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☆ Morning Bid: Bank stress, bond volatility and disinflation
▼ + stars: | 2023-03-14 | by ( ) www.reuters.com time to read: +5 min

But the implications of this sudden bout of financial instability - and its potential economic and policy fallout - were most clearly seen in the interest rate and bond markets. Implied terminal rates for the European Central Bank and Bank of England have been dramatically scaled back too - though one or two further hikes are still priced for those central banks. But the Fed rethink has led to seismic action on the U.S. Treasury market, with the biggest drop in 2-year Treasury yields on Monday since the stock market crash of 1987. Credit spreads in the corporate bond markets have also widened sharply as investors fear an economy-wide tightening of borrowing standards and financial conditions. It would certainly think twice about tightening policy again into this level of financial stress and bond market upheaval.

☆ SVB collapse was driven by ‘the first Twitter fueled bank run’
▼ + stars: | 2023-03-14 | by ( Jennifer Korn | ) edition.cnn.com time to read: +4 min

New York CNN —The massive amount of customer withdrawals that led to the collapse of Silicon Valley Bank had all the hallmarks of an old-fashioned bank run, but with a new twist befitting the primary industry the bank served: much of it unfolded online. Customers withdrew $42 billion in a single day last week from Silicon Valley Bank, leaving the bank with $1 billion in negative cash balance, the company said in a regulatory filing. “It was the speed, fueled by zero distribution costs for both rumors and withdrawals, that was so destabilizing.”Silicon Valley Bank was arguably uniquely susceptible to those factors given its tech-focused customer base. The next day, the US Federal Deposit Insurance Corporation stepped in and took control of the bank, which only added to the viral panic on Twitter. “THAT IS THE PROPER REACTION.”Hours later, the Biden administration stepped in and guaranteed the bank’s customers would have access to all their money starting Monday.

☆ The Fed's been aggressively hiking rates over the past year. The banking crisis could force them to halt the hikes — or even cut them, analysts say.
▼ + stars: | 2023-03-14 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Nomura economists expect the Fed to cut interest rates by 0.25 percentage points next week. That's because bond prices and yields have an inverse relation, so when interest rates drop, prices bond prices tend to go up, which could alleviate losses. The Fed hiked interest rates eight times over the past year to its targeted levels of 4.5% to 4.75% now. On Sunday, investment banking giant Goldman Sachs said it doesn't expect the Fed to hike interest rates at its next meeting. The investment banking giant was previously expecting the US central bank to hike the rate by 0.25 percentage points.

☆ Premarket stocks: What comes next in the banking crisis? The early 1990s hold clues
▼ + stars: | 2023-03-14 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

This isn’t 2008: There are some key differences between today’s banking saga and what happened in 2008. This time around the US federal government stepped in early to guarantee all customer deposits and restore confidence in the US banking system. Here comes CPIFormer banking regulators, economists and Wall Street analysts are increasingly calling for the Federal Reserve to pause its inflation-fighting interest rate hikes because of the current banking sector chaos. Last Wednesday, investors were putting 70% odds of a half-point interest rate hike at the Federal Reserve policy meeting next week, according to the CME FedWatch tool. Analysts expect the inflation rate to come in at 6% year-over-year (down from 6.4% in January) and at 0.4% month-over-month (down from 0.5% in January).

☆ SVB fallout: Is my money safe?
▼ + stars: | 2023-03-13 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +6 min

New York CNN —The question on so many bank customers’ minds in the aftermath of Silicon Valley Bank’s stunning collapse: Is my money safe? US customers held at least $151.5 billion in uninsured deposits by the end of 2022, SVB’s latest annual report said. But before markets opened this week, the Biden administration took an extraordinary step, guaranteeing that SVB customers will have access to all their money starting Monday, even uninsured deposits. Many SVB customers had much more than $250,000 deposited and now that they can’t get their money, some companies are struggling to make payroll. “I don’t think people should panic, but it’s just prudent to have insured deposits versus uninsured deposits,” Hatfield said.

☆ US futures and Asia Pacific stocks react to SVB recovery efforts
▼ + stars: | 2023-03-13 | by ( Michelle Toh | ) edition.cnn.com time to read: +4 min

On Sunday, the Biden administration promised that customers of the failed Silicon Valley Bank (SVB) and Signature Bank would have access to all their money starting Monday. In a joint statement, US Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg said the FDIC will make SVB and Signature Bank’s customers whole. In a related action, the government shut down Signature Bank, a regional bank that was teetering on the brink of collapse in recent days. “Cross-asset traders of all stripes are heaving a sigh of relief as bank runs have a tendency to catch on globally,” he told CNN. Bank shares in Asia were under pressure Monday, following a heavy rout for their US and European counterparts late last week.

