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New York CNN —Soon, Americans are going to able to try chicken that comes directly from chicken cells rather than, well, a chicken. On Wednesday, the USDA gave Upside Foods and Good Meat the green light to start producing and selling their lab-grown, or cultivated, chicken products in the United States. In a nutshell, lab-grown meat — or cultivated or cell-based meat — is meat that is developed from animal cells and grown, with the help of nutrients like amino acids, in massive bioreactors. Meat eaters who are concerned about those types of risks might prefer cultivated meat. Eat Just Inc's Good Meat cultivated chicken.
Persons: New York CNN —, It’s, don’t, Andrew Noyes, Noyes, , Bruce Friedrich, Friedrich, Julia Horowitz, ” Noyes, José Andrés, Ivy Farm, That’s, Noyes didn’t, Matthew Walker, Walker, won’t, , — CNN’s Kristen Rogers Organizations: New, New York CNN, USDA, Inc, Good Food Institute, Impossible Foods, CNN, Ivy Farm Technologies, Service, FDA, British, Ivy, Companies, Foods Locations: New York, United States, Agriculture, British, Italian, Singapore, Washington, San Francisco
“Quantitative tightening,” or QT, by top central banks will suck $2 trillion in liquidity out of the financial system over the next two years, according to a recent analysis by Fitch Ratings. Investors and banks calibrate their strategies to the amount of money in the financial system, he noted. Then, central banks started withdrawing liquidity from the financial system. Even worse, many banks have large holes on their balance sheets because central banks have simultaneously jacked up interest rates. While government debt levels have skyrocketed in recent years, the cost of servicing that debt has been tamped down by the willingness of central banks to buy large chunks of it.
Yet Europe’s economic prospects have brightened in recent months, according to the European Commission. It now expects the EU economy to expand 1% this year, up from an estimate of 0.8% in February. But it reflects sharply lower energy prices, which are reducing costs for businesses and easing the strain on households. Even so, the Commission acknowledged that higher borrowing costs aimed at taming rising prices will weigh on growth in the months to come. Growth in Germany, the bloc’s biggest economy, is expected to slow sharply to 0.2% in 2023.
London CNN —The political unrest that’s engulfed Pakistan since former Prime Minister Imran Khan was arrested earlier this week will complicate efforts to secure a financial lifeline from the International Monetary Fund and exacerbate the country’s economic crisis. Pakistan’s economic meltdownThe political tumult in Pakistan comes as the country grapples with a dire economic outlook. The government has been working with the International Monetary Fund to resume a financing program that’s been stalled since November and expires in June. Prime Minister Shehbaz Sharif said in a televised address Friday that the country’s economic problems stem from his predecessor. In February, the ratings agency said about 50% of government revenue will need to go to debt interest payments “for the next few years,” compounding economic woes and fanning political discontent.
London CNN —US inspectors, after receiving access to auditors’ books for the first time, discovered significant shortcomings in audits of companies based in China and Hong Kong that are listed on US stock exchanges. The Public Company Accounting Oversight Board (PCAOB) said Wednesday that it uncovered major “deficiencies” after checking the work of KPMG Huazhen, which is headquartered in mainland China, and PwC’s practice in Hong Kong. Deficiencies were found in 100% of the audits by KPMG Huazhen reviewed and 75% of those from PwC Hong Kong. US regulators had long lobbied for this access, worried that Chinese firms listed on Wall Street were misrepresenting their financial heath. The breakthrough meant that more than 160 Chinese companies avoided being kicked out of the world’s biggest stock market, as US regulators threatened if they weren’t able to inspect their audits.
President Joe Biden will host Republican House Speaker Kevin McCarthy and other congressional leaders at the White House on Tuesday for a critical meeting on raising the US debt ceiling. The closest analogue to the US debt ceiling is the set-up in Denmark. Lawmakers did not want the debt ceiling to become a proxy for difficult conversations about the government’s fiscal plans. That makes it less likely the debt ceiling could be turned into a political football. Even so, it’s clear that in Denmark, the debt limit has enabled the smooth functioning of government, Kirkegaard said.
But Gary Richardson, a Federal Reserve historian, is worried policymakers — now contemplating taking a breather — still risk repeating mistakes from that era. A premature retreat could cause the Fed to lose its handle on the situation, presenting even grimmer options down the road. Quick rewind: The chair of the Federal Reserve at the time, Arthur Burns, hiked interest rates dramatically between 1972 and 1974. Inflation later roared back, forcing the hand of Paul Volcker, who took over at the Fed in 1979, Richardson said. But the comparisons reveal the high stakes for the Federal Reserve at a moment of acute uncertainty.
