Friday, March 17, 2023

Wake-Up Call: Yellen Believes Banking System "Sound"

Treasury Secretary Janet Yellen
Treasury Secretary Janet Yellen offered firm, upbeat reassurances to rattled bank depositors and investors Thursday, even as American financial institutions and European agencies ordered fresh rescue efforts following the second-largest bank collapse in U.S. history. Questioned closely, sometimes aggressively, Yellen told senators at a Capitol hearing that the U.S. banking system “remains sound” and Americans “can feel confident” about the safety of their deposits. Her remarks, against the backdrop of deepening concerns about the health of the global financial system, were an effort to signal to markets that there would be no broader contagion from the collapse of Silicon Valley Bank in California and Signature Bank in New York.

By the time her testimony was over, another major institution, First Republic Bank, received an emergency infusion of $30 billion in deposits from 11 banks, according to Treasury. And in Europe hours earlier, Credit Suisse, Switzerland’s second-largest lender, got a promise from the Swiss central bank of a loan of up to 50 billion francs ($54 billion). Eleven of the biggest U.S. banks Thursday announced a $30 billion rescue package for First Republic Bank in an effort to prevent it from becoming the third to fail in less than a week and head off a broader banking crisis.

San Francisco-based First Republic serves a similar clientele as Silicon Valley Bank, which failed last week after depositors withdrew about $40 billion in a matter of hours. New York’s Signature Bank was shuttered on Sunday. It appears that First Republic, which had deposits totaling $176.4 billion as of Dec. 31, was facing similar issues. The group of banks behind the rescue package confirmed that other unnamed banks had seen large withdrawals of uninsured deposits. The Federal Deposit Insurance Corporation insures deposits up $250,000 for individual accounts.

First Republic Bank was on Thursday propped up by a group of 11 other banks in a bid to stem the contagion from SVB's collapse, amid fears that both banks were worryingly similar. 'This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system,' said a group of U.S. regulators led by Treasury Secretary Janet Yellen. Both banks courted a high-net-worth clientele. First Republic's clients included Mark Zuckerberg (left), who was offered a 1.05 percent mortgage rate on a $5.95 million loan for his five-bedroom Palo Alto home in 2011. At the time, the average 30-year rate was 4.45 percent. Both banks also had high levels of uninsured deposits - 94 percent at SVB, and 68 percent at First Republic. At most banks, roughly half of all deposits are uninsured.

NY Post Graphic (3/17/23)

NY Post (3/17/23)
➤BIDEN FAMILY ALLEGEDLY RECEIVED MONEY FROM CHINA: House Oversight Republicans said in a new memo issued Thursday that members of President Joe Biden’s family received just over $1 million indirectly from a Chinese company – the committee’s latest disclosure in its investigation into the Biden family’s business dealings.  The memo, which representatives for the White House and Hunter Biden’s legal team quickly dismissed, does not provide any evidence tying the payments directly to President Joe Biden, which Republicans have said is the purpose of their investigation.

The memo names Hallie Biden, the widow of the president’s son Beau Biden, as a previously unknown recipient of payments from Biden family associate John Robinson Walker, who wired members of Biden’s family money after receiving $3 million a China-based company. Hallie Biden and Hunter Biden, the president’s younger son, were romantically involved for a period after Beau Biden’s death. The House Oversight Committee quietly subpoenaed Bank of America for the financial records of three of Hunter Biden’s associates, including Walker, on February 27, which is how it obtained these records.

House Oversight Republicans claim that these transactions raise questions about foreign influence over the Biden family, but there is still no conclusive evidence that Joe Biden was involved in his son’s business matters and there is no indication he abused his powers in public office to help his family make money. President Biden has previously denied any involvement in his son’s overseas business dealings.

➤GENERAL SAYS ISIS REMAINS THREAT TO HOMELAND: General Michael Kurilla, head of US Central Command, told Congress that 'at least hundreds of thousands' of US citizens could be vulnerable to an attack by ISIS-K and that the group has the 'ultimate goal to strike on the American homeland'. ISIS-K - the Islamic State in Khurasan - is an ISIS affiliate based in Afghanistan and a sworn enemy of both the Taliban and the United States. The group has claimed responsibility for the Kabul airport attack during the US evacuation in August 2021 which killed 170 Afghan civilians and 13 US soldiers. It continued launching attacks throughout 2022, including on mosques and schools. Kurilla's comments were made during an address on Thursday to the Senate Armed Services Committee as part of a request for defense spending for fiscal year 2024. 

➤RUSSIAN JET SEEN IN VIDEO DUMPING FUEL ON U-S DRONE: The Pentagon released video footage Thursday from a U.S. MQ-9 drone that crashed in the Black Sea on Tuesday showing a Russian jet buzzing and dumping fuel on it and apparently damaging the drone’s propeller.  The declassified footage shows a Russian Sukhoi-27 jet flying very close to the unmanned surveillance aircraft, in one of the first direct military confrontations between the U.S. and Russia since the invasion in Ukraine began more than a year ago. 

It wasn’t clear whether the video showed one jet flying past the drone twice, or both Russian jets that the Pentagon says were there. The U.S. said one of the Russian jets collided with the drone, also known as a Reaper, in international airspace, in what a Pentagon spokesman called an “unsafe, unprofessional intercept.” The footage doesn’t show an exact moment of collision, though it does show a Sukhoi flying directly toward the drone and coming into almost immediate contact, before the video feed is scrambled. At the end of the 42-second clip, after the video feed resumes, the MQ-9 drone’s propeller appears bent. In a summary released alongside the video, the Pentagon said “the propeller can be seen again and one of the props can be seen damaged.”

