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☆ Gallup poll: Americans have low confidence in Biden, Powell and Yellen on the economy
▼ + stars: | 2023-05-09 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

Even with the unemployment rate tumbling to historic lows, nearly half (48%) of Americans say they have almost no confidence in Biden on the economy. Only 36% of Americans say they have confidence in Powell on the economy, a new low during Powell’s six-year tenure as Fed chief, while 28% say they have almost no confidence. The poll, taken April 3 to April 25, demonstrates how the anxiety caused by high inflation continues to overshadow the nation’s surprisingly strong job market. The economy added 253,000 jobs in April, dropping the unemployment rate to 3.4% — tied for the lowest since 1969. Gallup notes that confidence in leaders tends to rise and fall along with the fortunes of the economy.

☆ US Treasury Secretary calls CEOs and business leaders with warning on debt limit
▼ + stars: | 2023-05-09 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —US Treasury Secretary Janet Yellen has been calling CEOs and business leaders to discuss the consequences of brinkmanship around the debt ceiling, according to a source familiar with the matter. In a report published last week, White House economists said that a protracted default would wipe out more than 8 million jobs and cut the value of the stock market in half. The report estimated the impact under three scenarios: brinksmanship, a short default and a protracted default. A White House spokesperson said the protracted default scenario envisions a three-month long impasse. The White House has said it will not negotiate over the debt ceiling.

☆ What the April jobs report means for you, your employer, and the Fed
▼ + stars: | 2023-05-05 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

Minneapolis CNN —High prices, rising interest rates and banking uncertainty be damned: The US labor market is still chugging right along. “The American labor market right now is simply unstoppable,” RSM economist Joseph Brusuelas wrote in a note Friday. “This is what a soft landing would look like, with job growth gradually slowing to a more sustainable pace,” Faucher added. The milestone comes just three years after the Covid-19 pandemic caused mass layoffs that pushed the Black unemployment rate as high as 16.8%. “Make no mistake, the Black [unemployment] rate is still too high,” Shierholz tweeted.

☆ Nearly half of Americans are nervous about their money in the bank, Gallup survey finds
▼ + stars: | 2023-05-04 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

CNN —Nearly half of American adults say they are concerned about the safety of the money they keep in banks, according to a Gallup poll released on Thursday. Gallup said 48% of US adults say they are concerned about the money they have in banks and other financial institutions, including 19% who are “very” worried. Another 29% said they are “moderately” worried. Most Republicans (55%) and independents (51%) say they are at least “moderately” worried about their money in the bank, but just 36% of Democrats said so. The Gallup survey found that roughly half of Americans with an annual household income below $100,000 are worried, compared with 40% of those with higher income.

☆ Western Alliance denies ‘shameful’ report it’s the next bank for sale
▼ + stars: | 2023-05-04 | by ( Krystal Hur | ) edition.cnn.com time to read: +2 min

New York CNN —Western Alliance Bank denied reports that it’s exploring a sale or has hired an advisor to explore strategic options. Shares of the regional bank tumbled 36% Thursday, slightly paring back its losses after plunging over 50% at one point on reports that the company is the regional bank latest to explore a potential sale. The Financial Times, citing two anonymous sources, reported Thursday that the Arizona-based bank is exploring strategic options. “This story is absolutely false, there is no truth to this,” a Western Alliance spokesperson told CNN in an email. Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic option.

While a debt default doesn't mean all payments would stop, it could unleash economic and fiscal chaos around the world:Financial marketsAmericans' investments would take a direct hit. That's on top of the increased costs Americans are already facing from the Fed's rate hikes. That's because their costs of borrowing money will also rise, which limits the amount of money they can lend out. The economyA debt default could trigger an economic downturn, which would prompt a spike in unemployment. But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost and the unemployment rate would soar above 8%.

☆ White House warns debt default could wipe out 8 million jobs, plunge stock market
▼ + stars: | 2023-05-03 | by ( Matt Egan | ) edition.cnn.com time to read: +1 min

CNN —White House economists warned on Wednesday that a protracted debt default would cause the loss of more than 8 million jobs and cut the stock market in half. The new projections, published in a blog post by the White House Council of Economic Advisers, make clear the enormous stakes behind a potential breach of the debt ceiling. The report estimates the impact under three scenarios: brinksmanship, a short default and a protracted default. The White House economists say the worst-case scenario is a “protracted” default that wipes out 8.3 million jobs, plunges GDP by 6.1 percentage points and sends the stock market crashing nearly in half. That estimate is similar to one by Moody’s Analytics, which warned in March that a lengthy default could cost more than 7 million jobs.

☆ JPMorgan just got a lot bigger — and Elizabeth Warren is alarmed
▼ + stars: | 2023-05-02 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

Washington, DC CNN —JPMorgan Chase has once again come to the rescue of the banking system by acquiring a doomed bank. By blessing JPMorgan’s takeover of First Republic Bank, Warren fears federal regulators just made the” Too Big to Fail” problem even worse. My view on this is it’s important to look at the effect on competition and to try to keep a more diversified banking system,” Warren said. For his part, JPMorgan CEO Jamie Dimon is hopeful his bank’s takeover of First Republic eases the stress in the banking system. Clawing back banker payIn the wake of the bank failures, Warren is calling for accountability — both of bank executives and regulators.

