Fed Mulling Tougher Rules For Midsize Banks After SVB Crash
- The Federal Reserve is reportedly mulling stricter rules and oversight for midsize banks that are similar in size to the collapsed Silicon Valley Bank.
- A review of the bank’s failure by Fed Vice Chair for Supervision Michael Barr could pave the way for strengthened rules on banks in the $100 billion to $250 billion range.
- The review will be released by May 1 and augments a review of bank capital rules by Barr that is already underway.
Warren Buffett’s Berkshire Agrees To Give Better Disclosures After SEC Push
- Berkshire Hathaway Inc has reportedly agreed to disclose in a better way how its board of directors manages risks, including those taken by Chairman Warren Buffett after the Securities and Exchange Commission asked the company to do a better job.
- In correspondence made public on Tuesday, the regulator’s corporate finance division asked Berkshire to “enhance” its risk management disclosures in its annual proxy filings.
- Following this, Berkshire agreed to make the requested changes.
Drug Companies Raising Prices Greater Than Inflation? US Government Mulling Imposing Fines
- Under Joe Biden’s signature Inflation Reduction Act, drugmakers for twenty-seven drugs will be penalized for charging prices that rise faster than inflation for people with disabilities or the elderly on the government’s Medicare health program.
- Price increases for over 50% of Medicare-covered drugs outpaced inflation from 2019 to 2020, averaging 1% that year. A third of those had price jumps of over 7.5%.
Meta-Backed Undersea Cable Project Delayed By China Over Spying Fears
- China is pushing for more control over undersea cable projects in the South China Sea and held back approval for a project that involved Facebook parent Meta Platforms Inc (NASDAQ: META) for several months.
- The cable dubbed SJC2, which will connect Japan with Singapore, Taiwan, and Hong Kong, was delayed for more than a year due to Chinese objections and permit issues.
- The consortium building SJC2 includes Mark Zuckerberg-led Meta along with China Mobile and Taiwan’s Chunghwa Telecom.
Wall Street Journal
Norfolk Southern Should Be Held Financially Responsible For Fatal Rail Accidents: Ohio Attorney General Sues
- Ohio Attorney General Dave Yost filed a complaint against Norfolk Southern Corp (NYSE:NSC) seeking civil penalties, damages, court costs, and other relief related to the rail derailment on February 3.
- The lawsuit asked the court to order the company to pay for damages to natural resources, property, and economic harm done to the state and its residents.
- The attorney general’s office cited Norfolk Southern for 58 alleged violations of state and federal laws.
Tyson To Shutter Two US Chicken Plants Employing Almost 1,700 Workers
- Tyson Foods Inc (NYSE:TSN) will reportedly close two chicken plants in May, affecting nearly 1,700 employees. Demand will be shifted to other Tyson facilities.
- Tyson will shut down a plant in Glen Allen, Virginia, with around 700 employees, and a plant in Van Buren, Arkansas, with nearly 1,000 employees.
Apple Eases On Bonus, Hiring And More, Joining The Cost Cut Bandwagon; Triggers Fears Of Layoffs Amongst Employees
- Apple Inc (NASDAQ:AAPL) is postponing perks for some corporate divisions and expanding a cost-cutting effort joining its peers in streamlining operations.
- Now Apple proposes to forego bonuses or promotions for April, with the payments occurring only in October.
- Apple is also restricting hiring and leaving additional positions open after employee departure.
- Apple’s current policy requires employees to work from an Apple building thrice weekly, triggering fear of downsizing amongst employees.
UAE Spymaster Reportedly Buys Stake In TikTok At $220B Valuation Amid Possible US Ban
- ByteDance Ltd, the Chinese parent of TikTok, was valued at $220 billion in a private-market investment by a company controlled by United Arab Emirates spymaster Sheikh Tahnoon bin Zayed Al Nahyan.
