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☆ FTX money trails leading to politicians, media, and other crypto exchanges point to the deep influence of Sam Bankman-Fried
▼ + stars: | 2023-01-19 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Here's what Bankman-Fried seemed to be aiming at: Stash money with all the right people, while lobbying for policy favorable to FTX. As CoinDesk reported this week, 37% of Congress took money from Bankman-Fried and other FTX executives. House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer were among the 196 senators and representatives that received funds. Other lawmakers included some who were just sworn into congressional ranks this month, which points to Bankman-Fried possibly seeking to hold sway over new members. GOLDMAN SACHS stock price on Jan. 19, 2023 Markets Insider10.

☆ Larry Summers is warming up to the idea that the Federal Reserve can stick a soft landing after previously warning a hard recession is imminent
▼ + stars: | 2023-01-18 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Larry Summers is growing more optimistic about the US economy as inflation starts to ease. Summers had previously said that a recession was imminent because job losses would be necessary to tame inflation. "We need two years of 7.5% unemployment, or five years of 6% unemployment, or one year of 10% unemployment" to tame inflation, Summers said last year. But inflation has been easing month after month even as the unemployment rate has held steady at about 3.5%. Even though the Fed might manage to stick a soft landing in the economy, that doesn't mean Summers is bulled up on stocks.

☆ Premarket stocks: Bonds are back, but for how long?
▼ + stars: | 2023-01-09 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

New York CNN —Stocks soared on Friday to their best day in more than a month. But the big turnaround story during the short first week of the year isn’t just about equities, it’s also about bonds. Bonds are particularly sensitive to those increases — as rates are hiked, the price of existing bonds falls as investors prefer the new debt that will soon be issued with those higher interest payouts. This time around, investors are scooping up bonds as they anticipate the pace of Fed interest rate hikes will soon ease. Core bonds, or US investment grade debt, tend to perform well during Fed rate hike pauses.

☆ Markets are wrong to think things will return to normal and should brace for an era of tumult, debt, and high interest rates, former Treasury Secretary Larry Summers says
▼ + stars: | 2023-01-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets are wrong to think things will return to normal this year, former Treasury Secretary Larry Summers said. He warned investors to brace for a new period of debt, tumult, and volatile interest rates. Central bankers hiked interest rates an aggressive 425-basis-points to tackle sky-high inflation, driving stocks to a 20% loss for their worst performance since the 2008 recession. Markets may also be wrong to think a return-to-normal is possible after this inflationary shock, Summers said, as the era of ultra-low interest rates and steady economic growth is now in the past. Summers believed the new era would also be defined by higher debt levels due to higher national spending, as well as higher investment demand.

☆ Joe Biden's biggest successes and failures in his second year in office
▼ + stars: | 2022-12-31 | by ( Nicole Gaudiano | Brent D. Griffiths | ) www.businessinsider.com time to read: +15 min

His second year in office was marked by historic legislative achievements despite Democrats' razor-thin majority in Congress. Here are some of the highs and lows from Biden's second year:Success: UkrainePresident Joe Biden talks with Ukrainian President Volodymyr Zelenskyy outside the White House. Conservative New York Times columnist Bret Stephens in September called the "staggering gains" by Ukrainian forces "a victory for Joe Biden, too." Universal pre-K was included in a sweeping spending plan passed by House Democrats until their Senate colleagues cut that out too. Failure: InflationPresident Joe Biden arrives for an event focused on inflation and the supply chain at the Port of Los Angeles in June.

☆ Americans still haven't felt the worst of the war on inflation, meaning 2023 will be 'survival of the fittest'
▼ + stars: | 2022-12-29 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +8 min

The Federal Reserve hiked interest rates seven times during 2022 to fight inflation. He believes the new year will bring a whole host of different challenges for small businesses. "I believe that we're going to see small businesses dropping like flies, and competition thinning out among the pandemic entrepreneurs," Gray said. With nearly half of Americans employed by small businesses, financial hardship to the sector could significantly impact the overall workforce. "Just since June, the rates have gone up almost 3% so capital is getting a lot more expensive for small businesses generally," Wallace told Insider.

