India’s population to overtake China – what does this mean for the world?

How Salt Built The Global Economy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-820x461.jpeg" alt="" class="wp-image-423888" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107215223-1679839185536-signal-2023-03-22-092958_006.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bitnob CEO Bernard Parah and Cash App’s crypto product lead, Miles Suter, at the Africa Bitcoin Conference in Accra, Ghana. Bernard Parah</figcaption></figure>



ACCRA, Ghana — Block CEO Jack Dorsey and his top brass descended on Accra for the inaugural Africa Bitcoin Conference in December to talk about one of the most potentially disruptive and transformative alternatives to the continent’s existing financial system: bitcoin.



Since its inception in 2008, this unfamiliar form of money has alternatively been disdained as an absurdly complex toy for libertarian techies, a legalized form of gambling, a speculative bet to get rich quick, and a vehicle for criminals and fraudsters to obscure the origins of their ill-begotten gains.&nbsp;



But this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out. In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a hefty portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that doesn’t require an intermediary to approve transactions can be a vital lifeline for survival.&nbsp;



As cryptocurrency continues to rise in prominence and becomes a growing flashpoint for regulators, Dorsey and his deputies are providing an essential counternarrative: Bitcoin brings financial power to people who would otherwise have none.&nbsp;



“It doesn’t matter to me if the price goes down or up, because I can still use bitcoin as a vehicle to move money around the world instantaneously,” said Mike Brock, the CEO of TBD at Block, a unit which focuses on cryptocurrency and decentralized finance.



“I can exchange dollars for bitcoin and then bitcoin for Brazilian rial. There is a market for bitcoin in every corner of the world today,” continued Brock.



<h2 class="wp-block-heading" id="h-a-broken-financial-system"><a></a>A broken financial system</h2>



Moving money in Africa is an expensive and complicated process.



Commercial bank branch access is limited, especially for people living in remote and rural areas. Digital banking options are also limited. Tack on rampant hyperinflation, widespread government corruption, and capital controls trapping domestic cash in banks, and money can stop making sense altogether.



“If someone wants to move money to the country next door, normally, you’d have to fill up a suitcase full of cash and move it over the border,” explains Ray Youssef, CEO of Paxful.



Part of the problem stems from the continent’s quasi-colonial payment framework, in which roughly 80% of cross-border payments originating from African banks are processed offshore, mostly in the U.S. or Europe. That translates to higher costs and processing times that are sometimes measured in weeks.



Then there’s mobile money, which has been around since the early 2000s. Think of it like an electronic wallet tied to a phone number that does not require a smartphone or data to operate. Users can pay bills and shop with their phone through SMS texting, instead of having to rely on traditional banking options.



Africa’s mobile money transactions rose 39% to more than $700 billion in 2021, according to data from the GSM Association, a non-profit representing mobile network operators worldwide. World Bank data shows that account ownership at a financial institution — or via a mobile money service provider — has more than doubled in the last decade, rising to 55% of adults in Sub-Saharan Africa.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107213101-1679490554162-gettyimages-166894459-AFRICA_M-PESA.jpeg" alt="" class="wp-image-423889" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107213101-1679490554162-gettyimages-166894459-AFRICA_M-PESA.jpeg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107213101-1679490554162-gettyimages-166894459-AFRICA_M-PESA-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107213101-1679490554162-gettyimages-166894459-AFRICA_M-PESA-160x90.jpeg 160w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">An employee uses a Nokia 1200 mobile phone inside an M-Pesa store in Nairobi, Kenya, on Sunday, April 14, 2013. Trevor Snap | Bloomberg | Getty Images</figcaption></figure>



But even as adoption proliferates, mobile money users don’t get the perks of legacy banking, including earning interest on banked savings and building up a credit score based on a history of spending. Interoperability on the continent also remains a major issue with this alternative way of banking.



“The entire banking system in Africa is completely and utterly broken, even amongst the mobile money providers, the telcos,” said Youssef from Paxful, a peer-to-peer crypto marketplace where users can directly buy and sell tokens with one another.



“Two thousand payment networks and only 2% of them talk to each other. That number continues to grow. It’s not getting better, it’s actually getting worse,” continued Youssef.



Companies like Western Union and MoneyGram offer an expansive physical network of storefronts around the world designed to move money for those who are unbanked. That cash network was extraordinarily difficult and expensive to build, which is why there aren’t a lot of direct competitors. It is also why those cash transfers often incur substantial fees.



Bitcoin could eliminate all these intermediaries, allowing citizens to send digital payments directly to one another, without relying on credit and without incurring multiple settlement fees along the way.