Premarket stocks: This is how the banking crisis ends
  + stars: | 2023-05-05 | by ( Julia Horowitz | )   time to read: +7 min
London CNN —US regional bank stocks look set to rebound Friday but are still down sharply this week, accentuating fears that federal regulators have not yet contained a crisis in the sector that could shake the financial system. Breaking it down: Wall Street is on the hunt for any signs of vulnerability in the banking system after the high-profile demise of Silicon Valley Bank, Signature Bank and First Republic Bank in a matter of weeks. While authorities stepped in to protect depositors at those banks, investors were left with stocks that were suddenly worthless. “I believe it really only ends after we get some type of government intervention,” Michaud told me. The value of short positions in regional bank stocks reached $15.1 billion in mid-April, up from about $13.7 billion one year ago, according to data from S3 Partners.
First Horizon (FHN) and TD Bank (TD)also called off a $13 billion deal Thursday that would have formed America’s sixth-largest bank. The Stoxx Europe 600 Banks Index, which tracks big EU and UK banks, has shed 14% over the same period. Year-to-date, European banks are up more than 3%, while US lenders are down 26%. Broader market dynamics have also helped European bank stocks. The European Central Bank, which meets Thursday, has also been slower than the US Federal Reserve to hike interest rates.
However, job openings that month tumbled to their lowest level since May 2021, according to data released Tuesday. The shifting landscape paved the way for the collapse of Silicon Valley Bank in March and First Republic Bank this week. By blessing JPMorgan’s takeover of First Republic Bank, the Democratic US senator fears federal regulators just made the “too big to fail” problem even worse. To the relief of investors and bank customers, the JPMorgan deal protects all of First Republic’s depositors. The decision to invest in food and grocery delivery during the pandemic has become a big advantage for Uber.
In the first quarter of 2023, net demand for loans to businesses fell the most since the end of 2008, the central bank found after polling 158 banks in the region between March 22 and April 6. “From a historical perspective, the pace of net tightening in credit standards remained at the highest level since the euro area sovereign debt crisis in 2011,” the ECB said. The central bank has made clear that it won’t ease the most intense campaign of rate hikes in its history until it is certain inflation is under control. “What really matters,” she added, is that inflation recedes to the central bank’s 2% target over the medium term. “Eurozone banks are already generally tightening credit standards and terms and loan demand is decreasing,” Berenberg economist Holger Schmieding said in a note to clients.
WEF — which hosts a gathering of global leaders in Davos, Switzerland, every year — found that employers expect to create 69 million new jobs by 2027 and eliminate 83 million positions. That will result in a net loss of 14 million jobs, equivalent to 2% of current employment. The rush to deploy artificial intelligence, meanwhile, will serve as both a positive and a negative force. At the same time, the proliferation of artificial intelligence will put many roles at risk, as robots replace humans in some cases. There could be 26 million fewer record-keeping and administrative jobs by 2027, WEF predicted.
The US Federal Deposit Insurance Corporation insures deposits up to $250,000 per person, per account, using a fund that banks pay into. “I don’t think that’s served us well.”Some argue the US deposit insurance limit should be 100 times higher. What is deposit insurance? Deposit insurance is aimed at calming fears, giving customers less reason to pull their cash out in a hurry. The debate over deposit insurance taps into bigger questions about the state’s role in private enterprise.
Europe's economy grew 0.3% in the first quarter
  + stars: | 2023-04-28 | by ( Julia Horowitz | )   time to read: 1 min
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Collisions are more likely in such cases, raising the odds of a devastating oil spill. It’s also harder to tell whether the vessels with murky ownership comply with the strict rules governing oil transfers at sea, according to Kenney. Group of Seven nations have imposed a cap on the price of Russian oil and oil products, and a smaller pool of buyers can also negotiate greater discounts. China’s imports of Russian oil in the first quarter of the year rose 38% compared with a year prior, according to Kpler data. As trade of Russian oil has become more complex, many Western shippers have pulled back.
London CNN —Europe’s air traffic control authority says it has been battling an ongoing attack, claimed by pro-Russian hackers, since Wednesday. There hasn’t been any impact on flights, though access to its website has been affected, according to the European Organization for the Safety of Air Navigation, or Eurocontrol. “There has been no impact on European aviation.”The International Air Transport Association also said air traffic was operating normally. “There has been no inconvenience to commercial air traffic, no disruption and no delays because of the cyberattack,” the industry group said. European countries have provided military assistance to Ukraine and imposed a raft of sanctions on Russia aimed at crippling its ability to wage war.