☆ Fed rate hike pushes small business loan interest over 10% for first time in nearly a generation
▼ + stars: | 2022-12-14 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +8 min

Many business owners have never seen double-digits," said Rohit Arora, co-founder and CEO of small business lending platform Biz2Credit. Almost a quarter of small business owners said they are paying a higher rate on their most recent loan, and the highest since 2008. The latest CNBC Fed Survey shows the market forecasting a peak Fed rate around 5% in March 2023 and the rate being held there for nine months. "Talking to small business owners looking for financing, it's starting to slow things down," Hurn said. Small business loan approval percentages at big banks dropped in November to the second lowest total in 2022 (14.6%), according to the latest Biz2Credit Small Business Lending Index released this week; and also dropped at small banks (21.1%).

☆ Wall Street's top commentators are torn on what the Federal Reserve will do next. Here's what to know.
▼ + stars: | 2022-12-06 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Traders are largely expecting policymakers to make a 50-basis-point rate hike, a smaller move than the previous four 75-basis-point increases. But next week's adjustment isn't what's top of mind for Wall Street's top Fed commentators — they're looking ahead to next year. To Bridgewater chief investment officer, Rebecca Patterson, the Fed would be justified in surprising markets by holding rates higher for longer. Sustained elevated rates are going to usher in dramatic changes to the economic landscape — and former Treasury Secretary Larry Summers agrees. The price cap on Russian oil is "immaterial" and won't make a significant difference on market pricing, according to Vanda Insights.

☆ Dow tumbles 483 points as economic data strengthens the case for more Fed hawkishness
▼ + stars: | 2022-12-05 | by ( Max Adams | ) www.businessinsider.com time to read: +2 min

The Dow more than 500 points as traders flinched at new data that made a case for the Fed to stay hawkish. ISM services sector data for November turned higher, and factory orders increased in October. Survey data from the Institution of Supply Management showed that services sector activity picked up last month, with a reading of 56.5, up from 54.4 in October. Meanwhile, data from the Commerce Department showed that factory orders were up 1% in October, beating expectations for an increase of 0.7%. Here's where US indexes stood after the 4 p.m. closing bell on Monday:Here's what else happened today:In commodities, bonds, and crypto:

☆ The bubble in predicting the end of the world
▼ + stars: | 2022-12-01 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

Former U.S. Treasury Secretary Larry Summers says the world faces the “most complex, disparate and cross-cutting set of challenges” he’s ever encountered. In his wittily titled “The End of the World is Just the Beginning”, the geopolitical strategist suggests that a number of countries from Germany to China face insuperable demographic challenges. The threat to America’s global hegemony from China is the subject of Ray Dalio’s “The Changing World Order”. The U.S. stock market bubble has only partially deflated, bond yields around the world trail below inflation, and global property markets are exposed to rising interest rates. The Assyrian who forecast the world would end in 2800 BC was wrong.

☆ The economy is already in a 'rolling recession', and that could set stocks up for a better 2023, Charles Schwab investment chief says
▼ + stars: | 2022-11-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US is already in a "rolling recession," according to Charles Schwab's Liz Ann Sonders. Sonders said that could soon weigh on corporate earnings, with more downside possible for stocks. "We're already in a version of recession, we've been talking about it in the context of a rolling recession. A rolling recession means those losses could soon spread to corporate earnings, Sonders said, which would likely hit the stock market sector by sector rather than crashing all at once. If a recession is mild and the job market holds up, that could mean a better environment for stocks in the second half of 2023.

☆ FTX's bankruptcy hearing is underway and the details are wild. Here's what to know.
▼ + stars: | 2022-11-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

FTX kicked off its bankruptcy hearing on Tuesday, and the initial statements give Sam Bankman-Fried and company little to cheer. James Bromley, counsel to FTX's new management, had choice words during the first day in the Delaware hearing. Ray and his new management team's estimate of FTX's cash holdings has nearly doubled, a Saturday filing showed. In the letter, seen by the Financial Times, Bankman-Fried said excessive borrowing by Alameda Research was responsible for FTX's collapse. Elon Musk's EV maker has seen its market cap plunge from a high of $1.2 trillion.

