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Tag: finance and investments

  • 5 things to know for May 3: Border, Texas shooting, Writers strike, Fed meeting, Sudan | CNN

    5 things to know for May 3: Border, Texas shooting, Writers strike, Fed meeting, Sudan | CNN

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    CNN
     — 

    Many airline employees have gone for years without pay raises, even after enduring difficult working conditions during the pandemic. Pilots for American Airlines voted to strike this week, and Southwest pilots plan to vote as well, but they won’t be walking off the job anytime soon — if at all — due to a labor law that places considerable hurdles in the way of any union that wants to strike.

    Here’s what else you need to know to Get Up to Speed and On with Your Day.

    (You can get “CNN’s 5 Things” delivered to your inbox daily. Sign up here.)

    In preparation for an expected surge of crossings at the US-Mexico border next week, the Biden administration plans to send an additional 1,500 active-duty troops to the border to free up Department of Homeland Security agents. The troops will take on strictly administrative roles, officials said, and will join around 2,500 National Guard troops already in place. The surge of migrants is expected because Title 42, the Trump-era policy that allowed authorities to quickly turn away certain migrants at the border during the pandemic, expires on May 11. Encounters between border agents and undocumented immigrants are at around 7,000 per day at the moment and are expected to rise dramatically next week, despite a warning from the State Department and DHS about a new, more punitive policy related to border crossings.

    The man suspected of gunning down five people at a neighbor’s home in Texas last week — including a mother and her 9-year-old son — was captured Tuesday after a dayslong manhunt. The suspect was found under a pile of laundry in the closet of a home just miles from the Cleveland, Texas, residence where the shooting took place, San Jacinto County Sheriff Greg Capers said. “We just want to thank the person who had the courage and bravery to call in the suspect’s location,” an FBI spokesperson said, adding that authorities are now investigating whether the suspect had any help in hiding. The gunman will be held on five counts of murder and his bond is set at $5 million.

    Official describes suspect found hiding in laundry

    Popular late night shows are airing repeat episodes “until further notice” due to the film and TV writers’ strike, sources tell CNN. Several shows including “Saturday Night Live,” “Jimmy Kimmel Live!” and “The Late Show with Stephen Colbert” began airing repeat episodes as of Tuesday. Seth Meyers and Jimmy Fallon, who host NBC’s “Late Night with Seth Meyers” and “The Tonight Show,” respectively, previously said they would honor the strike and not air any new episodes as well. Late night shows are being especially impacted because they depend on their writers for bits, monologues and celebrity interview questions. Until an agreement is reached, analysts say the strike could shut down production on shows and cause a domino effect in the wider realm of the entertainment industry, pushing back the return of many programs set for the fall.

    exp TSR.Todd.writers.guild.strike.impacts.tv.movies_00003201.png

    Strike means TV shows and films in jeopardy

    Federal Reserve officials are expected to raise interest rates by a quarter point today. The Fed’s decision comes just two days after the collapse of First Republic Bank, the second-biggest bank failure in US history. When the Fed raises interest rates, banks need to raise the rates on their savings accounts in order to lure depositors from their competitors. That can put a disproportionate amount of pressure on mid-sized and regional banks — like the ones who saw depositors pull their money when the banking crisis began in March. Still, the Fed will move to raise interest rates today to lower inflation. To do that, it has to intentionally slow parts of the economy by making it more expensive for banks, and thereby consumers, to borrow money.

    Leaders of Sudan’s warring factions agreed to a seven-day ceasefire on Tuesday, the foreign ministry of South Sudan said in a statement. However, previous ceasefires have failed to quell the fighting between the rival factions in various parts of the country. Both sides — the Sudanese Armed Forces and the paramilitary Rapid Support Forces — have yet to comment on the report on their official channels. Tuesday’s announcement came after the UN’s refugee agency warned more than 800,000 people may flee to neighboring countries, as the ongoing violence blocks evacuation convoys from key ports in Sudan. More than 70,000 people have already fled Sudan to neighboring countries, a spokesperson for the agency said earlier this week.

    exp sudan ceasefire madowo FST 050312ASEG1 cnni world_00002001.png

    Seven-day ceasefire expected to begin Thursday in Sudan

    Teenage boy opens fire at Serbian school, killing eight children and a security guard, officials say

    Eight children and a security guard have have been killed after a 14-year-old boy allegedly opened fire in an elementary school in the Serbian capital of Belgrade, according to Serbia’s Interior Ministry. Several children and a teacher were also injured in the attack, officials said. The boy is in custody following the incident. 

    Cockroach at the Met Gala goes viral

    A bug on the red carpet received more buzz than some A-list celebrities. Watch the video here.

    Top 10 best cuisines in the world, according to CNN Travel

    Check out this list of appetizing cuisines. *Stomach rumbles — loudly* 

    NBA announces Most Valuable Player for 2022-2023

    Joel Embiid of the Philadelphia 76ers won the coveted award after the center topped the charts last year.

    Webb telescope detects mysterious water vapor in a nearby star system

    Astronomers detected water vapor around a rocky exoplanet located 26 light-years away from Earth. Here’s what it could mean.

    Kevin Costner and wife Christine Baumgartner are getting a divorce

    After more than 18 years, the two are going their separate ways.

    0

    That’s how many criminal charges, or lack thereof, will be filed against one of the former Memphis police officers involved in the fatal traffic stop that led to Tyre Nichols’ death. On January 7, 29-year-old Nichols, a Black man, was repeatedly punched and kicked by Memphis police officers following a traffic stop and brief foot chase. Former White Memphis police officer Preston Hemphill was part of the initial traffic stop in which bodycam footage revealed he used an “assaultive statement” after firing a stun gun at Nichols. Hemphill was not involved in the second encounter where Nichols was brutally beaten by police.

    “The public shouldn’t have their daily lives ruined by so-called ‘eco-warriors’ causing disruption.”

    — UK Home Secretary Suella Braverman, issuing a statement Tuesday on the government’s plan to take stronger action against peaceful protesters, days ahead of the coronation of King Charles III. The Home Office said parts of a controversial law will go into place today that will “give police the powers to prevent disruption at major sporting and cultural events.” For example, protestors who physically attach themselves to things like buildings could receive a six-month prison sentence or “unlimited fine,” the Home Office said in a statement.

