt. The Alabama Association of Realtors, which filed the suit challenging the moratorium, didn’t immediately respond to a request for comment.

The Federal Reserve Board plans to begin gradually selling a portfolio of corporate debt purchased through an emergency lending facility launched last year, as the COVID-19 pandemic was spreading panic through financial markets, Bloomberg News reported. “Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds,” the Fed said in a statement on Wednesday. The New York Fed will provide additional details before sales begin, it added. There was around $13.7 billion outstanding in the Fed’s Secondary Market Corporate Credit Facility in a range of corporate bond and ETF holdings, according to balance sheet details updated last week.

AMC Entertainment Holdings Inc. extended Wednesday’s surge in premarket trading as the Reddit retail-trading army continued to gorge on the stock, sending it to heights that has left Wall Street pros perplexed, Bloomberg News reported. After rising 95% to a record high in the last regular session, AMC gained 13% to $71.01 as of 4:02 a.m. in New York. The money-losing movie-theater chain has a market value of more than $30 billion, making it more valuable than at least half of the companies in the S&P 500 Index. While most financial commentators agree that the stock has detached itself from traditional investment fundamentals, they are less sure of the reason. Some cite an abundance of liquidity and savings created during the pandemic, while others point to the impact of social media in providing a platform for small investors to egg each other on. 

Mudrick Capital sold all its stock in AMC Entertainment Holdings Inc. as of Tuesday, the same day the movie theater chain disclosed that the investment firm had bought $230.5 million of fresh shares to bolster its finances, Bloomberg News reported. Mudrick no longer holds any AMC shares and sold at a profit. The firm disposed of its stake after concluding that AMC’s stock is overvalued, propped up by a recent wave of day-trader enthusiasm. AMC said yesterday that it sold stock to Mudrick with plans to “go on offense” for acquisitions. The agreement with New York-based Mudrick was for 8.5 million shares of common stock at $27.12 apiece. The stock purchase came with the assurance that the shares would be “freely tradable,” meaning the firm could sell the shares at any point or in any amount it chose. Debt holders have also benefited from the recent equity rally. Some of its junk-rated second lien bonds due 2026 that were trading as low as 5 cents on the dollar in November are now close to face value, and quotes on its senior subordinated notes maturing in 2027 jumped about 4.5 cents Tuesday to almost 80 cents.