“We’re going to move to a model where we can make payments without IOUs, or credit, or promises, or fiat,” said Alex Gladstein, chief strategy officer for the Human Rights Foundation, an organization that works with activists from authoritarian regimes around the world. “It’s literally like sending a piece of gold or a $20 bill instantly somewhere else.”



“If you can get access to the internet, you can settle bitcoin payments,” said Brock. “And the government can’t do anything about it.”



Dorsey points to the example of what happened in Nigeria during the protests against the brutality of the country’s Special Anti-Robbery Squad — a movement referred to as #EndSARS.



“The Nigerian government went to various bank corps to stop protesters from receiving money — which bitcoin made up for,” Dorsey said in Accra. “So our whole reason for being as a company is solving the same problem that bitcoin will ultimately solve for everyone in the world.”



Moving money on the bitcoin blockchain at its base layer has its own challenges. At times of peak demand, fees will often spike higher, and if a user is unwilling to pay a premium for the transaction, they may have to wait for more blocks of transactions to get confirmed before their transfer goes through.



Bitcoin’s Lightning Network helps alleviate both of those problems by slashing the cost of transactions to virtually zero and enabling nearly instantaneous cash payments around the planet – making bitcoin a more effective payment rail. This so-called “layer two” technology is built on top of bitcoin’s main chain, in part because bitcoiners are conservative about introducing changes to the base layer, for fear of opening it up to hacks or other mischief.



Yellow Card — Africa’s largest centralized cryptocurrency exchange run by CEO Chris Maurice — is also looking to embed this layer two technology into the platform, in order to drive down the price of transactions to virtually zero. Currently, the exchange doesn’t charge a commission for transactions, but network fees can be pretty steep when a lot of trades are happening at once.



“It’ll have a pretty big impact to our customers, because a lot of them are very price sensitive,” says Justin Poiroux, the co-founder and CTO of <a href="https://www.cnbc.com/2023/03/25/how-this-26-year-old-created-yellow-card-top-crypto-exchange-in-africa.html">Yellow </a>C<a href="https://www.cnbc.com/2023/03/25/how-this-26-year-old-created-yellow-card-top-crypto-exchange-in-africa.html">ard.</a>



Yellow Card’s plan is still in its infancy, but Poiroux tells CNBC that he thinks the Lightning Network could ultimately provide a lot of value for its retail customers.



Because Lightning offers a universal monetary language, money can travel around the world between any Lightning-enabled bitcoin wallet. Someone who uses a platform like Block’s Cash App — a regulated, American financial product with 51 million monthly transacting users which integrated with the Lightning Network in Feb. 2022 — can pay any Lightning invoice in the world instantly.



“It’s a new way of doing business. It’s a different paradigm entirely,” said Gladstein.



The crypto product lead at Cash App, Miles Suter, believes that a big part of bitcoin’s utility is how it gets around broken and convoluted payment systems that don’t talk to each other.



“At Cash App in particular, we’ve always been really interested in taking bitcoin beyond just being seen an investment and bringing day-to-day utility to it,” Suter told CNBC on the sidelines of the Africa Bitcoin Conference.



“In many ways, the people on the African continent are already doing that with the tools they have,” continued Suter.



<h2 class="wp-block-heading"><a></a>Sending cash with Lightning</h2>



Bernard Parah is a 30-year-old entrepreneur living in Jos, Nigeria, about a five hour drive from the capital city of Abuja. He’s the CEO of Bitnob, an app that lets users across Africa buy, save, and invest in bitcoin. Bitnob is SMS-based and piggybacks on the mobile money system, making it easier for people to send money directly into bank accounts and mobile money wallets in African countries.



Parah recently teamed up with Strike, a Lightning Network payments platform, to launch a feature called “Send Globally” that allows Americans to transfer money to people living in Nigeria, Ghana, and Kenya.



It uses local fiat cash on either side of the transaction, but bitcoin is used under the hood as the pipeline to jump money over the border. The end user never touches the cryptocurrency themselves.



“We’re able to settle into bank accounts or mobile money accounts, without the recipients having to interact with bitcoin themselves,” Parah tells CNBC.



“Over time, we’ve seen that there are still people who really don’t understand how to use bitcoin; who don’t care about bitcoin. What they do care about is their problems getting solved,” continued Parah.



It feels like a wire transfer or a Venmo payment, according to Strike CEO Jack Mallers.



“It’s instant. There’s no debt. There’s no credit. There’s no delays,” explains Mallers.



The model works because Parah and Mallers are willing to take on the liability associated with the transfer by holding cash in escrow on either end of the exchange.&nbsp;



Once the money is received in Nigeria, Bitnob — which is a regulated entity with connections to the local banks — will take that bitcoin and turn it into their local currency.



