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☆ Dogecoin jumps after Elon Musk replaces Twitter bird with Shiba Inu
▼ + stars: | 2023-04-03 | by ( Allison Morrow | ) edition.cnn.com time to read: 1 min

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☆ Why so many banks seem to fail on Fridays
▼ + stars: | 2023-03-31 | by ( Allison Morrow | ) edition.cnn.com time to read: +7 min

That’s because when banks fail, they have a tendency to do so on Friday. Friday, March 10, 2023: Silicon Valley Bank seized by regulators, the second biggest bank failure in US history. “That was very unusual.”Similarly, Silicon Valley Bank’s unraveling happened at a head-spinning pace nearly three weeks ago. Skinny cansAnyone else notice how skinny cans are these days? My colleague Nathaniel Meyersohn, a reporter with an eagle eye for retail trends, explains that skinny cans are, in fact, in.

☆ Sam Bankman-Fried pleads not guilty to new federal charges
▼ + stars: | 2023-03-30 | by ( Kara Scannell | ) edition.cnn.com time to read: +2 min

New York CNN —Sam Bankman-Fried, the founder of failed cryptocurrency trading platform FTX, pleaded not guilty to five new federal charges of fraud and conspiracy, including one count of conspiring to bribe Chinese government officials. An attorney for Bankman-Fried entered the plea on his behalf of his client, who was seated beside him in the New York courtroom Thursday. He previously pleaded not guilty to eight other charges stemming from what prosecutors have described as one of the biggest financial frauds in US history. In the latest indictment, prosecutors alleged that Bankman-Fried sought to pay off Chinese officials to unfreeze accounts belonging to his hedge fund, Alameda Research. Three of Bankman-Fried’s former business partners — Gary Wang, Caroline Ellison and Nishad Singh — have pleaded guilty to numerous charges and are cooperating with investigators.

A pedestrian walks past the Federal Reserve Headquarters on March 21 in Washington, DC. Daines also accused the Federal Reserve Bank of San Francisco of prioritizing addressing climate change over the risks presented by higher interest rates. In an interview with Montana Public Radio in 2014, Daines said that "the jury’s still out" on whether climate change is real. These responsibilities are tightly linked to our responsibilities for bank supervision. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

☆ FTX founder Sam Bankman-Fried tried to bribe Chinese officials, prosecutors say
▼ + stars: | 2023-03-28 | by ( Allison Morrow | ) edition.cnn.com time to read: 1 min

☆ Binance and its CEO sued by US regulators
▼ + stars: | 2023-03-27 | by ( Allison Morrow | ) edition.cnn.com time to read: 1 min

☆ Silicon Valley Bank red flags: Why did almost everyone fail to predict its collapse?
▼ + stars: | 2023-03-26 | by ( Allison Morrow | ) edition.cnn.com time to read: +8 min

A bank run took down Silicon Valley Bank on March 10, as depositors withdrew $42 billion in a single day. To embrace a uniquely Silicon Valley ethos that champions boldness, growth and disruption. Silicon Valley Bank held 55% of its customers' deposits in long-dated bonds whose value eroded as interest rates went up. Silicon Valley Bank held an unusually large proportion (55%) of its customers’ deposits in long-dated Treasuries. And for most of that year, Silicon Valley Bank was operating with a massive vacancy in its corporate leadership team: a chief risk officer.

☆ The TikTok hearing was an ugly political theater
▼ + stars: | 2023-03-23 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

New York CNN —Despite lacking evidence for their belief that TikTok is a spying tool for the Chinese Communist Party, US lawmakers from both parties on Thursday carried out an ugly political theater to advance that narrative. But — and I cannot stress this enough — the national security concerns are purely hypothetical. And against that tense (not to mention deeply xenophobic) backdrop, everyone in Washington is bolstering their “tough in China” credentials. “We see this handwringing about TikTok as a big distraction from the conversation that we really need to be having,” Greer said. “It’s a national embarrassment that we have no basic data privacy law in the United States.”Enjoying Nightcap?

☆ How the banking crisis clipped the Fed's wings
▼ + stars: | 2023-03-22 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

The message was clear: Buckle up, America — we are going to keep raising rates and get inflation down, come hell or high water. Silicon Valley Bank collapsed, followed by Signature Bank, stirring fears of a 2008-like financial calamity. “We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation,” Powell said. How’d Wall Street take the news? But the mood on Wall Street turned sour in response to both Powell’s comments and remarks from Treasury Secretary Janet Yellen, who was testifying before Congress at the same time.