    Check your local forecast here>>>

    Teen’s grand entrance steals the show at prom

    Most teenagers favor limousines and luxury cars for their prom transportation. These high school students, on the other hand, preferred a tank for their grand entrance. (Click here to view) 

    Tank To Prom 1

    Teen’s grand entrance steals the show at prom

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  • France is still mad about a hike in the retirement age. But can the protests last? | CNN

    France is still mad about a hike in the retirement age. But can the protests last? | CNN

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    Paris
    CNN
     — 

    Clashes erupted in Paris on Monday marking May 1, a traditional day of union-led marches, in the wake of hugely unpopular changes to France’s pension system that were signed into law last month.

    One of France’s largest unions, the CGT, had called for “historic” protests following months of unrest and widespread strikes that saw transport grind to a halt and garbage mount in the streets of Paris.

    A CNN team on the ground reported chaotic scenes from the protests, having witnessed fireworks and other projectiles thrown at the police who answered with tear gas as they retreated and regrouped. Ahead of the protest the police had warned of a heightened risk of violence, with at least 30 people arrested as a result of Monday’s demonstrations, according to CNN affiliate BFMTV.

    Protesters were forcibly pulling detained civilians out of the police’s arms.

    One officer hit by a Molotov cocktail received treatment after sustaining what seemed to be “serious burns,” according to a spokesman with the Paris police.

    Policemen look on during Monday's demonstrations, with fierce clashes between security officials and protesters leading to dozens of arrests.

    France’s Constitutional Council, which plays a similar role to the US Supreme Court, in April approved the most controversial part of the reform – the raising of the retirement age from 62 to 64.

    Despite the decision, some of France’s powerful unions say they will fight on, with the question now whether this anger will plague the rest of Macron’s time in office or disappear from the streets.

    Here’s all you need to know about the pension reforms.

    For the French “it was never about the age of retirement,” said political scientist Dominique Moïsi, “but the balance between work and life.”

    Pensions reform has long been a thorny issue in France. In 1995, weeks-long mass protests forced the government of the day to abandon plans to reform public sector pensions. In 2010, millions took to the streets to oppose raising the retirement age by two years to 62 and in 2014 further reforms were met with widespread demonstrations.

    “Each time there is opposition from public opinion, then little by little the project passes and basically, public opinion is resigned to it,” Pascal Perrineau of Sciences Po university said.

    For many in France, the pensions system, as with social support more generally, is viewed as the bedrock of the state’s responsibilities and relationship with its citizens.

    The post-World War II social system enshrined rights to a state-funded pension and health care, which have been jealously guarded since, in a country where the state has long played a proactive role in ensuring a certain standard of living.

    How Macron pushed through these reforms – bypassing a parliamentary vote – inflamed tensions as much as their content, focusing anger on the president himself.

    “I don’t think in the history of the Fifth Republic, we have seen so much rage, so much hatred at our president. And I remember as a young student, I was in the streets of Paris in May ’68, and there was rejection of General de Gaulle but never that personal hatred,” Moïsi said.

    Macron is above all a business-minded president. Making France more business-friendly and government more efficient have been central to his mission.

    The young president made social reforms, especially of the pensions system, a flagship policy of his 2022 re-election.

    For Macron’s cabinet, the problem is money. The current system – relying on the working population to pay for a growing age group of retirees – is no longer fit for purpose, the government says.

    Labor minister Olivier Dussopt said that without immediate action the pensions deficit would reach more than $13 billion annually by 2027. Referencing opponents of the reforms, Dussopt told CNN affiliate BFMTV: “Do they imagine that if we pause the reforms, we will pause the deficit?”

    It is worth noting that the higher pension age will still keep France below the norm in Europe and in many other developed economies.

    State pensions in France are also more generous than elsewhere. At nearly 14% of GDP in 2018, the country’s spending on state pensions is larger than in most other countries, according to the Organization for Economic Cooperation and Development (OECD).

    The Constitutional Council’s decision means the reforms are going ahead.

    From September, the first retirees will have to wait an additional three months for their state pensions. With regular, incremental increases, by 2030 the retirement age will have reached 64.

    Protesters are unbowed. One told journalists in the immediate aftermath of the decision they would “fight until this reform is abandoned.”

    Between January and mid-April, despite sporadic violence, support for the protests grew by some 11%, figures from pollster IFOP in partnership with Fiducial/Sud Radio showed.

    Protestors stormed the headquarters of luxury giant LVMH last month.

    In contrast, during the Yellow Vest protests, started in opposition to hikes in fuel prices, violence gradually soured public support. That these pensions protests continue to hold such popular goodwill is an ominous sign for Macron’s future plans.

    The size and violence of pensions protests spiked when Macron forced the legislation past the country’s lower legislative house without a vote. Since then, a determined minority has continued to protest – and a much smaller group to engage in violence. For now, with the law passed, momentum may have shifted away from mass street protests, even if flare-ups continue.

    But for an electorate the majority of whom did not pick Macron as their first choice, the May 1 marches will be a barometer of that anger, filmmaker David Dufresne, who directed a documentary on the Yellow Vest protests, told CNN.

    “Democracy by the street is back again,” he said.

    Macron is still not far into his second term, having been re-elected in 2022, and still has four years to serve as the country’s leader. Given French presidents serve fixed terms, his position is safe.

    Following the passage of the reforms, his government laid out a slew of policies promising additional funding for public services – nurse and teacher salaries included – tougher immigration measures and more environmental action in an effort to win back public support. But the horse may have already bolted for Macron’s efforts to woo back the public.

    Looking ahead to the next presidential election in 2027 – still far off on the political horizon – the anger Macron has stirred in the country’s streets doesn’t bode well for his party’s chances.

    While unions have led these protests, opposition politicians, political allies and even some in his own party have come out in support of the demonstrators.

    Macron has pressed on with his plans despite fierce opposition.

    In a re-run of the 2024 presidential run-off, with the far-right’s Marine Le Pen up against a candidate from Macron’s party, this popular anger may be enough to give pause to voters who supported Macron merely to stymie the far-right.

    “He failed to sell his logic and rationality,” Moïsi said, comparing Macron to Barack Obama, whose second term gave way to the presidency of Donald Trump.

    While Macron’s reforming crusade continues, the pensions controversy could ultimately force him to negotiate more, Perrineau warns – though he notes the French president is not known for compromise.

    His tendency to be “a little imperious, a little impatient” can make political negotiations harder, Perrineau said.

    That, he adds, is “perhaps the limit of Macronism.”

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  • Adidas sued by shareholders over its failed Ye partnership | CNN Business

    Adidas sued by shareholders over its failed Ye partnership | CNN Business

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    New York
    CNN
     — 

    Adidas shareholders filed a class-action lawsuit against the brand, accusing it of failing to warn investors about the antisemitism and “extreme behavior” exhibited by the rapper formerly known as Kanye West, before their partnership ended last year.