“It’s just two regulated entities communicating over the language of bitcoin and cutting out excess fees,” said Suter. “I think that’s revolutionary.”



Mallers says that they offer more competitive foreign exchange rates by using bitcoin as a price-setting intermediary, a sort of new world reserve currency.



“The rate that we got was actually 60% better than the traditional forex market rate,” said Mallers. “The way to actually think about how we’re achieving forex if we clear through bitcoin is, ‘I have dollars. How many bitcoin can I get for my dollars? And then how many naira can I get for my bitcoin?’” said Mallers.



“It’s acting as the most liquid, accessible, global instrument for us to clear and settle value amongst each other,” he said.



The arrangement also offers a few big ancillary benefits, including interoperability with payment apps around the world that have tens of millions of users.



Block’s Suter explained that Cash App could theoretically interoperate with Bitnob.



“We’re only live in the U.S. right now, but that doesn’t mean we can’t speak to Bitnob in Nigeria and transfer value instantly and for free across these borders,” Suter said of Cash App.



<h2 class="wp-block-heading">Meeting customers where they are</h2>



South African developer Kgothatso Ngako, who goes by KG, has integrated the Lightning Network into the GSM network, combining the best of a few worlds, in a larger effort to meet customers where they are.



“My focus is giving people without an internet connection the ability to send or receive bitcoin,” Ngako said.



KG calls his custodial Lightning wallet “Machankura” — South African slang for money. Whereas most Lightning transactions today require a smartphone and data, Ngako’s service integrates lightning via Unstructured Supplementary Service Data, or USSD, which is the protocol that mobile money runs on. (It is similar to HTTP, or HyperText Transport Protocol, the protocol on which the web was built.)



Ngako tells CNBC that he currently has around 3,000 users spread across eight countries, with a concentration in South Africa, Uganda, Kenya, and Nigeria. In his home market of South Africa, there are strict rules around currency exchange, which make his product even more appealing to some users looking to move their money abroad.



“The South African Reserve Bank regulates the cross-border flow of capital — including the exchange of currency — to and from South Africa. You need some form of approval to convert ZAR into foreign currency,” said Ernest Marais, partner at Johannesburg law firm, Tabacks.



KG’s Machankura is compatible with any Lightning wallet on the planet. In practice, this means that someone with the Cash App in San Francisco, for example, could instantly send bitcoin via Lightning to the phone number of someone with a data-less, basic phone living in a remote part of Uganda.



Ngako’s project does face some risks, including regulatory blowback.



Marais tells CNBC that because the South African Reserve Bank cannot regulate the cross-border flow of cryptocurrency, it is considered to be illegal and a criminal offense — though crypto regulation largely remains nebulous across most of the continent.



“All African central banks, except for Central African Republic, have made notices stating that they don’t issue bitcoin and hence they don’t regulate it,” counters Ngako, adding that a bitcoin transaction cannot be considered a cross-border exchange as bitcoin transactions aren’t regulated within the central bank’s institution.



But the rules are confusing for everyone involved.



“The actual location of crypto assets is an anomaly. At what point does it leave the country?” continued Marais.



Ultimately, Ngako believes that once Machankura begins to scale, it will be a major driver of bitcoin adoption across the continent. To that end, Ngako is raising money and building — a common refrain among the entrepreneurs on the ground in Accra.



As Dorsey said in Africa, “More and more mass adoption will, in my belief, take away all the oxygen” from governments attempting to control behavior through financial oppression.



“So what do we do? We build, we build, we build, we build, we build, they can’t stop us. And that’s what’s important.”

107215223-1679839185536-signal-2023-03-22-092958_006

Bitcoin is poised to blow up Africa’s $86 billion banking system

What’s going on with A.I. feels like ‘the iPhone moment

What’s going on with A.I. feels like ‘the iPhone moment,’ Nvidia CEO says #Shorts

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-820x547.jpeg" alt="" class="wp-image-423877" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo illustration, the Silicon Valley Bank logo is visible on a smartphone, with the stock market index in the background on the personal computer on March 14, 2023, in Rome, Italy. Andrea Ronchini | Nurphoto | Getty Images</figcaption></figure>



First Citizens Bank &amp; Trust Co will buy Silicon Valley Bank’s deposits and loans, the U.S. Federal Deposit Insurance Corporation said Monday, just over two weeks after the biggest U.S. banking collapse since Lehman Brothers.



The deal includes the purchase of approximately $72 billion of SVB assets at a discount of $16.5 billion, but around $90 billion in securities and other assets will remain “in receivership for disposition by the FDIC.”



