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☆ Who is Nouriel Roubini, Wall Street's 'Dr. Doom' economist who has warned of catastrophe for 2 decades?
▼ + stars: | 2023-04-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +6 min

Nouriel Roubini, the economist known as "Dr. Doom", has been warning of disaster for two decades. He rose to prominence after being among the commentators to call the 2008 financial crisis. When he spoke of an impending housing crash at the International Monetary Fund that year, the audience chuckled, the New York Times reported. Nouriel Roubini economics professor at New York University attends 48th edition of Economic Forum of Cernobbio on September 02, 2022 in Cernobbio, Italy. "Even a stopped clock is right twice a day," Anirvan Banerji, a critic of Roubini's told the New York Times in 2008.

☆ ChatGPT can't answer basic questions about markets and investing and it'll be a long time before its a useful tool for investors, DataTrek says
▼ + stars: | 2023-04-07 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

ChatGPT's market and investing knowledge is spotty, and the bot isn't a good tool for investors yet, DataTrek said. The firm asked the chatbot seven questions related to markets, and some of its answers were vague or incorrect. In a note on Friday, the research firm tested the capabilities of the trendy AI tool, asking it seven questions related to markets and investing. The chatbot refused to answer four questions, and it incorrectly or vaguely answered two other questions, the firm said. "Generative AI has a long way to go before proving useful in the financial services industry or as a tool for individual investors.

☆ US stocks edge higher as investor await important March jobs report
▼ + stars: | 2023-04-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks traded mixed on Thursday, ending a short week as investors looked to the key March jobs report. The market took stock of weakening jobs data this week in the form of private payrolls and jobless claims. The Fed has cited a tight labor market as a reason why rates may need to stay higher for longer. Investors took stock of payroll data from ADP, which showed 145,000 jobs added last month, below estimates of 210,000. A softening labor market is a signal the Federal Reserve is watching for to know if its year of interest rate hikes is being felt in the real economy.

☆ The US is pushing China to a 'red line' and companies that do business in the country need to come up with a 'plan B,' Yale economist says
▼ + stars: | 2023-04-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

US-China tensions are nearing a "red-line," according to Yale economist Stephen Roach. Roach said the US's support for Taiwan could spell trouble for firms that do big business in China. He warned of a potential conflict between the two nations, and said US firms need to come up with a "plan B." Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. "All multinationals who have made such a massive commitment to China want at least to begin to work hard on a plan B here," he added.

☆ Economist who called 2008 crisis says more bank collapses are coming
▼ + stars: | 2023-04-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

More bank failures are coming, according to top economist Raghuram Rajan. Rajan, who called the 2008 crisis, warned of more volatility stemming from the Fed's rate hikes. The bank's failure sparked a steep sell-off in regional bank stocks, leading some commentators to warn of a 1980s-style banking crisis. "This sense that the spillover effects of monetary policy are huge and aren't dealt with by ordinary supervision has just escaped our consciousness over the last so many years," Rajan said of central bank policy. But Fed Chair Powell has denied the possibility of a rate cut this year, warning markets that rates would continue remain restrictive through 2023.

☆ London's police force steps up crackdown on rogue officers
▼ + stars: | 2023-04-05 | by ( ) www.reuters.com time to read: +2 min

Last month, an independent review found the Metropolitan Police to be institutionally racist, misogynistic and homophobic, and unable to police itself. The review called for urgent reform of Britain's biggest force known as the Met. The Met's new chief Mark Rowley, who took over last September, has vowed to rid the force of unsuitable individuals among its more than 43,000 officers and staff. Further reviews are ongoing to assess the vetting of serving officers and all staff are being checked against the Police National Computer (PNC), which records convictions. Reporting by Farouq Suleiman and Sachin Ravikumar Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

☆ Dogecoin soars 20% after the token's Shiba Inu mascot replaces Twitter's bird logo
▼ + stars: | 2023-04-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Dogecoin jumped 20% on Monday after Twitter users noticed the token's Shiba Inu mascot on Twitter's website. Elon Musk, who's regularly pumped the meme coin, also brushed off a lawsuit related to the token. Musk's lawyers defended his "silly" tweets about the coin, asking a judge to toss a $258 billion suit. The jump occurred as Twitter users noticed Dogecoin's distinctive Shiba Inu logo had replaced the bird icon on Twitter's website, per Decrypt's report. The coin's valued peaked around $0.74 in mid-2021, but has since spiked periodically, often on comments from Musk.