☆ The bank panic is subsiding just in time for the Fed to
▼ + stars: | 2023-03-21 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

New York CNN —One week ago, right in this here newsletter, I wrote about how Wall Street was having a Zen moment. In the optimistic camp: “The bank crisis-ette is over,” Daniel Alpert, managing partner at Westwood Capital, told me. And it will be the first time the world hears from Fed officials since the collapse of Silicon Valley Bank, thanks to a cosmic twist of timing. But because of the banking turmoil, there is a chance the Fed would decide not to raise rates this time around. If the Fed feels the crisis has passed, Alpert said, it will be emboldened to go for the quarter-point hike.

☆ First Republic shares tumble to a new low
▼ + stars: | 2023-03-20 | by ( Allison Morrow | ) edition.cnn.com time to read: +2 min

Shares were halted several times for volatility, and they sank further after a report from the Wall Street Journal said rival banks led by JPMorgan (JPM) are trying to work on yet another rescue plan for First Republic. First Republic declined to comment on the report. Thursday’s government-arranged deal amounted to a big cash deposit that would allow First Republic to meet customers’ demands for withdrawals. What’s more, Thursday’s $30 billion infusion didn’t increase First Republic Bank’s capital — the safety cushion funds that banks use to absorb losses — “so that’s a separate weakness that we need to keep our eyes on,” said McCoy, who helped establish the Consumer Financial Protection Bureau. McCoy added that there’s “every reason to think that the capital has shrunk,” given First Republic’s heavy paper losses on its bond portfolio.

☆ How First Republic became such a hot mess
▼ + stars: | 2023-03-17 | by ( Allison Morrow | ) edition.cnn.com time to read: +2 min

“It’s the biggest example of a bank that could go down and shouldn’t go down — a first-class bank,” said a source close to the 48-hour deal to infuse First Republic with $30 billion in cash. San Francisco-based First Republic, the 14th-largest bank in the country, received the cash infusion from 11 rivals, including America’s largest lenders. When JPMorgan Chase CEO Jamie Dimon on Thursday reached out to Treasury Secretary Janet Yellen and Federal Reserve Board Chair Jerome Powell, “Very quickly the conversation turned to First Republic,” the source told CNN. Its rescuers are also struggling, with JPMorgan Chase (JPM) down 3% and Bank of America (BAC) falling 4%. Investors saw similarities between First Republic and the failed Silicon Valley Bank — another midsize Bay Area-based lender with a deep-pocketed client base.

New York CNN —First Republic Bank, facing a crisis of confidence from investors and customers, is actively discussing options for a lifeline — including a takeover, according to the Wall Street Journal. Participating in the discussions Thursday are massive Wall Street banks, including JPMorgan and Morgan Stanley, the Journal reported. Both Fitch Ratings and S&P Global Ratings downgraded First Republic Bank’s credit rating on Wednesday on concerns that depositors could pull their cash from the bank. Many regional banks, including First Republic, have large amounts of uninsured deposits above the $250,000 FDIC limit. To make money, banks use a portion of customers’ deposits to give out loans to other customers.

☆ Bank fears escalate as Wall Street wonders: Who’s next?
▼ + stars: | 2023-03-16 | by ( Allison Morrow | ) edition.cnn.com time to read: +3 min

Credit Suisse has been flailing for years, hurt by risk-management missteps that tarnished its reputation with clients and investors, and cost several top executives their jobs. The question on everyone’s mind is: What will happen to Credit Suisse, and who will be the next to fall? Fitch Ratings and S&P on Wednesday both downgraded the bank’s credit rating over concerns that depositors could pull their cash despite federal intervention. PacWest Bank (PACW) was down 12%, and shares of other regional banks fell again, too. Bottom line: Credit Suisse will probably need to be taken over (the most likely outcome, according to JPMorgan) or bailed out.

☆ How Credit Suisse and SVB are connected: Fear
▼ + stars: | 2023-03-15 | by ( Allison Morrow | ) edition.cnn.com time to read: +2 min

Credit Suisse shares crashed more than 20% in Zurich after the bank’s biggest shareholder chose not to increase its funding, dragging down European bank stocks along with it. Why are traders seeing a connection between the Credit Suisse turmoil and the collapse of two US banks last week? “Credit Suisse has been a slowing-moving car crash for years,” wrote Peter Boockvar, chief investment officer of Bleakley Financial Group. Customers withdrew billions from Credit Suisse last year, contributing to the bank’s biggest annual loss since the financial crisis in 2008. In short, the collapse of Silicon Valley Bank didn’t cause Credit Suisse to stumble, but it did put the embattled bank under even more intense scrutiny.