☆ Sheila Bair to Jerome Powell: Stop trying to look so tough on inflation. It will backfire
▼ + stars: | 2023-05-02 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

The Fed’s war on inflation has piled pressure on the banking system, contributing to the significant stress on the banking system. “I would say hit pause,” Bair told CNN in a phone interview on Monday. I know they want to look tough, but at some point, they look weak,” Bair said. Bair argues the Fed needs “more thought” about the impact these monetary policy decisions are having on the stability of the banking system. “It sounds scary but in the context of the entire banking system, it’s not huge.

New York CNN —The collapse of First Republic Bank is unlikely to worsen the US economic outlook, JPMorgan CEO Jamie Dimon said Monday. Dimon told CNN’s Poppy Harlow early last month that the stress in the banking system had increased the odds of a US recession. The bank had $100 billion in those deposits withdrawn from the bank during the first quarter, it reported last week. “The American banking system is extraordinarily sound,” he said. But he agreed with Dimon that the seizure of First Republic, however, does not shift those forecasts, he told CNN Monday.

☆ Morgan Stanley plans to cut another 3,000 jobs, source says
▼ + stars: | 2023-05-01 | by ( Matt Egan | ) edition.cnn.com time to read: 1 min

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☆ Deal close for Washington Commanders football team
▼ + stars: | 2023-04-13 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

If finalized, the sale would mark the end of the controversial ownership of the Washington franchise by embattled billionaire Daniel Snyder. News of the near deal was first reported by Sportico, which reported the team sold for $6 billion, a record for a North American sports franchise. Snyder purchased the team, then named the Washington Redskins for a reported $750 million in 1999. It adopted the Commanders name last year, after playing two seasons with the name Washington Football Team. “Today marks the end of a long, difficult chapter for all employees and fans of the Washington football organization,” read a statement from Lisa Banks and Debra Katz, two attorneys representing more than 40 former Washington Commanders employees.

☆ Here's what's getting cheaper at the grocery store
▼ + stars: | 2023-04-12 | by ( Danielle Wiener-Bronner | ) edition.cnn.com time to read: +3 min

New York CNN —Grocery prices finally dipped in March, falling for the first time since September 2020, according to data released Wednesday by the Bureau of Labor Statistics. The meats, poultry, fish and eggs index fell 1.4%, pulled down by another month of large decreases in egg prices. In the year through March, grocery prices jumped 8.4%, outpacing overall inflation of 5%. Grocery prices finally fell in March. But more recently, egg prices have been coming down.

☆ In hard times, Corporate America looks out for its CEOs
▼ + stars: | 2023-04-06 | by ( Allison Morrow | ) edition.cnn.com time to read: +6 min

See here: Recent filings illustrate the way CEOs are still lavishly compensated even when massive screw-ups happen on their watch. A Southwest representative told CNN that the December cancellations did factor into the bonuses paid out to employees. The boards that make decisions on CEO pay are usually stacked with executives or former executives from other companies who benefit from the system. Often, CEOs of distressed companies — rather than seeing pay cut — receive so-called retention bonuses to encourage leaders not to flee the sinking ship. “When all the numbers are crunched, 2022 is going to be a flat year for CEO pay,” said Reda.

☆ ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default
▼ + stars: | 2023-03-31 | by ( Matt Egan | ) edition.cnn.com time to read: +6 min

As politicians sleepwalk toward a potential debt ceiling crisis, financial markets have begun pricing in a small — but growing — chance of a disastrous default. “The probability of default has gone up noticeably,” Andy Sparks, head of portfolio management research at MSCI, told CNN in an interview. Yellen has used unusually strong language for a former central banker to warn Congress against messing with the debt ceiling. Asked about MSCI’s estimate of a 2% implied probability of a default, Valliere said that number is low. But this is not a typical debt ceiling debate.”Fallback optionsThere are some early indicators of concern popping up in the bond market.

☆ Banking crisis won’t hurt America’s credit rating unless stress intensifies, Moody’s says
▼ + stars: | 2023-03-30 | by ( Matt Egan | ) edition.cnn.com time to read: +1 min

New York CNN —The banking crisis that caused US officials to launch emergency interventions is unlikely to have significant direct costs for the federal government, according to Moody’s Investors Service. The credit ratings firm said late Wednesday that at this stage, the biggest bank failures since 2008 are not expected to meaningfully hurt America’s credit profile. “In particular, we do not expect significant direct fiscal costs” from the current banking sector stress, Moody’s wrote in a report. However, Moody’s warned that an intensification of the banking crisis could be problematic. “A scenario of severe and prolonged stress, which is not our current baseline, could weaken economic and fiscal strength,” Moody’s said.