- Sheikh Tahnoon acquired a stake, valued at over $100 million, from existing investors in recent months.
- Sheikh Tahnoon-associated G42 reportedly purchased the stake at a discount to the $300 billion that ByteDance set during its share buyback program.
$150M Crypto Shorts Liquidated In 12 Hours As Bitcoin Holds Near $25K
- Crypto shorts took a severe hit as Bitcoin (CRYPTO: BTC/USD) breached $26,000 early Wednesday morning.
- Data from CoinGlass shows that over $150 million shorts have been liquidated in the last 12 hours. The total short and long liquidations stand at $258 million in the last 12 hours.
- The largest single liquidation order happened on Bitmex for Ethereum (CRYPTO: ETH/USD) at $10.02 million.
Why This Money Manager Thinks Fed’s SVB Rescue Plan Could Lead To ‘Much Larger’ Problems
- As Street debates the ramification of the SVB Financial Group (NASDAQ:SIVB)-owned Silicon Valley Bank’s collapse and the government’s rescue, one analyst reasoned that the solution for the problem could not mean a complete resolution.
- The Fed stepping in to prevent a bank run could be a restart of quantitative easing, setting the stage for much larger problems, said Genevieve Roch-Decter, founder of financial media company Grit Capital.
- The former money manager noted that SVB’s problem was with its bond portfolio locked in at low yields, forcing the bank to sell the bonds at considerable losses to meet the $42 billion withdrawal requests in one day.
Credit Suisse Plunges Hard, Putting Market Rally At Risk; What’s Going On With The Swiss Bank
- Credit Suisse Group AG (NYSE:CS) shares were plunging in premarket trading on Wednesday after its biggest shareholder ruled out continued financing support.
- Shares of the Swiss lender fell 1.18% on Tuesday despite the broader market recovery after it said it found material weaknesses in its financial reporting over the past two years due to ineffective internal controls.
- The renewed selling came on the back of its biggest investor — Saudi National Bank — stating it would not buy additional shares in Credit Suisse.
- The Saudi bank reportedly said regulatory guidelines do not allow it to invest over 10% of an entity. Reuters reported that the Middle East bank’s stake in Credit Suisse is tantalizingly close to the mark.
SVB Parent Reveals Goldman Sachs Bought Its Bond Portfolio Before Regulators Stepped In
- SVB Financial Group (NASDAQ:SIVB) said in a filing that Goldman Sachs Group Inc (NYSE:GS) had bought its bond portfolio before the receivership for Silicon Valley Bank.
- The filing indicated that the portfolio had a book value of about $23.97 billion. “As previously disclosed and before the commencement of the receivership for Silicon Valley Bank, on March 8, 2023, Silicon Valley Bank completed the sale of a portfolio of available-for-sale securities with a book value of approximately $23.97 billion for net proceeds of approximately $21.45 billion (resulting in an after-tax loss of approximately $1.8 billion). The portfolio was sold to Goldman Sachs & Co. LLC at negotiated prices,” the group stated in a filing.
H&M’s “Worse Than Feared” Q1 Sales Reflect Cutthroat Rivalry; Launches Resale Program In Partnership With ThredUp
- Budget fashion retailer Hennes Mauritz (OTC:HNNMY) (OTC:HMRZF) H&M reported a tepid first-quarter sales growth of 3% year-on-year in local currencies, reflecting its struggle to compete with Zara-owner Inditex.
- Jefferies said local-currency sales were significantly lighter than consensus estimates, and implied sales fell 3% in February.
- Jefferies called the results “worse than feared” and expected an EBIT loss when the group reports its full Q1 results on March 31.
- Credit Suisse also predicted a “material” operating loss. Royal Bank of Canada (RBC) expected continued input cost increases in Q1 for the retailer and are likely to stay under pressure into Q2.
- On Tuesday, H&M tapped online consignment platform ThredUp Inc (NASDAQ: TDUP) to launch a resale program.
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