☆ The dollar's dominance has peaked now that inflation is falling and Fed tightening has been priced in, State Street strategist says
▼ + stars: | 2022-11-22 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Dwyfor Evans said, "the worst is over as far as inflation is concerned… and the tightening of policy by the Fed is priced in." We think we're moving towards an environment that is actually going to be more supportive for some of the higher-beta currencies." "Inflation in the US is actually falling quite sharply on a short-term basis in various sorts of sectors," he said. "The tightening of policy by the Fed is actually priced in," he said. Read more: Larry Summers doesn't see US interest rates topping 5% as the Fed juggles the 'two-sided risk' of inflation and slowdown

☆ Insana: The ‘7% solution’ on interest rates could come back to haunt the Federal Reserve
▼ + stars: | 2022-11-18 | by ( Ron Insana | ) www.cnbc.com time to read: +3 min

A trader watches as Federal Reserve Chair Jerome Powell speaks on a screen on the floor of the New York Stock Exchange (NYSE), November 2, 2022. Brendan McDermid | ReutersSt. Louis Federal Reserve President James Bullard suggested on Thursday that the central bank might have to raise short-term interest rates as high as 7% to ensure that inflation goes away. Once again, Bullard and other Fed officials say that the central bank cannot repeat the policy errors of the 1970s. Raising rates by up to three full percentage points from the Fed's current target range of 3.75% to 4% would ensure a very deep recession. That's the case whether its headline or core consumer prices or other measures of inflation more closely watched by the Fed.

☆ Investors cheering the CPI-fueled rally are set to run into the reality of an incoming recession as the Fed overdoes it with rate hikes, BlackRock says
▼ + stars: | 2022-11-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Investors feeling good about the latest stock rally will soon be confronted with the reality of a recession, BlackRock said. But a Fed pause likely wouldn't result in the meaningful rally markets are hoping for, Ned Davis Research previously warned, and hopes that the Fed will pause rate hikes are "optimistic," BlackRock said. We expect the Fed to pause its sharp hikes only after having caused a recession and when confronted with the economic pain. Other market commentators have noted that stock market rallies this year have been fleeting, as companies continue to face headwinds from rate hikes, a soaring US dollar, and persistently high inflation. "We need to see stocks fall more or good news of easing inflation to turn positive on stocks," strategists said.

☆ Sam Bankman-Fried's sudden turn from white knight to washout
▼ + stars: | 2022-11-12 | by ( Hannah Lang | ) www.reuters.com time to read: +3 min

But as traders rushed to withdraw funds from FTX, Bankman-Fried was in denial and told investors he was convinced the business would be rescued, according to a source familiar with the situation. Bankman-Fried also quickly became one of the largest Democratic donors in the United States, contributing $5.2 million to President Joe Biden's 2020 campaign. He amassed a fortune, estimated as high as $26.5 billion by Forbes a year ago, by taking advantage of the price differences in bitcoin in Asia and the United States. Bankman-Fried eventually started crypto trading firm Alameda Research in 2017 and founded FTX a year later. "I thought we would fail," Bankman-Fried said at a June conference weeks before FTX and Alameda extended lifelines to two struggling crypto platforms.

☆ The tech boom is officially over - and the FTX fiasco will spark a crypto crackdown, ex-Treasury chief Larry Summers says
▼ + stars: | 2022-11-10 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

The tech boom is over, thanks to the pandemic receding and interest rates rising, Larry Summers said. The ex-Treasury chief predicted the FTX fiasco will lead to greater crypto regulation. He warned some of the recent excesses in the tech sector won't return until the next speculative boom, if at all. Investors need to reset their expectations after years of venture capitalists subsidizing companies' user acquisition with zero regard for profits or sustainable growth, he continued. Summers also touched on the financial troubles of Sam Bankman-Fried's FTX and Alameda Research, which have roiled cryptocurrency markets this week.

☆ The Fed may need to hike interest rates above 6% to crush stubborn inflation, ex-Treasury chief Larry Summers says
▼ + stars: | 2022-11-08 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

The Fed may have to hike interest rates above 6% to curb stubborn inflation, Larry Summers said. He suggested the economy might be more resilient to rate increases than expected, which could heap pressure on the Fed to hike further. The Fed last targeted an interest rate that high in 2001. The veteran economist also cautioned in September that if the Fed doesn't crush inflation now, it might have to raise rates even higher down the line. Read more: Why the Fed will likely cause an unnecessary recession even though rampant inflation is fading away, according to the chief global strategist for JPMorgan's investing arm

After oil prices soared following Russia's invasion of Ukraine, European governments already have imposed windfall taxes on their oil industries. But most U.S. lawmakers show little appetite to reverse that trend after oil companies like Exxon Mobil Corp and Chevron Corp <CVX.N. Senator Sheldon Whitehouse and Representative Ro Khanna, both Democrats, are among legislators who have already introduced bills to tax excess oil company profits. Democratic Senators Kyrsten Sinema from Arizona and Joe Manchin from West Virginia would likely oppose a windfall profits tax, dimming its prospects, congressional sources and research groups said. Administration officials conceded privately that it may be difficult to enact a federal windfall profits tax, and said no deadline has been set for a next step.