“In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million,” the FDIC said in a release.



It comes after the regulator transferred all SVB deposits and assets into a new “bridge bank” earlier this month in an effort to protect depositors of the failed lender.



“The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank &amp; Trust Company on Monday, March 27, 2023,” the FDIC statement said Monday.



“Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank &amp; Trust Company that systems conversions have been completed to allow full–service banking at all of its other branch locations.”



First Citizens Bank and the FDIC also entered into a “loss-share transaction” — in which the FDIC absorbs part of the loss on a particular pool of assets — on the commercial loans purchased from the SVB bridge bank.



“The loss–share transaction is projected to maximize recoveries on the assets by keeping them in the private sector. The transaction is also expected to minimize disruptions for loan customers,” the FDIC explained.



The regulator added that the estimated cost of SVB’s failure to its Deposit Insurance Fund (DIF) will be around $20 billion, with the exact cost determined once the receivership is terminated.



Regulators closed down SVB, a big name in the tech and venture capital sector, and took control of its deposits on March 10 in what was the largest U.S. bank failure since the global financial crisis.



— CNBC’s Jihye Lee contributed to this report

107209007-1678882459922-gettyimages-1248244138-ronchini-photoill230314_npuxf

First Citizens to buy large chunk of failed Silicon Valley Bank

Where Do EV Batteries Go When They Die?

How Old

How Old, Nasty Airplane Seats Are Given A Second Life

The Future Of The U.S. Tank Force

Costco vs Sam’s Club: A Battle For Your Bulk Buys

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-820x547.jpeg" alt="" class="wp-image-419969" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, July 27, 2022.
Elizabeth Frantz | Reuters</figcaption></figure>



WASHINGTON — The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end. Along with its ninth hike since March 2022, the rate-setting Federal Open Market Committee noted that future increases are not assured and will depend largely on incoming data. “The Committee will closely monitor incoming information and assess the implications for monetary policy,” the FOMC’s post-meeting statement said. “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.“ That wording is a departure from previous statements which indicated “ongoing increases” would be appropriate to bring down inflation.



While comments Fed Chair Jerome Powell made during a news conference were taken to mean that the central bank may be nearing the end of its rate-hiking cycle, he qualified that the inflation fight isn’t over.



“The process of getting inflation back down to 2% has a long way to go and is likely to be bumpy,” the central bank leader said.



Also, Powell acknowledged that the recent events in the banking system were likely to result in tighter credit conditions, and that was likely why the central bank’s tone had softened.



Still, he said that despite market pricing to the contrary, “rate cuts are not in our base case” for the remainder of 2023.



Stocks initially rose after the Fed’s decision, but slumped following Powell’s remarks.



“The U.S. banking system is sound and resilient,” the committee said, in its prepared statement. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.”



During the news conference, Powell said the FOMC considered a pause in rate hikes in light of the banking crisis, but ultimately unanimously approved the decision to raise rates due to intermediate data on inflation and the strength of the labor market.



“We are committed to restoring price stability and all of the evidence says that the public has confidence that we will do so, that will bring inflation down to 2% over time. It is important that we sustain that confidence with our actions, as well as our words,” Powell said.



The increase takes the benchmark federal funds rate to a target range between 4.75%-5%. The rate sets what banks charge each other for overnight lending but feeds through to a multitude of consumer debt like mortgages, auto loans and credit cards.



Projections released along with the rate decision point to a peak rate of 5.1%, unchanged from the last estimate in December and indicative that a majority of officials expect only one more rate hike ahead.



Data released along with the statement shows that seven of the 18 Fed officials who submitted estimates for the “dot plot” see rates going higher than the 5.1% “terminal rate.“



The next two years’ worth of projections also showed considerable disagreement among members, reflected in a wide dispersion among the “dots.” Still, the median of the estimates points to a 0.8 percentage point reduction in rates in 2024 and 1.2 percentage points worth of cuts in 2025.



The statement eliminated all references to the impact of Russia’s invasion of Ukraine.



Markets had been closely watching the decision, which came with a higher degree of uncertainty than is typical for Fed moves.



Earlier this month, Powell had indicated the central bank may have to take a more aggressive path to tame inflation. But a fast-moving banking crisis thwarted any notion of a more hawkish move – and contributed to general market sentiment that the Fed will be cutting rates before the year comes to a close.



Estimates released Wednesday of where Federal Open Market Committee members see rates, inflation, unemployment and gross domestic product underscored the uncertainty for the policy path.



Officials also tweaked their economic projections. They slightly increased their expectations for inflation, with a 3.3% rate pegged for this year, compared with 3.1% in December. Unemployment was lowered a notch to 4.5%, while the outlook for GDP nudged down to 0.4%.