But for now, the price tag attached to the Dominion case isn’t the worst Fox chairman Rupert Murdoch has had to stomach. A phone hacking scandal involving Murdoch’s tabloid newspaper empire in the United Kingdom has proven much more costly over the past decade or so. It looked at legal fees and damages, as well as expenses tied to the subsequent restructuring of Murdoch’s UK media empire. The last big Murdoch legal fightThe editor of Murdoch’s News of the World and a private investigator were convicted of conspiracy to hack the voicemails of British royals in 2007. Britain’s Prince Harry and actor Hugh Grant are among those who have filed legal challenges against The Sun tied to phone hacking.
In a report Tuesday, credit rating agency Moody’s said 33 of the corporations it rates defaulted on their debts in the first quarter, the highest level since the last quarter of 2020 when 47 companies defaulted. Almost half, or 15 companies, defaulted last month — the highest monthly count since December 2020. In a sign of a tougher global environment for corporate borrowers, investors went sour on corporate bonds last year. Moody’s expects that a combination of higher borrowing costs and slowing global growth will push up defaults on speculative-grade corporate debt to 4.6% by the end of this year, up from 2.9% in March. By the end of the first quarter next year, the global default rate on this type of debt will likely rise to 4.9%, Moody’s said.
Why a European stock index is crushing its US peers
  + stars: | 2023-04-14 | by ( Julia Horowitz | )   time to read: +5 min
By comparison, the Dow Jones Industrial Average in the United States has climbed 2%. Those “growth” stocks gave investors a stake in firms that were on track to expand their businesses quickly and generate hefty returns. Now, investors are more drawn to “value” stocks: companies thought to be trading at a discount based on their financial performance. That’s been a “near-perfect combination” for European stocks to beat their US peers, he added. Economists at the Fed predict the United States will fall into a “mild” recession as a result of the recent banking crisis.
“Every one of these great bursts of euphoria, the great bubbles with overpriced markets … has been followed by a recession,” Grantham said. “When the great bubbles break, they do impose a lot of stress on the system,” Grantham said. What’s even more worrying is that this time, bubbles in the stock market and the real estate market are poised to burst simultaneously, Grantham said. The sector, which relies heavily on debt financing, has been hit hard by rising interest rates. Volcker raised interest rates to unprecedented levels to fight inflation in the late 1970s and early 1980s.
“Uncertainty is high, and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled,” the organization said in its latest report. Changing forecastsInvestors are looking for additional pockets of vulnerability in the financial sector. The “fog around the world economic outlook has thickened,” it said. Looking ahead to 2028, global growth is estimated at 3%, the lowest medium-term forecast since 1990. The body’s forecast for global growth this year is now closer to that from the World Bank.
Minneapolis CNN —US Treasury Secretary Janet Yellen said she believes the American economy remains strong and its banking system is resilient despite some recent turmoil among regional financial institutions. “I believe our banking system remains strong and resilient; it has solid capital and liquidity.”She added that the “US economy is obviously performing exceptionally well,” noting solid job creation, moderating inflation and robust consumer spending. “So I’m not anticipating a downturn in the economy, although of course that remains a risk,” she said. The global economy remains in a better place than many have expected, she said. “[During the G20 meeting in February], I said that the global economy was in a better place than many predicted last fall,” Yellen said.
While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out. More trouble for commercial real estateA few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry. In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.
The toll of the WFH eraCommercial real estate — offices, apartment complexes, warehouses and malls — has come under substantial pressure, my colleague Julia Horowitz reports. Commercial property valuations could fall by roughly 20% to 25% this year, according to Rich Hill, head of real estate strategy at Cohen & Steers. About $270 billion in commercial real estate loans held by banks will come due in 2023. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate, and high-profile defaults are making headlines. That might seem simplistic, but it’s especially relevant for an industry as uniquely reliant on trust as banking is.
“I’m more concerned than I’ve been in a long time,” said Matt Anderson, managing director at Trepp, which provides data on commercial real estate. About $270 billion in commercial real estate loans held by banks will come due in 2023, according to Trepp. Questions about the health of banks with sizable exposures to commercial real estate loans cause customers to pull deposits. That forces lenders to demand repayment — exacerbating the sector’s downturn and further damaging the banks’ financial position. The likeliest outcome is thought to be an uptick in defaults and reduced access to funding for the commercial real estate industry.
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