☆ Why Silicon Valley Bank collapsed and what it could mean
▼ + stars: | 2023-03-13 | by ( Hanna Ziady | ) edition.cnn.com time to read: +7 min

London CNN —Silicon Valley Bank collapsed with astounding speed on Friday. A Brinks armored truck sits parked in front of the shuttered Silicon Valley Bank headquarters on March 10, 2023 in Santa Clara, California, United States. Established in 1983, Silicon Valley Bank was, just before collapsing, America’s 16th largest commercial bank. Like many other banks, SVB ploughed billions into US government bonds during the era of near-zero interest rates. By Friday morning, trading in SVB shares was halted and it had abandoned efforts to raise capital or find a buyer.

☆ SVB employees to receive 45 days of employment at 1.5 times pay, reports say
▼ + stars: | 2023-03-12 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +2 min

New York CNN —The US Federal Deposit Insurance Corporation offered Silicon Valley Bank employees 45 days of employment and 1.5 times their salary, reports say. US workers also received their annual bonuses on Friday, just hours before FDIC took over the collapsed lender, Axios reported. It said it would pay uninsured depositors an “advance dividend within the next week.”The FDIC took over in the midmorning Friday; usually it waits until markets close. “SVB’s condition deteriorated so quickly that it couldn’t last just five more hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”

☆ Takeaways from America’s second-largest bank failure
▼ + stars: | 2023-03-11 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +7 min

New York CNN —Silicon Valley Bank’s 48-hour collapse led to the second-largest failure of a financial institution in US history. Its stunning, and seemingly rapid, fall is the largest shutdown of a US bank since Washington Mutual in 2008. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”High interest rates led to its demiseTo combat rampant inflation, the central bank has been aggressively raising interest rates since 2022. When interest rates were near historical lows, the banks bought up on long-dated, seemingly low-risk Treasuries. Faced with these higher interest rates, loss of IPOs and a funding drought, SVB’s clients began pulling money out of the bank.

☆ Use code ‘Bankrun’: Camp toy store pleads for help after Silicon Valley Bank collapse
▼ + stars: | 2023-03-10 | by ( Nathaniel Meyersohn | ) edition.cnn.com time to read: +2 min

New York CNN —A toy company based in New York has gotten caught up in the collapse of Silicon Valley Bank and is pleading with customers for help keeping it afloat. He urged customers to use the code “BANKRUN” to save 40% off all merchandise, in an apparent nod to the run on the bank that may have helped bring down the Silicon Valley lender. Kaufman said the company was “hopeful that this will be resolved soon.”CNN has not confirmed if Camp had funds with Silicon Valley Bank when the bank collapsed. Silicon Valley Bank was put under control of the US Federal Deposit Insurance Corporation on Friday, capping off a stunning 48 hour period during which fears of a liquidity crisis at the firm prompted some startups to weigh withdrawing funds. The rapidly unfolding fallout at Silicon Valley Bank comes at a challenging moment for startup and tech industries.

London CNN —The failure of Silicon Valley Bank is rattling markets and raising uncomfortable questions: Will it undermine the broader banking system and start a new meltdown? A crucial lender to US technology startups, the bank came under pressure as Silicon Valley funding dried up, the result of an economic slowdown and rapidly rising interest rates. Bank stocks rattledFounded in 1983, SVB provided financing for almost half of US venture-backed technology and health care companies. SVB put the bonds up for sale as customers, facing leaner times, pulled their money from the bank. Silicon Valley Bank had about $209 billion in total assets and $175 billion in total deposits as of the end of last year, according to the FDIC.

☆ Silicon Valley Bank collapse sends tech industry into a panic
▼ + stars: | 2023-03-10 | by ( Catherine Thorbecke | ) edition.cnn.com time to read: +5 min

Following the bank’s collapse on Friday, uncertainty in the startup community only grew. Founders Fund, an influential venture capital firm founded by billionaire Peter Thiel, reportedly advised its portfolio companies to pull money from the bank. “SVB is the most important capital provider to tech startups and the biggest supporter of the community,” he said in a tweet. “Now is the time to support them.”The rapidly unfolding fallout at Silicon Valley Bank comes at a challenging moment for the tech industry. Now, the bank’s collapse risks compounding the industry’s cash crunch and broader turbulence.