    In the lawsuit, filed Friday in a federal court, shareholders allege that Adidas “routinely ignored” his behavior as early as 2018. They claim that senior executives “ignored serious issues” affecting the Yeezy partnership, namely his antisemitic remarks and troubling public comments about slavery.

    In a report from that year, Adidas was “generally alluding” to the risks “rather than stating that the company had actually considered ending the partnership as a result of West’s personal behavior,” according to the lawsuit. During that time, Ye said that slavery was a “choice” in a TMZ interview.

    The lawsuit said that Adidas was aware of his behavior and that the company “failed to take meaningful precautionary measures to limit negative financial exposure” if the partnership ended.

    The lawsuit doesn’t name the rapper, who now goes by Ye. Adidas’ Chief Financial Officer Harm Ohlmeyer and former CEO Kasper Rørsted are named as defendants. The suit covers anyone who bought an Adidas share from May 3, 2018 (when Ye made the slavery remark) until 2023.

    “We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,” Adidas said in a comment to CNN.

    Adidas

    (ADDDF)     ended its almost decade-long partnership in October 2022 after Ye wore a “White Lives Matter” T-shirt in public. The Anti-Defamation League categorizes the phrase as a hate slogan used by White supremacist groups, including the Ku Klux Klan. Days later, Ye said “I can say antisemitic s*** and Adidas

    (ADDDF)     cannot drop me” during a podcast taping.

    Adidas said that its partnership with Ye ended because it “does not tolerate antisemitism and any other sort of hate speech” and said his comments were “unacceptable, hateful and dangerous.” It also said they violated the company’s “values of diversity and inclusion, mutual respect and fairness.”

    The company said in February that it was expected to lose $1.3 billion in revenue this year because it’s unable to sell the designer’s Yeezy clothing and shoes. In a statement, Adidas said its financial guidance for 2023 “accounts for the significant adverse impact from not selling the existing stock.” If the company can’t repurpose any of the remaining Ye clothing, Adidas said that could cost the company $534 million in operating profit this year.

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  • Big banks are bidding for troubled First Republic as FDIC deadline looms | CNN Business

    Big banks are bidding for troubled First Republic as FDIC deadline looms | CNN Business

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    New York
    CNN
     — 

    Federal regulators are holding an auction for ailing regional bank First Republic, a person familiar with the matter tells CNN.

    Final bids are due for First Republic Bank at 4 p.m. ET on Sunday, the source said.

    The Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers, is running the auction.

    Neither First Republic nor the FDIC were immediately available for comment.

    Shares of First Republic

    (FRC)     plunged from $122.50 on March 1 to around $3 a share as of Friday on expectations that the FDIC would step in by end of day and take control of the San Francisco-based bank, its deposits and assets. But that never happened.

    The FDIC had already done so with two other similar sized banks just last month — Silicon Valley Bank and Signature Bank — when runs on those banks by their customers left the lenders unable to cover customers’ demands for withdrawals.

    The Wall Street Journal previously reported that JPMorgan Chase and PNC Financial are among the big banks bidding on First Republic in a potential deal that would follow an FDIC seizure of the troubled regional bank.

    PNC declined to comment. JPMorgan did not respond to requests for comment.

    “We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients,” First Republic said in a statement Friday night.

    If there is a buyer for First Republic, the FDIC would likely be stuck with some money-losing assets, as was the case after it found buyers for the viable portions of SVB and Signature after it took control of those banks.

    A kind of shotgun marriage, arranged by regulators who didn’t want a significant bank to end up in the hands of the FDIC before it was sold, occurred several times during the financial crisis of 2008 that sparked the Great Recession. Notably, JPMorgan bought Bear Stearns for a fraction of its earlier value in March of 2008, and then in September bought savings and loan Washington Mutual, soon after Bank of America bought Merrill Lynch.

    The failure of Washington Mutual in 2008 was the nation’s largest bank failure ever. First Republic, which is bigger than either SVB or Signature Bank, would be the second largest.

    Soon after collapses of SVB and Signature in March, First Republic received a $30 billion lifeline in the form of deposits from a collection of the nation’s largest banks, including JPMorgan Chase

    (JPM)    , Bank of America

    (BAC)    , Wells Fargo

    (WFC)    , Citigroup

    (C)     and Truist

    (TFC)    , which came together after Treasury Secretary Janet Yellen intervened.

    The banks agreed to take the risk and work together to keep First Republic flush with the cash in the hopes it would provide confidence in the nation’s suddenly battered banking system. The banks and federal regulators all wanted to reduce the chance that customers of other banks would suddenly start withdrawing their cash.

    But while the cash allowed First Republic to make it through the last six weeks, its quarterly financial report Monday evening, with the disclosure of massive withdrawals by the end of March, spurred new concerns about its long-term viability.

    The financial report showed depositors had withdrawn about 41% of their money from the bank during the first quarter. Most of the withdrawals were from accounts with more than $250,000 in them, meaning those excess funds were not insured by the FDIC.

    Uninsured deposits at the bank fell by $100 billion during the course of the first quarter, a period during which total net deposits fell by $102 billion, not including the infusion of deposits from other banks.

    The uninsured deposits stood at 68% of its total deposits as of December 31, but only 27% of its non-bank deposits as of March 31.

    In its earnings statement, the bank said insured deposits declined moderately during the quarter and have remained stable from the end of last month through April 21.

    Banks never have all the cash on hand to cover all deposits. They instead take in deposits and use the cash to make loans or investments, such as purchasing US Treasuries. So when customers lose confidence in a bank and rush to withdrawal their money, what is known as a “run on the bank,” it can cause even an otherwise profitable bank to fail.

    First Republic’s latest earnings report showed it was still profitable in the first quarter — its net income was $269 million, down 33% from a year earlier. But it was the news on the loss of deposits that worried investors and, eventually, regulators.

    While some of those who had more than $250,000 in their First Republic accounts were likely wealthy individuals, most were likely businesses that often need that much cash just to cover daily operating costs. A company with 100 employees can easily need more than $250,000 just to cover a biweekly payroll.

    First Republic’s annual report said that as of December 31, 63% of its total deposits were from business clients, with the rest from consumers.

    First Republic started operations in 1985 with a single San Francisco branch. It is known for catering to wealthy clients in coastal states.