☆ The new bull market in stocks has begun as history shows the bear narrative is coming apart, Fundstrat says
▼ + stars: | 2023-03-31 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The new bull market in stocks has begun, according to Fundstrat's Tom Lee. He's made the case for the S&P 500 to rally at least 20% this year, with a 4% gain coming in April. That's a strong signal that equities have entered a new bull market, Lee said, as stocks have historically never been in a secular bear market after two straight quarters of gains. Previously, he forecasted the S&P 500 would gain at least 20% in total this year. This only solidifies out view that 10/12/22 was the bear market low and we are 6 months into a bull market," Lee said in a note on Friday.

☆ Dow jumps 400 points to end tumultuous first quarter as markets move on from bank crisis
▼ + stars: | 2023-03-31 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks jumped on Friday, ending the first quarter on a positive note. A key price gauge showed continued signs that inflation is cooling off. The S&P 500 and Nasdaq have gained 6% and 17%, respectively, since the start of the year. The Personal Consumption Expenditures Index — the Fed's preferred inflation measure — rose 0.3% in February from the prior month, lower than the expected 0.4%. Then the failure of Silicon Valley Bank and fears of a recession on the horizon whipsawed markets again.

☆ Russia has continued to use Western insurance services to ship its oil despite sanctions
▼ + stars: | 2023-03-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Russia is still using western shipping and insurance services for around half of its oil trade, Bloomberg reported. That's despite recent sanctions, which prevent Russia from using western services unless crude is sold below $60 a barrel. Tankers that are not insured with western services could be insured by Russia itself, or unknown insurance firms, Bloomberg added. Russian energy execs have also warned of a more difficult year as sanctions continue to bite, particularly as the European Union mulls lowering the Russian oil price cap threshold. Russia will need to focus on developing its own shipping insurance providers or finding an alternative to western insurance, Russia's deputy prime minister Alexander Novak said on Tuesday.

☆ The bank failures have opened up Pandora's box, and the huge hole in banks' balance sheets isn't going away, strategist says
▼ + stars: | 2023-03-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The recent banking failures have opened up a Pandora's box, TD strategist Priya Misra warned. The gaping hole in banks' balance sheets will remain even as volatility fades, she said. "I think you opened a Pandora's box and massive unrealized losses sitting on banks' balance sheets," she said, adding that banks would likely need to sell their assets or raise capital. "The market will have to get used to a Fed that's not being responsive enough," Misra warned. Other Wall Street analysts have warned of a recession to strike this year, which could weigh heavily on stocks.

☆ Home prices will fall 15% over the next year as high interest rates squeeze the housing market, economist says
▼ + stars: | 2023-03-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Home prices are set to drop 15% over the next year, according to Pantheon Macroeconomics. That's because rates are likely to remain high, helping push down affordability and demand as a result. Some economists think a housing market recovery could be coming in 2024. US home prices have fallen amid higher mortgage rates over the last year, notching their seventh straight month of declines in January. Mortgage rates touched a 20-year-high in 2022 and have stayed elevated, crimping housing affordability and demand while putting downward pressure on prices.

☆ Tesla is poised to rally 13% this year as China deliveries pop after latest price cuts, Wedbush says
▼ + stars: | 2023-03-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Tesla stock is poised to gain 13% this year, as deliveries will surge on the latest price cuts. The EV maker slashed prices for its key models in China, which is expected to boost demand. Wedbush estimated deliveries would hit at least 420,000 this quarter, and reiterated its $225 price target for the stock. Tesla stock has soared 76% since the start of the year, a stark turnaround from its dismal performance in 2022. That led Wedbush to remove Tesla from its Best Ideas list in November, though it has been bullish on the EV maker this year.