☆ Premarket stocks: Jerome Powell's testimony sent markets reeling. That may be a good thing
▼ + stars: | 2023-03-08 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN —Federal Reserve Chairman Jerome Powell on Tuesday cleared the way for larger interest rate hikes at this month’s central bank policy meeting, sending markets into a tailspin. The S&P 500 fell 1.5%, the Dow dropped 575 points, or 1.7%, and the tech-heavy Nasdaq composite ended 1.3% lower. After Powell’s testimony, market expectations for a half-percentage point rate hike spiked. If inflation fails to continue falling, he said, the Fed will keep trying to cool things down by raising rates. Even if Powell was sure that January’s economic data was a fluke, he still wants to maintain the Fed’s credibility.

☆ NSA chief worries TikTok could censor videos for 'large population of listeners' as part of Chinese influence operations
▼ + stars: | 2023-03-07 | by ( Sean Lyngaas | ) edition.cnn.com time to read: +3 min

TikTok’s collection of data and its control over the algorithm that serves user content are also concerning, Nakasone said. US officials have for years accused TikTok – and its Chinese parent firm ByteDance – of collecting data that could enable surveillance by the Chinese government. A TikTok spokesperson said that the company has been working with the US government to address national security concerns. We will continue to do our part to deliver a comprehensive national security plan for the American people,” Brooke Oberwetter from TikTok said in statement. “I characterize it much more as a loaded gun.”“I would not expect individualized targeting through [TikTok] to do malicious things,” Joyce said.

☆ The world's ultra-rich lost about $14 trillion of their wealth in 2022, Knight Frank study shows
▼ + stars: | 2023-03-01 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

The world's ultra-rich lost 13.6%, or $13.8 trillion, of their wealth in 2022, per a Knight Frank report. Just four in 10 ultra-wealthy people saw their wealth rise in 2022, the report says. Just four in 10 ultra-wealthy people saw a boost to their wealth in 2022, but the "overwhelming trend" was negative, Knight Frank said in the report. In 2022, the ultra-rich in Europe experienced the largest decline in wealth with a drop of 17%, followed by Australiasia with 11%, and the Americas by 10%, according to Knight Frank. According to Knight Frank, the ultra-rich parked 32% of their total wealth in their residential properties.

☆ Canada bans TikTok on government devices
▼ + stars: | 2023-02-27 | by ( Brian Fung | ) edition.cnn.com time to read: +2 min

Washington CNN —The Canadian government is banning TikTok from official electronic devices, making it the latest to announce restrictions on the short-form video app in light of cybersecurity concerns. Government-issued devices will be blocked from downloading TikTok, and existing installations of the app will be removed, according to a statement by the Treasury Board of Canada Secretariat. “Following a review of TikTok, the Chief Information Officer of Canada determined that it presents an unacceptable level of risk to privacy and security,” the statement said. In a statement responding to the ban, TikTok said it was “curious” that Canada had announced the move “only after similar bans” in the EU and the United States, and without contacting TikTok about the concerns. “While the risks of using this application are clear, we have no evidence at this point that government information has been compromised,” the statement said.

☆ The next bull market in stocks won't kick off until the Fed is forced to bail out the US government, Bank of America says
▼ + stars: | 2023-02-24 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The next bull market in stocks won't happen until the Federal Reserve cuts interest rates to bail out the US government, according to Bank of America. BofA said that high rates will result in a staggering increase in interest payments on America's $31 trillion debt. The bank said US government debt is expected to soar by more than $21 trillion over the next 10 years. That's $5.2 billion every single day, or $218 million every single hour, Bank of America's Michael Hartnett said in a Friday note. "And that's when the next great bull market in risk begins," Hartnett said.

Washington/London CNN —The European Commission has banned TikTok from official devices because of concerns about cybersecurity, a move sharply criticized by the company in its latest run-in with Western governments over how it handles user data. Commission staff have until March 15 to delete the short-form video app, owned by China’s ByteDance, from work devices and any personal devices that use Commission apps and services. Based in Brussels, the European Commission is the executive arm of the European Union, responsible for proposing and enforcing legislation and implementing the EU budget. “This measure aims to protect the Commission against cybersecurity threats and actions which may be exploited for cyberattacks against the corporate environment of the Commission,” the Commission said in a statement Thursday. Previously, TikTok has disclosed to European users that China-based employees may access EU users’ data.

☆ Why a small-business owner is waging an expensive battle for its name against Oura, the $2.5 billion health-tech company
▼ + stars: | 2023-02-23 | by ( Jennifer Ortakales Dawkins | ) www.businessinsider.com time to read: +5 min

Oura Inc. and Oura Health are in a legal battle over their names. Last March, Oura Health filed a petition with the Trademark Trial and Appeal Board to cancel Oura Inc.'s trademark, claiming that the trademark could dilute Oura Health's brand and confuse consumers. If Oura Health prevails, Oura Inc. could lose its federal trademark, which would make it difficult to continue running the business without changing its name. Oura Health told Insider that both companies operate in the health and wellness industry, thus creating confusion. A representative for Oura Health said in a statement: "We first used our Oura mark long before Oura Inc. or Ouragin, Inc. were formed.