    It has 82 branches listed on its website, spread across eight states, in high-income communities such as Beverly Hills, Brentwood, Santa Monica and Napa Valley, California; in addition to San Francisco, Los Angeles and Silicon Valley. Outside of California, branches are in other high-income communities such as Palm Beach, Florida; Greenwich, Connecticut; Bellevue, Washington; and Jackson, Wyoming.

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  • Here’s what we know about First Republic Bank | CNN Business

    Here’s what we know about First Republic Bank | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    First Republic Bank has been teetering on the edge for weeks. It may be finally falling.

    The San Francisco-based lender could be next in the line to collapse, following in the footsteps of former competitors Silicon Valley Bank and Signature Bank.

    It certainly fits the bill: First Republic

    (FRC)    , like SVB, is a mid-sized regional bank with a highly concentrated customer base, outsized amounts of uninsured deposits and loads of unrealized losses on the bonds and treasuries it holds.

    Rumors swirled on Wednesday as publications rushed out reports from unnamed sources saying that the bank was looking to cut a deal to sell assets, that the White House wasn’t interested in facilitating a bailout (there were also reports that it is) and that the Federal Deposit Insurance Corporation is considering downgrading the bank’s debt, which would limit its access to essential Federal Reserve loans.

    The FDIC, Federal Reserve, White House and First Republic did not respond to requests for comment about those reports. But the damage has been done.

    Shares of the stock fell by nearly 30% on Wednesday, after plunging by 49% on Tuesday. The stock’s trading was halted numerous times both days as its rapid decline triggered volatility-triggered timeouts by the New York Stock Exchange.

    But what’s actually happening here?

    The reality of the situation: What we do know for certain is that First Republic reported on Monday that its total deposits fell 41% in the first quarter of 2023 to $104.5 billion, even after a consortium of banks stepped in with $30 billion to prevent the lender from failing. Without that cash infusion, deposits would have fallen by over 50%.

    But, importantly, the bank said that while it saw a sharp drop in deposit activity after the collapse of SVB and Signature Bank last month, activity began to stabilize at the end of March and has since remained steady.

    We also know that First Republic’s net interest income, which shows how much money the bank earned from lending and borrowing, was down 19.4% year-over-year at the end of the first quarter.

    On top of all that, the bank is vulnerable to liquidity problems.

    When the banking crisis erupted in mid-March, about two-thirds of First Republic’s deposits were uninsured with the FDIC. That’s lower than the 94% at Silicon Valley Bank — but at the end of last year, First Republic had an exceptionally high ratio of 111% for loans and long-term investments to deposits, according to S&P Global — meaning it has loaned and invested more money than it has in deposits.

    In short: The outlook for the bank is not good.

    “It’s becoming clearer each day” that First Republic is “toast,” said Don Bilson at Gordon Haskett, in a note Wednesday. “The only question that really needs to be answered is whether the [Federal Deposit Insurance Corporation] moves in before the weekend or during the weekend, which is when it usually does its thing.”

    Possible solutions: We also know that it’s not over until it’s over, and that the bank is still operating. There are still some narrow paths forward.

    There’s a small chance that First Republic stays the course and “muddles along as a standalone company,” said David Chiaverini, managing director of equity research at Wedbush Securities.

    What’s more likely is that the company will try to sell some of its loans and securities at the same cost they bought them for. In exchange, the buyer would receive a preferred equity interest in the company.

    That will be a tough sell since those assets would probably sell for well above market rate. First Republic’s bonds maturing in 2046 are currently trading at just 43 cents on the dollar. But the bank has been lucky before. First Republic has stayed afloat since March largely thanks to a $30 billion bailout from a conglomerate of large US banks and a $70 billion line of credit from JPMorgan.

    The third option is the worst for shareholders: the bank could go into receivership. When a struggling bank goes into receivership it means that a regulatory authority or government agency takes control of the bank and its assets, usually with the goal of liquidating those assets to repay the bank’s creditors.

    Investors in First Republic would most likely see their money wiped out in that scenario.

    Coming next: First Republic is in a very tricky situation. Investors will be crossing their fingers and holding their breath until Friday at 4 p.m. ET. That’s when newly-collapsed banks have admitted defeat in the past.

    Facebook-parent Meta on Wednesday reported that it grew sales by 3% during the first three months of the year, reversing a trend of three consecutive quarters of revenue declines and far exceeding Wall Street analysts’ expectations, reports my colleague Clare Duffy.

    Meta shares jumped as much as 12% in after-hours trading following the report, continuing the company’s strong trajectory since CEO Mark Zuckerberg announced that 2023 would be a “year of efficiency.”

    Another bright spot: user growth was relatively strong compared to recent quarters. The number of monthly active people on Meta’s family of apps grew 5% from the prior year to more than 3.8 billion and Facebook daily active users increased 4% to more than 2 billion.

    Still, Meta has a big hill ahead of it. The company also reported that profits declined by nearly a quarter to $5.7 billion compared to the same period in the prior year. Price per advertisement — an indicator of the health of the company’s core digital ad business — also decreased by 17% from the year prior.

    Meta has been in the midst of a massive restructuring, as it attempts to recover from a perfect storm of heightened competition, lingering recession fears resulting in fewer ad dollars and a multibillion dollar effort to build a future version of the internet it calls the metaverse.

    Meta said in November it would eliminate 11,000 jobs, the single largest round of cuts in its history. And in March, Zuckerberg announced Meta would lay off another 10,000 employees. All told, the cuts will shrink Meta’s workforce by a quarter.

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  • Credit Suisse outflows topped $68 billion as the bank veered towards collapse | CNN Business

    Credit Suisse outflows topped $68 billion as the bank veered towards collapse | CNN Business

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    London
    CNN
     — 

    Credit Suisse suffered outflows of 61.2 billion Swiss francs ($68.7 billion) in the first three months of the year and customers are still pulling their money from the bank as UBS races to complete a rescue of its stricken rival.

    “Credit Suisse experienced significant net asset outflows, in particular in the second half of March 2023. These outflows have moderated but have not yet reversed as of April 24, 2023,” the lender said in a statement Monday. Outflows in the first quarter amounted to 5% of assets under management, it added.

    Credit Suisse’s first-quarter earnings could be its last after it was bought last month by UBS

    (UBS)     in an emergency rescue deal orchestrated by the Swiss government.

    Swiss authorities judged that a tie-up with its larger rival offered the best chance of restoring stability in the banking sector globally, which had been rattled by the failure of two American banks.