As it battles inflation that remains at four-decade highs, the Federal Reserve is expected to hike its key interest rate another 0.75% Wednesday. This interest rate, known as the federal funds rate, affects the cost of borrowing and the pace of investment throughout the economy. As a result, some experts believe the Fed must keep raising interest rates, even if it drives unemployment higher. The U.S. unemployment rate currently stands at 3.5%. "This forces the Fed to continue its aggressive approach on interest rates."

☆ Biden’s oil windfall tax would backfire, warns Larry Summers
▼ + stars: | 2022-11-01 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN Business —Economist Larry Summers is pushing back after President Joe Biden floated the possibility of punishing the oil industry for high prices by imposing a windfall profit tax. “I’m not sure [I] understand the argument for a windfall profits tax on energy companies,” Summers said on Twitter Tuesday morning. Oil companies lost billions of dollars — and many went bankrupt — in 2020 when oil prices briefly crashed below zero for the first time ever during the Covid recession. Not surprisingly, the oil industry itself fired back at talk of a windfall profit tax. Raising taxes on the oil industry would discourage investment in new production, the API warned — “the exact opposite of what is needed.”

☆ Former Treasury Secretary Larry Summers urges Fed to keep hiking rates
▼ + stars: | 2022-11-01 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +3 min

New York CNN Business —Former US Treasury Secretary Larry Summers said on Tuesday that the growing chorus of economists and politicians urging the Federal Reserve to pause its aggressive rate hikes in order to fight inflation are misguided. Those critics say that the Fed could throw the economy into recession, but Summers argued there’s a much greater risk to the economy that the Fed is not doing enough to bring down prices. On oil windfall taxes: On Tuesday, Summers also pushed back after President Joe Biden floated the possibility of punishing the oil industry for high prices by imposing a windfall profit tax. The profits are a windfall of war,” Biden said from the Roosevelt Room, alongside Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm. “I think it would discourage investment in oil which ultimately mean higher oil prices.”

☆ Op-ed: Democrats are better for our country and economy
▼ + stars: | 2022-10-31 | by ( Rep. Suzan Delbene | Chair Of The New Democrat Coalition | ) www.cnbc.com time to read: +6 min

All of this is a direct result of the work Democrats have done in Congress and in the White House. While Democrats are moving America forward, Republicans are working to move our country and economy backward. Under President Biden's leadership, Democrats have grown our economy 3 times faster than when Republicans controlled Congress and the White House. This is what a pro-business, pro-worker, pro-economic growth party and economic plan look like. While Republicans look to the past, New Dems look to the future – and in about a week, Americans will decide between the two.

☆ Recession obsession: Warnings grow but nobody knows for sure
▼ + stars: | 2022-10-27 | by ( Christine Romans | ) edition.cnn.com time to read: +6 min

The welcome GDP report comes amid almost daily recession warnings from bank CEOs, business economists, think tanks and former Treasury secretaries. But as the dread grows, today’s news is a reminder that no one knows for sure whether the US economy will tip into a recession. Moreover, most of those same prognosticators agree that even if we do have a recession, it would be mild. Thirdly, we won’t know if we are, or were, in a recession until it is over:A recession may be coming. But even the staunchest recession hawks think a recession — if it happens — would be mild.

☆ Western economies rediscover meaning of scarcity
▼ + stars: | 2022-10-27 | by ( Edward Chancellor | ) www.reuters.com time to read: +8 min

Western companies, which outsourced production to China and other emerging markets, found themselves less constrained by their domestic workforces. China’s rising exports lowered the prices of traded goods, dampening inflationary pressures and allowing Western central banks to cut interest rates to their lowest levels in history. In the 1970s, economists worried that fiscal deficits would lead to higher interest rates and lower investment. Western governments now face constraints that are common in developing countries, relating to fiscal policy, inflation and financial stability. To reduce the burden of their war debts, governments in Europe and the United States held interest rates below inflation.

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