☆ Bond markets are flashing a recession signal that suggests the Fed may be about to step in to quickly cut rates
▼ + stars: | 2023-03-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The bond market is flashing a recession signal that suggests the Fed will quickly cut rates. That's due to the large jump in short-term Treasuries, which the Fed has previously responded to by cutting rates. In all of these cases, the Fed moved quickly to cut interest rates – which suggests the signal's reappearance could be an omen for markets. "The default scenario baked into asset prices is based on the Fed pivoting - quickly - to lowering policy rates. Central bankers have raised interest rates aggressively over the past year to lower inflation, with the fed funds target rate at 4.75-5%, the highest rates have been since 2007.

☆ There's more economic pain coming as the SVB fallout is likely not contained, Mohamed El-Erian says
▼ + stars: | 2023-03-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

More economic pain is coming as the SVB fallout is likely not contained, Mohamed El-Erian said. Though policymakers have quelled financial contagion, economic contagion is still a risk, he warned. Other market commentators have also warned of more economic pain, as the outflow of deposits in recent weeks will make banks less willing to lend, leading to tighter credit conditions. It is also a reminder to markets not to allow the understandable focus on supersonic-speed financial contagion divert all the attention away from slower-moving economic contagion," El-Erian warned. Though El-Erian has said a recession isn't inevitable, other commentators have warned that a downturn is more likely.

☆ Here's why banking turmoil may not blow up into a financial crisis and stocks could still be set up for a bull market
▼ + stars: | 2023-03-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Turmoil gripping the banking sector may not expand into a full-blown financial crisis, Fundstrat said. "A fuller blown financial crisis is not inevitable," Fundstrat's Tom Lee said. That's lowered panic among bank customers and investors, spurring a small rebound in regional bank stocks this week. "There are signs that the crisis is not set to morph into a broader crisis." Morgan Stanley's chief stock strategist said US stocks could see near-term downside as the end of the bear market approaches.

☆ The latest US bank crisis is opening doors for China to assert global ascendancy, Yale economist says
▼ + stars: | 2023-03-27 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Volatility in the US banking system is an opportunity for China, Yale's Stephen Roach said. "A rising China is taking dead aim at crisis-prone America," Roach said. "A rising China could hardly ask for more." "That's precisely the point of the increasingly worrisome interplay between another US-made financial shock and a sharply escalating Sino-American cold war. A rising China is taking dead aim at crisis-prone America," Roach warned.

☆ US stocks trade mixed as bank fears ebb with sale of SVB assets to First Citizens
▼ + stars: | 2023-03-27 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks traded mixed on Monday as markets assessed the latest banking sector news. Reports over the weekend of further government support for banks sent shares higher on Monday. A Senate hearing on the collapse of Silicon Valley Bank is slated for this week. First Citizens will acquire $72 billion of Silicon Valley Bank's assets for a $16.5 billion discount. The news spurred a rebound in regional bank stocks, which have been under pressure since SVB imploded earlier this month.

☆ The downside risk to the stock market is the highest it's been in a year as earnings face pressure, Morgan Stanley's chief stock strategist says
▼ + stars: | 2023-03-27 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks are still set to see earnings pressure, and investors shouldn't be fooled by the tech rally, Morgan Stanley's Mike Wilson said. Previously, he predicted the worst earnings recession since 2008 to strike the market. In an interview with Bloomberg TV on Monday, Wilson pushed back against bullish market commentators who are championing the current rally in tech stocks. "The malinvestment was just so egregious and the overearning was even worse," he said of tech stocks' strong performance. Wilson has been bearish on stocks for months and previously sounded the alarm for the worst earnings recession since 2008 to hit the market.