New York CNN —The banking meltdown over the past week has left us with more questions than answers. Here are five questions that experts answered Wednesday night. Former Treasury Secretary Larry Summers told CNN that despite scary headlines, now is not the time for consumers to panic. Some context: Those regulations passed in the wake of the Great Recession laid out stricter rules for the banking industry. Of course, others note that the risk of letting the 16th-largest US bank collapse, and potentially letting its tech industry customers also fail, could have far-reaching and potentially devastating consequences.

☆ Panic subsides on Wall Street as regional banks rebound
▼ + stars: | 2023-03-14 | by ( Allison Morrow | ) edition.cnn.com time to read: 1 min

New York CNN —This week, the go-to bank for US tech startups came rapidly unglued, leaving its high-powered customers and investors in limbo. Silicon Valley Bank, facing a sudden bank run and capital crisis, collapsed Friday morning and was taken over by federal regulators. Founded in 1983, SVB specialized in banking for tech startups. At the same time, venture capital began drying up, forcing startups to draw down funds held by SVB. By Friday morning, trading in SVB shares was halted and it had abandoned efforts to quickly raise capital or find a buyer.

☆ Bank run fear: SVB plunges again, leading to calls for a bailout
▼ + stars: | 2023-03-10 | by ( Allison Morrow | ) edition.cnn.com time to read: +2 min

Shares of SVB (SIVB) were halted Friday morning after falling more than 60% in premarket trading. SVB, a relatively unknown bank outside of Silicon Valley, lends to higher-risk tech startups that are struggling as interest rates rise and venture capital money dries up. Essentially dealing with a bank run, SVB told investors it had to sell a portfolio of US Treasuries and $1.75 billion in shares at a loss to cover rapidly declining customer deposits. Widespread contagion fears may have calmed slightly Friday: Although SVB brought down mainstream bank stocks right along with it Thursday, most other bank stocks stabilized. When interest rates were near zero, large banks scooped up Treasuries and bonds.

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.

☆ Crypto's go-to bank collapsed. What now?
▼ + stars: | 2023-03-09 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

New York CNN —Yesterday, the financial world witnessed a classic run on the bank when Silvergate Capital, the go-to US lender for crypto companies, said it would wind down its operations and voluntarily liquidate. ICYMI: Silvergate was, for most of its existence, a traditional Southern California regional bank. In the same period, the global crypto industry has lost two-thirds of its value, falling from a $3 trillion market cap to $1 trillion. I’ve heard the “don’t blame crypto” argument a thousand times. And it was the same story nearly a year ago, when the Terra/Luna crash last spring wiped out billions overnight — don’t blame crypto; those were toxic algorithmic stablecoins, you can’t trust those.

☆ Corporations are keeping food expensive because they can
▼ + stars: | 2023-03-08 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

To be sure, food manufacturers have to factor in costs of labor and transportation, which remain elevated compared with a few years ago. Anyway, it isn’t just food companies taking advantage of the inflationary moment. Many food companies are forecasting that they might slow down or pause price increases — but not lower them, Danielle explains. But [companies] have, I think, taken price increases that exceed that,” said Mark Lang, an associate professor of marketing at the University of Tampa who specializes in food marketing. Lower prices could, for example, make people think food quality has gone down — or make them think they were paying too much in the first place.

☆ Crypto-friendly lender Silvergate collapses
▼ + stars: | 2023-03-08 | by ( Allison Morrow | ) edition.cnn.com time to read: 1 min

☆ Premarket stocks: What you need to know about this earnings season
▼ + stars: | 2023-03-03 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN —About 99% of all S&P 500 companies have reported fourth quarter earnings and the results aren’t great. Companies listed in the S&P 500 index beat analysts’ earnings estimates by an average of just 1.3% last quarter. The market is “rewarding positive earnings surprises more than average and punishing negative earnings surprises much less than average for the fourth quarter,” reports FactSet. Inflation is (still) a big dealMore than 325 S&P 500 companies have cited the term “inflation” during their earnings calls for the fourth quarter. This marks the lowest number of S&P 500 companies using the “I”-word on their calls since the third quarter of 2021.

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