    Credit Suisse

    (CS)     reported a 1.3 billion franc ($1.3 billion) loss for the first quarter, extending a losing streak that began in 2021. The bank posted a loss of 7.3 billion Swiss francs ($7.9 billion) in 2022, its biggest annual loss since the financial crisis in 2008.

    -— This is a developing story and will be updated.

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  • McCarthy slams Biden in handling of US debt | CNN Politics

    McCarthy slams Biden in handling of US debt | CNN Politics

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    ‘What changed, Mr. President?’: McCarthy slams Biden in handling of US debt

    House Speaker Kevin McCarthy traveled to Wall Street on Monday to deliver a fresh warning that the House GOP majority will refuse to lift a cap on government borrowing unless Biden agrees to spending cuts that would effectively neutralize his domestic agenda.

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  • Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

    Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

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    Editor’s Note: This is an updated version of a story that originally ran on April 14, 2023.


    New York
    CNN
     — 

    It’s April 18, the official deadline to file your federal and state income tax returns for 2022. (It is also, apparently, National Animal Crackers Day for those who celebrate.)

    Whether you have already filed your tax return or still need to, the good news is this tax filing season has gone much more smoothly than the past three, which were hurt by the pandemic.

    “This is the first tax season since 2019 where the IRS and the nation were on normal footing,” IRS Commissioner Danny Werfel said in a call with reporters.

    For instance, Werfel noted that since January, thanks to an infusion of some new funding after years of budget cuts, IRS employees have been able to answer 87% of calls from filers with questions. Last year, they answered fewer than 15%. And the wait times on those phone calls dropped to just 4 minutes this filing season from 27 minutes last filing season.

    The agency also added a roster of new online tools for filers, he added.

    Those online tools may be especially helpful today if you are scrambling to get your return in before midnight. Or, if you’ve come to the realization that you need to file for an extension. Either way, here are some key things to know:

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file on time, fill out Form 4868 electronically or on paper and send it in no later than today. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by the end of today.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you can’t pay what you owe in full, the IRS does have some payment plan options. But it might be smart to first consult with a certified public accountant or a tax preparer who is an enrolled agent to make sure you are making the best choice for your circumstance.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

    If you’ve already filed your return, you’re probably glad to have it in the rear view mirror. But you may still have a few questions about what’s ahead.

    What about my refund? If you are due a refund, the IRS typically sends it within 21 days of receiving your return. When yours does arrive, it may be smaller than last year, even if your financial life didn’t change much. That’s because a number of Covid-related tax breaks expired.

    So far, the average refund paid was $2,878 for the week ending April 7, down from $3,175 at the same point in last year’s filing season.

    Will I be audited?: The reasons and methods for auditing a taxpayer can vary — and many audits result in “no change,” meaning you don’t end up owing anything more to the IRS. But one thing is common for the vast majority of US tax filers: Audit rates are exceedingly low.

    For filers reporting incomes between $50,000 and $200,000, only 0.1% of them were audited in 2020, according to the latest data from the IRS. Even for very high income filers, audit rates were quite low: Just 0.4% for those reporting income of between $1 million and $5 million; 0.7% for those with income between $5 million and $10 million; and 2.4% for returns with income over $10 million.

    Looking ahead, the IRS commissioner noted in a press call that the agency will be using money from the Inflation Reduction Act to bolster its compliance efforts to focus more on auditing high-income individuals — defined as making $400,000 or more. As for filers with income below that level, he said he did not anticipate any change in the likelihood they would be audited.

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  • Christine Lagarde says she has ‘huge confidence’ that the US won’t default on its own debt | CNN Business

    Christine Lagarde says she has ‘huge confidence’ that the US won’t default on its own debt | CNN Business

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    New York
    CNN
     — 

    Christine Lagarde, president of the European Central Bank, said she has “huge confidence” the US will not allow the country to default on its own debt during an interview on CBS’ “Face the Nation” Sunday.

    “I just cannot believe that they would let such a major, major disaster happen,” Lagarde said, adding if a debt default did happen, it would have a “very, very negative impact” both in the US and around the world.

    “(The US is) a major leader in economic growth around the world. It cannot let that happen,” Lagarde said.

    The US government is in a partisan standoff for negotiations to resolve the debt crisis. If Congress doesn’t address the debt ceiling, the US could potentially face its first-ever default as early as this summer or as late as the fall. Lagarde said she understands politics, but “there is a time when the higher interest of a nation has to prevail.”

    The former International Monetary Fund managing director remained optimistic about the recovery of the global economy, despite the Federal Reserve indicating a mild recession later this year.

    “If you look at all the forecasts at the moment, it’s all positive,” Lagarde said. “It’s been slightly downgraded, but overall, we have a recovery.”

    Lagarde cited Russia’s war in Ukraine, banking sector instability in the US and Switzerland and inflation as creating “a hollow of uncertainty around a recovery that we want to embed.”

    Governments and central banks have a “narrow path” to navigate, Lagarde said, and they have to “adopt the right policies.”

    The IMF, of which Lagarde was the former head, holds a dimmer outlook. It now expects economic growth to slow from 3.4% in 2022 to 2.8% in 2023. Its estimate in January had been for 2.9% growth this year.

    “Uncertainty is high, and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled,” the organization said in its latest report.

    Economists predict banks are getting more cautious about lending money after the collapse of Silicon Valley Bank in March, escalating fears of a credit crisis.

    Lagarde said the ECB will have to measure the effects of bank activity in the US and Switzerland. The collapse of Silicon Valley Bank and Signature Bank, as well as Swiss banking giant Credit Suisse being forced to merge with UBS, induced turmoil in the banking sector.

    “If (banks) don’t lend too much credit, and if they manage their risk, it might reduce the work that we have to do to reduce inflation,” Lagarde said. “But if they reduced too much credit, then it will weigh on growth excessively.”

    Regarding China, Lagarde said she understands the competition between the two countries but hopes they can have a dialogue. She said trade should not be confrontational between China and the US.

    “I’m on the same page as Henry Kissinger or Kevin Rudd, the new Australian Ambassador (to the US),” Lagarde said. “Conflict is not unavoidable.”

    “Choosing” between the US and China economies would “lead to economic downside the amount of which is uncertain.”

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  • Three investors on how to protect your portfolio | CNN Business

    Three investors on how to protect your portfolio | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Wall Street has been hit with a barrage of complex signals about the economy’s health over the past month. From banking turmoil to weakening jobs data to slowing inflation, and now the start of earnings season, investors have remained largely resilient.