☆ Recessions, bank failures, and stagnant stock returns - experts see a new, difficult era dawning for markets
▼ + stars: | 2023-03-25 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +6 min

Wall Street experts see a new era ahead for markets, marked by a more difficult investing environment. Central bankers have already raised interest rates over 1,700% over the last year to quell high prices. Despite the volatility in bank stocks, Fed officials raised interest rates another 25 basis-points this week, bringing the effective Fed funds rate to 4.75-5%. That's the highest interest rates have been since 2007, and the impact of SVB's collapse is likely equivalent to another 50-75 basis points in rate hikes, Moody's chief economist Mark Zandi estimated, meaning real interest rates are even more restrictive. Some experts have argued that SVB's collapse was due to the bank's uniquely high exposure to bonds, which have been weighed down heavily by rising interest rates.

☆ A TikTok ban is inevitable and that spells trouble for US stocks, Gene Munster says
▼ + stars: | 2023-03-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

A TikTok ban is bound to happen eventually, according to Deepwater's Gene Munster. A ban could spell trouble for US stocks with business in China, which might retaliate. Munster predicted the Biden administration could allow TikTok to stay this year, in order to quell escalating tensions between the US and China. And while a TikTok ban initially seems like a positive for US rivals like Meta's Reels, the House committee showed a large concern over the app's addictiveness and its consequences on teen mental health. "When TikTok gets banned I think Meta will come back into the spotlight and have to answer the same questions that TikTok was asked."

☆ The Fed is putting the economy in jeopardy by not prioritizing the stability of the banking system, Moody's chief economist says
▼ + stars: | 2023-03-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The Fed is putting the economy at risk by not prioritizing bank stability, Moody's Mark Zandi said. I think that's a pretty significant increase in interest rates, and I do think that puts the economy in jeopardy," Zandi warned. The fed funds rate is now officially targeted between 4.75-5%, after central bankers had already hiked rates 1,700% over the last year in order to control inflation. Market commentators like Paul Krugman and Bill Ackman had urged the Fed to pause or pull back its rate hiking regime altogether as worries about the banking system have spiraled. "The first priority has got to be the stability of the banking system, and of course they did not do that, and I do think they're running a risk here," he said.

☆ The economy is headed into a 'Bermuda Triangle' of risk that will bring on a crisis to rival 2008, 'Dr. Doom' economist Nouriel Roubini says
▼ + stars: | 2023-03-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The economy is headed into a "Bermuda Triangle" of risk, economist Nouriel Roubini warned. He sounded the alarm for a stagflationary debt crisis and a severe recession to hit the US. Second, high interest rates means firms are battling higher costs of borrowing and waning liquidity, which weighs on asset prices. Finally, high interest rates are pressuring the mountain of debt, both private and public, that was amassed during the years of low rates, Roubini said. And when many of them are having these problems, then you have a systemic household debt crisis like [2008]," he warned.

☆ Billionaire investor Leon Cooperman says the US is going through a 'textbook' financial crisis and the S&P 500 won't hit a new high for a long time
▼ + stars: | 2023-03-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US is going through a "textbook" financial crisis, according to billionaire Leon Cooperman. That means poor returns for stocks, he added, warning the S&P 500 wouldn't hit a high again for a long time. Cooperman has warned markets of an coming recession, and said stocks could plunge 20% this year. "It's kind of like textbook," Cooperman said. Those conditions also mean tepid returns for stocks, Cooperman said.

☆ The Fed spotted red flags at Silicon Valley Bank years before it collapsed, report says
▼ + stars: | 2023-03-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Fed officials saw issues with Silicon Valley Bank years before it collapsed, according to a NYT report. Officials first identified red flags in a 2021 review of SVB, a familiar source told the NYT. The NYT reported that Fed officials found issues with the now-failed bank after a review in 2021. Despite that, the issues went unaddressed at the bank, leading to a more thorough Fed review in July 2022. The Fed has said it will investigate its supervision of SVB and will report its findings on May 1.

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