➤FLORIDA’S ‘ANTI-WOKE’ LAW LOSES IN APPEALS COURT: A federal appeals court has blocked Florida Governor Ron DeSantis from enforcing his so-called “anti-woke” law restricting how the state’s colleges and universities can teach their students about racial issues. U.S. District Judge Mark Walker called the law “positively dystopian.” It prevents college instructors from making their students “feel guilt, anguish, or any other form of psychological distress” due to their race, color, sex or national origin.” The state will appeal the ruling.

➤10 CHARGED IN DEATH OF VIRGINIA MAN: Seven sheriff’s deputies and three hospital workers have been charged with second-degree murder in the death of a Black man who died while being admitted to a mental hospital near Richmond, Virginia. Irvo Otieno, of Richmond, had a history of mental health problems. He had been in custody for several days before being admitted to Central State Hospital, where he died. His family and their attorneys say he was subjected to brutal treatment that led to his death. Otieno was 28.

About 30,000 people who work in the Los Angeles public schools have announced they will go on strike for three days starting Tuesday. The workers include bus drivers and cafeteria workers, among others. The teachers union has said it will honor the picket lines. The workers have been negotiating for nearly a year for better wages and increased staffing.

➤ALBANY’S CATHOLIC DIOCESE FILES FOR BANKRUPTCY: The Roman Catholic Diocese of Albany, New York, has filed for bankruptcy as it contends with hundreds of lawsuits alleging child sexual abuse. According to a report in the Times Union of Albany, the move comes after months of negotiations between the church and the plaintiffs, who allege that the diocese allowed abuses to occur and then covered them up. The Albany diocese is the fifth of New York’s eight Catholic dioceses to have declared bankruptcy as a result of lawsuits filed under the Child Victims Act, which allows survivors of child abuse to sue decades after the events occurred.

➤GENDER-AFFIRMING CARE SUPPORTED BY BIDEN ADMIN: Rachel Levine says that gender-affirming care for minors has the 'highest support' of the Biden administration. Levine has promised that medically changing children's gender will soon be normalized praising the controversial medical intervention which has been banned in several states at the Paediatric Grand Rounds Session at Children's Medical Center in Hartford. Levine was invited to speak at the event about the Florida Parental Rights in Education law and the political implications of gender reassignment surgery taking place at children's hospitals.

➤FTC SLAMS SOCIAL MEDIA GIANTS: The Federal Trade Commission (FTC) has slammed eight popular social media and video streaming platforms as 'goldmines for scammers,' as they launch a probe into how they scrutinize deceptive advertising.

Meta, Instagram, YouTube, TikTok, Snap, Twitter, Pinterest, and Twitch are being asked by the FTC to provide information on how restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent health-care products, financial scams, counterfeit and fake goods, or other fraud is examined.

Consumers have reporter losing more than $1.2 billion to fraud that started on social media in 2022 more than any other contact method according to new data.

🏀MARCH MADNESS STARTS WITH A BANG: Maryland defeated West Virginia yesterday in a hotly contested game that ended 67-65 after Maryland’s Julian Reese delivered a dramatic dunk in the final seconds of the game. It was just the first game of the March Madness season.

CHECK IT OUT: Click here for March Madness news, scores and schedules.

🏀LONZO BALL UNLIKELY TO PLAY NEXT SEASON: Chicago Bulls guard Lonzo Ball is expected to undergo a third operation on his left knee, which will keep him out for most if not all of the 2023-2023 season, The Athletic reports. Ball has already missed more than a year.

🏀BIG DEAL FOR BOGDAN: Bogdan Bogdanovic has agreed to a four-year, $68 million extension to his contract to play for the Atlanta Hawks, according to a report on ESPN. Bogdan joined the Hawks in 2020 after three seasons with the Sacramento Kings.

🏀DRAYMOND GREEN COMMITS ONE TOO MANY FOULS: Golden State Warriors forward Draymond Green was suspended by the NBA yesterday for exceeding the league’s technical foul limit. His 16th foul of the season came when he bounced the ball off Russell Westbrook’s head in the final seconds of Wednesday’s game against the Los Angeles Clippers. The Clippers won 134-126. Green is out for today’s game against the Atlantic Hawks.

🎾SWIATEK GETS TO SEMI-FINALS AT INDIAN WELLS: Iga Swiatek got past Sorana Cirstea 6-2, 6-3, yesterday to reach the semi-finals of the Indian Wells WTA and ATP Masters 1000 tennis tournament. Swiatek won both the French and Australian Opens last year. Meanwhile, Elena Rybakina defeated Czech player Karolina Muchova 7-6 (7/4), 2-6, 6-4. Rybakina has a history with Swiatek, who she defeated in January in round 16 of the Australian Open. In other news from Indian Wells, Frances Tiafoe defeated 10th-seeded Cameron Norrie 6-4, 6-4, to win his first semifinals appearance in a Masters 1000 tournament. He’ll play Daniil Medvedev, who defeated Alejandro Davidovich Fokina 6-3, 7-5.

🏀MICHAEL JORDAN SET TO SELL CHARLOTTE HORNETS: Michael Jordan is in serious talks to sell his controlling interest in the Charlotte Hornets to two of the team’s minority owners, ESPN reported. Jordan became a minority owner of the Hornets in 2006 and in 2010 purchased a controlling interest in the former Bobcats for $275 million. Forbes magazine says the Hornets are now worth about $1.7 billion.

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