☆ Premarket stocks: Big Retail's cautious forecasts are spooking Wall Street
▼ + stars: | 2023-02-22 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

New York CNN —Forecasts from Walmart and Home Depot made for a grim day of trading on Tuesday. The mega retailers’ predictions of a weakening economy and a dip in consumer spending this year sent markets tumbling as Wall Street seemed to realize that the Federal Reserve’s campaign to quell inflation could yet lead to recession. What’s happening: We’ve written about the remarkable strength of the US consumer quite a bit here at Before the Bell. Consumer spending accounts for about 70% of America’s gross domestic product, the broadest measure of the US economy, so it’s nearly impossible for the economy to enter a recession as long as consumer spending is growing. American shoppers have almost single-handedly kept the US economy afloat by continuing to shell out cash for purchases despite stubbornly high inflation.

Reuters/Mike SegarFeb 21 (Reuters) - A daughter of Malcolm X, the civil rights activist assassinated 58 years ago to the day on Tuesday, has filed notices that she intends to sue the FBI, the CIA, New York City police and others for his death. Ilyasah Shabazz accused various federal and New York government agencies of fraudulently concealing evidence that they "conspired to and executed their plan to assassinate Malcolm X." "For years, our family has fought for the truth to come to light concerning his murder," Shabazz said at a news conference at the site of her father's assassination, now a memorial to Malcolm X. Malcolm X rose to prominence as the national spokesman of the Nation of Islam, an African-American Muslim group that espoused Black separatism. Soon after, some associates of Malcolm X said they believed various government agencies were aware of the assassination plan and allowed to it happen.

☆ How Putin's Russian goon squad used Mexican gig workers to troll an American election
▼ + stars: | 2023-02-18 | by ( Mattathias Schwartz | ) www.businessinsider.com time to read: +25 min

Posting to social media sounded like an easy work-from-home gig, so he applied. This post from the Prigozhin-backed Social CMS network in Mexico referred to America as "we." He verified his account by providing chat transcripts, screenshots, contracts, and internal company documents. But just because Social CMS didn't yield an immediate, large-scale impact doesn't mean it should be ignored. "I didn't know who are you," wrote the person who is listed in the corporate directory as Prigozhin's media liaison.

☆ FTSE100 stocks have been shunned for years. Now investors love them
▼ + stars: | 2023-02-17 | by ( Anna Cooban | ) edition.cnn.com time to read: +6 min

Both US indexes have recovered slightly following last year’s big falls, but one of the biggest drags on their performance — high interest rates — is likely to stick around. That’s because, when interest rates are low, the yields on government bonds are also low. That boosts investors’ appetite for riskier investments, such as the stocks of small or highly indebted tech companies that could make blockbuster returns years down the line. BP (BP) and Shell (SHLX), both FTSE companies, more than doubled their annual profits last year to a combined $68 billion. But the lack of tech companies may come back to haunt the FTSE, once inflation and interest rates fall back.

☆ Why now may be a good time to buy a used Rolex — if you plan to keep it
▼ + stars: | 2023-02-17 | by ( Dominick Reuter | ) www.businessinsider.com time to read: +4 min

Prices for pre-owned Rolex watches have been on the slide for almost a year after posting record highs. The biggest reason for the price decline, analysts say, was a surge of additional watches to the market. Watch prices quickly followed suit, entering a months-long decline that is only now beginning to show signs of leveling off. But the tumbling price of used luxury watches like Rolex, Audemars Piguet, and Patek Philippe can also be explained by a simple economics principle: supply arriving to meet demand. "The price correction was mainly driven by the increase in supply," wrote Morgan Stanley equity analyst Edouard Aubin and colleagues.

☆ FBI investigates hack of its own computer network
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +1 min

Feb 17 (Reuters) - The FBI is investigating a hack of its computer network, in an isolated incident that was now contained, the agency said on Friday. "The FBI is aware of the incident and is working to gain additional information," the agency said in an emailed statement to Reuters, without providing further details. CNN, which first reported the incident citing people briefed on the matter, said FBI officials believe it involved computers at its New York office which were used to investigate child sexual exploitation. The FBI breach is the latest in a series of high-profile U.S. government hacking incidents over the last decade. The OPM breach was later attributed to Chinese hackers.

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