☆ Credit Suisse is still helping ultra-wealthy Americans evade taxes, Senate panel says
▼ + stars: | 2023-03-29 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

The Senate investigation also found that former senior bankers at Credit Suisse were involved in the management of these large and undeclared offshore accounts. In a statement to CNN on Wednesday, a Credit Suisse spokesperson said the bank does not tolerate tax evasion. Credit Suisse said its new leadership has cooperated with the Senate inquiry. In 2014, Credit Suisse pled guilty to federal charges that it illegally allowed some US clients evade their taxes for decades. The latest allegations come just days after Credit Suisse reached an emergency deal to be acquired by rival UBS.

☆ Magic Johnson and Josh Harris group officially place bid on Washington Commanders
▼ + stars: | 2023-03-28 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —A group led by billionaire Josh Harris and NBA legend Magic Johnson has officially placed a bid to buy the NFL’s Washington Commanders from embattled owner Daniel Snyder, a source told CNN on Tuesday. CNN confirmed last week that Johnson joined the Harris group. ESPN, which first reported news of the bid, reports that the Harris and Johnson-led group is offering to pay Snyder’s $6 billion asking price. A representative for Johnson, the Los Angeles Lakers hall of famer, did not immediately respond to a request for comment. Magic Johnson and Josh Harris have bid on the Washington Commanders.

☆ What to expect from the Senate hearings on recent bank failures
▼ + stars: | 2023-03-28 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +4 min

New York CNN —Silicon Valley Bank’s liquidity crisis and subsequent downfall sent waves of panic through the financial system in early March, setting off a chain reaction of chaos with which regional banks are still grappling. On Wednesday, the House Financial Services Committee will continue with their own line of questioning. Sen. Brown has called for the executives of Silicon Valley Bank to be held accountable for the bank’s failure. “Our banking system is sound and resilient, with strong capital and liquidity,” Barr said. The failures of SVB and Signature Bank, he wrote, “demonstrate the implications that banks with assets over $100 billion can have for financial stability.

☆ SVB failure is a ‘textbook case of mismanagement,’ top Fed regulator tells Congress
▼ + stars: | 2023-03-27 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

“SVB’s failure is a textbook case of mismanagement,” Barr says in testimony to be delivered before the Senate Banking Committee. “Our banking system is sound and resilient, with strong capital and liquidity,” Barr said. In his testimony, Barr discloses that near the end of 2021, bank supervisors found “deficiencies” in the bank’s liquidity risk management. That resulted in six supervisory findings linked to SVB’s liquidity stress testing, contingency funding and liquidity risk management. Barr said the Fed will weigh whether the applying those tougher rules to SVB would have helped the bank manage the risks that led to its failure.

☆ Fed official: People ‘hate’ inflation. That trumps bank stress and job loss
▼ + stars: | 2023-03-24 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN —The Federal Reserve faced a particularly vexing decision this week: Should it raise interest rates during a bank crisis? But the economic reports heading into this week’s Fed meeting suggest the economy remains too hot. The Fed ultimately reached a unanimous decision to raise interest rates for the ninth meeting in a row. “The one thing that I hear loud and clear from everybody is that they hate inflation. They find inflation to be unfair,” Barkin said, referring to talking to residents in his Fed district.

☆ Jamie Dimon and other big bank CEOs met with top Biden economist Lael Brainard
▼ + stars: | 2023-03-22 | by ( Matt Egan | ) edition.cnn.com time to read: 1 min

☆ Elizabeth Warren demands Fed crackdown on large regional banks
▼ + stars: | 2023-03-22 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

New York CNN —Senator Elizabeth Warren is cranking up the pressure on the Federal Reserve following the collapse of Silicon Valley Bank. Both Silicon Valley Bank and Signature Bank fit into that asset threshold when they failed earlier this month. The bipartisan 2018 rollback of Dodd-Frank freed large regional banks in that range of assets from the toughest oversight. Notably, the letter was signed by Senator Angus King, the Maine independent who voted in favor of the 2018 rollback. Days after the bank failures, the Federal Reserve launched a review of the regulation and oversight of Silicon Valley Bank.

☆ JPMorgan is advising First Republic on another potential lifeline, sources say
▼ + stars: | 2023-03-21 | by ( Matt Egan | ) edition.cnn.com time to read: 1 min

☆ From groceries to clothes, inflation-weary Americans flock to cheaper products online
▼ + stars: | 2023-03-21 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

Across 11 categories of e-commerce, high-priced goods have lost meaningful market share to low-cost ones, according to Adobe. As of the end of February this year, these pricier products make up just 7% of the market, according to Adobe. In online groceries, the most expensive tier of products has gone from 24.5% of the market in January 2019 to 9% now. The cheapest tier of online groceries has grown in market share by 13 percentage points to nearly half the market, Adobe said. The most expensive tier of online toys has gone from 25% of the market four years ago to 13% today.

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