    But the Federal Reserve’s March meeting minutes revealed last week that officials believe the economy will enter a recession later this year. While that’s not new news to investors who have worried that a recession is on the horizon for the past year, it does mean that markets could take a turn for the worse.

    So, how should investors protect their portfolios? Investors say there isn’t one asset that Wall Street should pile all their bets on, but there are fundamentals that should underlie their investment strategies.

    Jimmy Chang, chief investment officer at Rockefeller Global Family Office, says he advises clients to be patient, defensive and selective when navigating the market.

    In other words, investors should make decisions based on logic, not a fear of missing out.

    “You chase these rallies and then it fizzles out — you’re left holding the bag,” he said.

    Chang also recommends that investors stay defensive by investing in high-quality blue chip stocks with solid balance sheets and keep dry powder.

    Doug Fincher, portfolio manager at Ionic Capital Management, says investors should brace their portfolios against inflation.

    The Personal Consumption Expenditures price index rose 5% for the 12 months ended in February, showing that inflation remains much higher than the Fed’s 2% target.

    Coupled with the fact that the central bank has signaled that it plans to pause interest rate hikes sometime this year, it’s possible inflation could prove stickier than Wall Street expects.

    “It is the boogeyman of traditional investments,” Fincher said.

    He manages the Ionic Inflation Protection exchange-traded fund, which seeks to specifically perform well during periods of high inflation. The portfolio’s core exposure is inflation swaps, which are transactions in which one investor agrees to swap fixed payments for floating payments tied to the inflation rate. The fund also invests in short-duration Treasury Inflation Protected Securities.

    Megan Horneman, chief investment officer at Verdence Capital Advisors, says that her firm has hedged its portfolio in cash. A well-known haven, cash is a better alternative to other perceived safe spots like gold, which tends to be volatile and run up too fast, she said.

    Investors have rushed into money market funds in recent weeks after the banking turmoil both shook their confidence in the banking system and sent ripples through the market.

    “Cash is actually earning you something at this point,” Horneman said. “You have to look long term.”

    Earnings season kicked off Friday with a bonanza of earnings from the nation’s largest banks.

    Perhaps most noteworthy out of the bunch was JPMorgan Chase, which reported record revenue and an earnings beat for its latest quarter.

    The bank has $3.67 trillion in assets, making it the largest bank in the country and a bellwether for the economy. Strong earnings reports from the New York-based bank and its peers including Wells Fargo, Citigroup and PNC Financial Services have shown a promising start to the earnings season.

    Charles Schwab, Goldman Sachs, Bank of America and Morgan Stanley report next week.

    Here are some key takeaways from JPMorgan Chase’s first-quarter earnings:

    • The company guided net interest income to be about $81 billion in 2023, up $7 billion from its previous estimate. That’s especially important because this earnings season is all about guidance, as investors try to gauge whether the economy is headed for a recession and which companies will be able to weather a potential downturn.
    • CEO Jamie Dimon said in the post-earnings conference call that while financial conditions are a bit tighter after the collapse of Silicon Valley Bank and Signature Bank, he doesn’t see a credit crunch. But chances of a recession are now higher, he said.
    • The company said that its portfolio’s exposure to the office sector is less than 10%, addressing concerns that the $20 trillion commercial real estate industry could be the next space to see turmoil.

    Read more here.

    Monday: Empire State manufacturing index and homebuilder confidence index. Earnings report from Charles Schwab (SCHW).

    Tuesday: Earnings reports from Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Netflix (NFLX), United Airlines (UAL) and Western Alliance Bancorp (WAL).

    Wednesday: Earnings reports from Citizens Financial Group (CFG), Morgan Stanley (MS), Tesla (TSLA) and International Business Machines (IBM). Speech from NY Federal Reserve President John Williams.

    Thursday: Philadelphia Fed manufacturing index, jobless claims, mortgage rates, US leading economic indicators and existing home sales. Earnings reports from AutoNation (AN) and American Express (AXP).

    Friday: Manufacturing PMI and services PMI. Earnings report from Procter & Gamble (PG).

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  • Retail spending fell in March as consumers pull back | CNN Business

    Retail spending fell in March as consumers pull back | CNN Business

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    Washington, DC
    CNN
     — 

    Spending at US retailers fell in March as consumers pulled back after the banking crisis fueled recession fears.

    Retail sales, which are adjusted for seasonality but not for inflation, fell by 1% in March from the prior month, the Commerce Department reported on Friday. That was steeper than an expected 0.4% decline, according to Refinitiv, and above the revised 0.2% decline in the prior month.

    Investors chalk up some of the weakness to a lack of tax returns and concerns about a slowing labor market. The IRS issued $84 billion in tax refunds this March, about $25 billion less than they issued in March of 2022, according to BofA analysts.

    That led consumers to pull back in spending at department stores and on durable goods, such as appliances and furniture. Spending at general merchandise stores fell 3% in March from the prior month and spending at gas stations declined 5.5% during the same period. Excluding gas station sales, retail spending retreated 0.6% in March from February.

    However, retail spending rose 2.9% year-over-year.

    Smaller tax returns likely played a role in last month’s decline in retail sales, along with the expiration of enhanced food assistance benefits, economists say.

    “March is a really important month for refunds. Some folks might have been expecting something similar to last year,” Aditya Bhave, senior US economist at BofA Global Research, told CNN.

    Credit and debit card spending per household tracked by Bank of America researchers moderated in March to its slowest pace in more than two years, which was likely the result of smaller returns and expired benefits, coupled with slowing wage growth.

    Enhanced pandemic-era benefits provided through the Supplemental Nutrition Assistance Program expired in February, which might have also held back spending in March, according to a Bank of America Institute report.

    Average hourly earnings grew 4.2% in March from a year earlier, down from the prior month’s annualized 4.6% increase and the smallest annual rise since June 2021, according to figures from the Bureau of Labor Statistics. The Employment Cost Index, a more comprehensive measure of wages, has also shown that worker pay gains have moderated this past year. ECI data for the first quarter of this year will be released later this month.

    Still, the US labor market remains solid, even though it has lost momentum recently. That could hold up consumer spending in the coming months, said Michelle Meyer, North America chief economist at Mastercard Economics Institute.

    “The big picture is still favorable for the consumer when you think about their income growth, their balance sheet and the health of the labor market,” Meyer said.

    Employers added 236,000 jobs in March, a robust gain by historical standards but smaller than the average monthly pace of job growth in the prior six months, according to the Bureau of Labor Statistics. The latest monthly Job Openings and Labor Turnover Survey, or JOLTS report, showed that the number of available jobs remained elevated in February — but was down more than 17% from its peak of 12 million in March 2022, and revised data showed that weekly claims for US unemployment benefits were higher than previously reported.