The estimates for the next two years were little changed, except the GDP projection for 2024 came down to 1.2% from 1.6% in December.



The forecasts come amid a volatile backdrop.



Despite the banking turmoil and volatile expectations around monetary policy, markets have held their ground. The Dow Jones Industrial Average is up some 2% over the past week, though the 10-year Treasury yield has risen about 20 basis points, or 0.2 percentage points, during the same period. While late 2022 data had pointed to some softening in inflation, recent reports have been less encouraging. The personal consumption expenditures price index, a favorite inflation gauge for the Fed, rose 0.6% in January and was up 5.4% from a year ago – 4.7% when stripping out food and energy. That’s well above the central bank’s 2% target, and the data prompted Powell on March 7 to warn that interest rates likely would rise more than expected.



But the banking issues have complicated the decision-making calculus as the Fed’s pace of tightening has contributed to liquidity problems. Closures of Silicon Valley Bank and Signature Bank, and capital issues at Credit Suisse and First Republic, have raised concerns about the state of the industry. While big banks are considered well capitalized, smaller institutions have faced liquidity crunches due to the rapidly rising interest rates that have made otherwise safe long-term investments lose value. Silicon Valley, for instance, had to sell bonds at a loss, triggering a crisis of confidence. The Fed and other regulators stepped in with emergency measures that seem to have stemmed immediate funding concerns, but worries linger over how deep the damage is among regional banks. At the same, recession concerns persist as the rate increases work their way through the economic plumbing. An indicator that the New York Fed produces using the spread between 3-month and 10-year Treasurys put the chance of a contraction in the next 12 months at about 55% as of the end of February. The yield curve inversion has increased since then. However, the Atlanta Fed’s GDP tracker puts first-quarter growth at 3.2%. Consumers continue to spend – though credit card usage is on the rise – and unemployment was at 3.6% while payroll growth has been brisk.

107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed

Fed hikes rates by a quarter percentage point, indicates increases are near an end

Why 200K+ Service Members And Veterans Are Suing 3M

Why do men die before women? #Shorts

The Rise Of Dumb Phones

How Biden’s climate plan could steal business from Europe

Nvidia CEO Jensen Huang On How His Big Bet On A.I. Is Finally Paying Off – Full Interview

Why Ford And VW Shut Down Their Multi-Billion Dollar Self-Driving Project

CNBC

India’s population to overtake China – what does this mean for the world?

How Salt Built The Global Economy

Bitcoin is poised to blow up Africa’s $86 billion banking system

What’s going on with A.I. feels like ‘the iPhone moment,’ Nvidia CEO says #Shorts

First Citizens to buy large chunk of failed Silicon Valley Bank

Where Do EV Batteries Go When They Die?

How Old, Nasty Airplane Seats Are Given A Second Life

The Future Of The U.S. Tank Force

Costco vs Sam’s Club: A Battle For Your Bulk Buys

Fed hikes rates by a quarter percentage point, indicates increases are near an end

Why 200K+ Service Members And Veterans Are Suing 3M

Why do men die before women? #Shorts

The Rise Of Dumb Phones

How Biden’s climate plan could steal business from Europe

Nvidia CEO Jensen Huang On How His Big Bet On A.I. Is Finally Paying Off – Full Interview

Why Ford And VW Shut Down Their Multi-Billion Dollar Self-Driving Project

How Silicon Valley Bank Collapsed

News Tips

Advertise With Us

CNBC

India’s population to overtake China – what does this mean for the world?

How Salt Built The Global Economy

Bitcoin is poised to blow up Africa’s $86 billion banking system

What’s going on with A.I. feels like ‘the iPhone moment,’ Nvidia CEO says #Shorts

First Citizens to buy large chunk of failed Silicon Valley Bank

Where Do EV Batteries Go When They Die?

How Old, Nasty Airplane Seats Are Given A Second Life

The Future Of The U.S. Tank Force

Costco vs Sam’s Club: A Battle For Your Bulk Buys

Fed hikes rates by a quarter percentage point, indicates increases are near an end

Why 200K+ Service Members And Veterans Are Suing 3M

Why do men die before women? #Shorts

The Rise Of Dumb Phones

How Biden’s climate plan could steal business from Europe

Nvidia CEO Jensen Huang On How His Big Bet On A.I. Is Finally Paying Off – Full Interview

Why Ford And VW Shut Down Their Multi-Billion Dollar Self-Driving Project

How Silicon Valley Bank Collapsed

News Tips

Advertise With Us

Newsletters