Should you take that buyout?

August 29, 2020 Here are three of the week's top pieces of financial insight, gathered from around the web

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Here are three of the week's top pieces of financial insight, gathered from around the web:

Should you take that buyout?
Many struggling companies are offering employees buyouts during the recession, said Arianne Cohen at Bloomberg Businessweek. But whether you should take a package depends on your situation. People nearing retirement who've been offered a sweet deal — one-and-a-half years of salary plus continuation of medical benefits — "may be thrilled to hang up the saddle earlier than planned." But if you need or want to keep working and think you might have trouble finding a new gig — "think pandemic economy, downsizing industries, ageism, etc." — hold your fire before saying yes. Chat with HR and find out how many employees they want to lose, and how many offers have been extended. Sometimes, a "letter is a polite memo to get packing"; other times, companies extend more offers than needed, "and your job may be safe if others say yes."

'Main Street' program has few takers
The Federal Reserve has barely tapped a $600 billion emergency lending program for midsize companies "struggling amid the coronavirus pandemic," said Paul Kiernan at The Wall Street Journal. The Main Street program, which offers companies $250,000 to $25 million, "had generated loans of just $496.8 million" as of last week, a tiny fraction of its potential funds. A congressional oversight panel "urged the Treasury Department and Federal Reserve to move as swiftly as is feasible" to improve the program. The panel found stronger businesses were able to rely on their existing credit lines, while some companies that could benefit did not know about Main Street. Only 160 of the 522 lenders registered with the program have publicized that they're accepting loan applications from new customers.

Strategies for a weaker dollar
There are ways for investors to benefit from the falling dollar, said Evie Liu at Barrons. The greenback's value has dropped 10 percent relative to other major currencies in the past five months, and some analysts believe this is more than a temporary swoon. Investors who want to protect themselves from a weakening dollar "could dial up their allocation to international assets." Since foreign-based companies report earnings in the local currency, "U.S. investors will enjoy a larger gain when translating those numbers into dollars." If you're feeling deeply pessimistic about the greenback, you can "directly bet on foreign currencies through the Invesco DB US Dollar Index Bearish ETF," which profits if the dollar drops.

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.
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