    The job market could cool further in the coming months. Economists at the Federal Reserve expect the US economy to head into a recession later in the year as the lagged effects of higher interest rates take a deeper hold. Fed economists had forecast subdued growth, with risks of a recession, prior to the collapses of Silicon Valley Bank and Signature Bank.

    For consumers, the effects of last month’s turbulence in the banking industry have been limited so far. Consumer sentiment tracked by the University of Michigan worsened slightly in March during the bank failures, but it had already shown signs of deteriorating before then.

    The latest consumer sentiment reading, released Friday morning, showed that sentiment held steady in April despite the banking crisis, but that higher gas prices helped push up year-ahead inflation expectations by a full percentage point, rising from 3.6% in March to 4.6% in April.

    “On net, consumers did not perceive material changes in the economic environment in April,” Joanne Hsu, director of the surveys of consumers at the University of Michigan, said in a news release.

    “Consumers are expecting a downturn, they’re not feeling as dismal as they were last summer, but they’re waiting for the other shoe to drop,” Hsu told Bloomberg TV in an interview Friday morning.

    This story has been updated with context and more details.

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  • Louisville gunman’s brain to be studied for CTE, father says | CNN

    Louisville gunman’s brain to be studied for CTE, father says | CNN

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    CNN
     — 

    The family of Connor Sturgeon – who was killed after he fatally shot five people Monday morning at the Old National Bank in Louisville, Kentucky – plans to have his brain tested for chronic traumatic encephalopathy, commonly known as CTE, his father and a spokesperson for the family told CNN on Thursday.

    “Yes, Connor is being tested for CTE. Probably will take a while to get results,” Todd Sturgeon, Connor Sturgeon’s father, texted to CNN.

    Pete Palmer, a family friend who is speaking for the Sturgeons, said the family and the state medical examiner are looking to have Connor Sturgeon’s brain tested.

    The medical examiner’s office has completed most of its tests, and the process of testing for CTE will now begin, Palmer said.

    CNN has reached out to the Kentucky state medical examiner for further information.

    CTE, a neurodegenerative brain disease, can be found in people who have been exposed to repeated head trauma. Studies have found that repetitive hits to the head – even without concussion – can result in CTE.

    According to Palmer, the family thinks Sturgeon had three significant concussions – two as an eighth-grade football player and one in basketball as a high school freshman.

    The disease, which can only be diagnosed with an autopsy and neuropathological exam, is pathologically marked by a buildup of tau protein in the brain that can disable neuropathways and lead to a variety of symptoms including memory loss, confusion, impaired judgment, aggression, depression, anxiety, impulse control issues and sometimes suicidal behavior.

    Police have not released information about a motive in the shooting.

    The testing disclosure comes as more families are talking about their loved ones who were killed.

    The daughter of Juliana Farmer, one of the five who were killed, said Wednesday night her mother had just moved to Louisville two weeks prior for a new job at the bank.

    “This monster took away my mother, and I’m hurt because my mother moved here to help me, a single mom with four kids. I only got two weeks with her here in Louisville … a city she knew nothing about,” Alia Chambers told CNN. “I’m heartbroken. I hated him. I hated him but I forgive him because my mama is in a better place.”

    Farmer moved to Louisville from Henderson, Kentucky, and was thrilled to begin her role with Old National Bank as a loan officer.

    “My mom went from working at 19 years old at Kmart to sitting with executives at a bank. I’m gonna fulfill my mama’s dream. Either I’m going back to nursing school or I’m gonna ask them, can I take over her position at that bank,” she said. “She was so excited about that job. She was happy.”

    Farmer had three adult children and four grandsons, Chambers said.

    The day before she was killed, she found out her son, J’Yeon Chambers, was expecting a baby girl, he told CNN. The baby is due in September, the same month his mother was born.

    “And so it’s just crazy how she gets taken the day after we reveal that we’re having the baby. So my child is going to be her basically all over again,” her son said. “She gave us the name that she always wanted a girl to be named and we’re going to stick with it.”

    The new details come as CNN has learned more about the victims and wounded in Monday’s workplace mass shooting, including the survival of a woman who was seated between two people who were killed.

    Sturgeon, a 25-year-old Old National Bank employee, opened fire with an AR-15-style rifle in the bank about a half-hour before it was to open to the public, killing five colleagues before he was fatally shot by a responding officer. Farmer, Joshua Barrick, Tommy Elliott, Deana Eckert and James Tutt were shot and killed, police said.

    Of the eight people who were wounded, a 26-year-old police officer remains in critical condition after being shot in the head, requiring brain surgery.

    One woman who was shot but survived was seated in a conference room between Farmer and Elliott when the attack began, according to the father of her children, Rex Minrath.

    Dana Mitchell, an employee at the bank, has returned home from the hospital and is recovering, Minrath told CNN in a phone interview Thursday. She is expected to have surgery in the coming weeks to remove “the rest of the bullet,” he said.

    “Dana was in the conference room between Tommy and Juliana. She sat between those two,” Minrath told CNN. “And then when they hit the ground, they were all on the ground together. She is fortunate because both of them weren’t so lucky.”

    Mitchell’s son, Ross Minrath, posted a series of images and updates about his mother’s condition on his Facebook page this week.

    “After positive results from blood work and her being an all around badass, my Mom was released from the hospital today,” he wrote on Tuesday night. “She is very sore but doing well. Her phone has been at the bank and hopes to start reaching out herself tomorrow.”

    In one Facebook post, he said the gunshot bruised her lung and that doctors were able to clean the wound on her back. His mother, he added, “is the toughest I’ve ever known.”

    He thanked those who had reached out to the family with well wishes and asked for people to continue to send prayers for his mother.

    In addition, the first person who was shot inside the bank survived, a city official told CNN. In the shooter’s Instagram livestream of the attack, which has since been taken down, the female bank worker said “good morning” before the gunman warned her, “You need to get out of here,” according to an official familiar with the video.

    The woman had her back to the gunman as he struggled to get the safety off and load his AR-15-style weapon properly. He then shot her in the back, an official previously told CNN.

    beshear

    Gov. Beshear shares emotional memories of his friend killed in Louisville shooting

    At a vigil Wednesday evening, scores of residents and officials gathered to mourn publicly the employees gunned down at their workplace by a coworker.

    “It’s important that we take time to acknowledge those losses and what they mean for us as people and as a community,” Louisville Mayor Craig Greenberg said during the vigil at the Muhammad Ali Center Plaza. “So, that later we can gather our energies and focus on preventing these tragedies.”

    Greenberg noted the heartbreaking impacts of gun violence in his city beyond Monday’s carnage, which unfolded less than a mile from where the vigil was held Wednesday.

    “There will be a time to act. To take steps in honor of those we’ve lost and to channel our grief and pain into meaningful action. That day is coming,” the mayor continued. “Today is to mourn, to lean on each other and support each other.”

    Kentucky Gov. Andy Beshear said at the vigil that Elliott, a senior vice president at the bank, was one of his closest friends.

    “I’ll admit that while I am not angry, I am empty. And I’m sad. And I just keep thinking that maybe we’ll wake up,” Beshear said, his voice breaking.

    “What I know is, I just wish I’d taken an extra moment, made an extra call, tell him how much I care about him. And I know we are all feeling the same. But I also know they hear us now. And that they feel our love,” Beshear said.

    Louisville Body Cam

    Video shows officers walking head-on into gunfire to stop Louisville shooter

    Louisville police on Wednesday released a series of 911 calls showing the fear and panic both inside and outside the bank during the shooting early Monday morning.

    In one emergency call, a woman who identified herself as an employee of a different Old National Bank branch told the dispatcher she saw the massacre happen in real time while she was on a video call with colleagues at the scene.

    “How do you know you have an active shooter on site?” the operator asked.

    “I just watched it. I just watched it on a Teams meeting. We were having a board meeting,” she said. “I saw somebody on the floor. We heard multiple shots and people started saying ‘Oh my God,’ and then he came into the board room.”

    Another 911 call came from the gunman’s mother, who said her son was headed to the bank with a gun and expressed her shock and confusion.

    “My son might be (redacted) has a gun and heading to the Old National on Main Street here in Louisville,” she said. “This is his mother. I’m so sorry, I’m getting details secondhand. I’m learning about it now. Oh my Lord.”

    The woman said her son “apparently left a note” about the incident. “We don’t even own guns. I don’t know where he would have gotten a gun.”

    Other calls came from a bank employee speaking in a whisper who was hiding in a closet, a man who fled the building and took shelter at a nearby dental office, and another caller who hid under a desk inside the building.

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  • Silicon Valley Bank collapse renews calls to address disparities impacting entrepreneurs of color | CNN Business

    Silicon Valley Bank collapse renews calls to address disparities impacting entrepreneurs of color | CNN Business

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    CNN
     — 

    When customers at Silicon Valley Bank rushed to withdraw billions of dollars last month, venture capitalist Arlan Hamilton stepped in to help some of the founders of color who panicked about losing access to payroll funds.

    As a Black woman with nearly 10 years of business experience, Hamilton knew the options for those startup founders were limited.

    SVB had a reputation for servicing people from underrepresented communities like hers. Its failure has reignited concerns from industry experts about lending discrimination in the banking industry and the resulting disparities in capital for people of color.

    Hamilton, the 43-year-old founder and managing partner of Backstage Capital, said that when it comes to entrepreneurs of color, “we’re already in the smaller house. We already have the rickety door and the thinner walls. And so, when a tornado comes by, we’re going to get hit harder.”

    Established in 1983, the midsize California tech lender was America’s 16th largest bank at the end of 2022 before it collapsed on March 10. SVB provided banking services to nearly half of all venture-backed technology and life-sciences companies in the United States.

    Hamilton, industry experts and other investors told CNN the bank was committed to fostering a community of minority entrepreneurs and provided them with both social and financial capital.

    SVB regularly sponsored conferences and networking events for minority entrepreneurs, said Hamilton, and it was well known for funding the annual State of Black Venture Report spearheaded by BLK VC, a nonprofit organization that connects and empowers Black investors.

    “When other banks were saying no, SVB would say yes,” said Joynicole Martinez, a 25-year entrepreneur and chief advancement and innovation officer for Rising Tide Capital, a nonprofit organization founded in 2004 to connect entrepreneurs with investors and mentors.

    Martinez is also an official member of the Forbes Coaches Council, an invitation-only organization for business and career coaches. She said SVB was an invaluable resource for entrepreneurs of color and offered their clients discounted tech tools and research funding.

    Minority business owners have long faced challenges accessing capital due to discriminatory lending practices, experts say. Data from the Small Business Credit Survey, a collaboration of all 12 Federal Reserve banks, shows disparities on denial rates for bank and nonbank loans.

    In 2021, about 16% of Black-led companies acquired the total amount of business financing they sought from banks, compared to 35% of White-owned companies, the survey shows.

    “We know there’s historic, systemic, and just blatant racism that’s inherent in lending and banking. We have to start there and not tip-toe around it,” Martinez told CNN.

    Asya Bradley is an immigrant founder of multiple tech companies like Kinley, a financial services business aiming to help Black Americans build generational wealth. Following SVB’s collapse, Bradley said she joined a WhatsApp group of more than 1,000 immigrant business founders. Members of the group quickly mobilized to support one another, she said.

    Immigrant founders often don’t have Social Security numbers nor permanent addresses in the United States, Bradley said, and it was crucial to brainstorm different ways to find funding in a system that doesn’t recognize them.

    “The community was really special because a lot of these folks then were sharing different things that they had done to achieve success in terms of getting accounts in different places. They also were able to share different regional banks that have stood up and been like, ‘Hey, if you have accounts at SVB, we can help you guys,’” Bradley said.

    Many women, people of color and immigrants opt for community or regional banks like SVB, Bradley says, because they are often rejected from the “top four banks” — JPMorgan Chase, Bank of America, Wells Fargo and Citibank.

    In her case, Bradley said her gender might have been an issue when she could only open a business account at one of the “top four banks” when her brother co-signed for her.

    “The top four don’t want our business. The top four are rejecting us consistently. The top four do not give us the service that we deserve. And that’s why we’ve gone to community banks and regional banks such as SVB,” Bradley said.

    None of the top four banks provided a comment to CNN. The Financial Services Forum, an organization representing the eight largest financial institutions in the United States has said the banks have committed millions of dollars since 2020 to address economic and racial inequality.

    Last week, JPMorgan Chase CEO Jamie Dimon told CNN’s Poppy Harlow that his bank has 30% of its branches in lower-income neighborhoods as part of a $30 billion commitment to Black and Brown communities across the country.

    Wells Fargo specifically pointed to its 2022 Diversity, Equity, and Inclusion report, which discusses the bank’s recent initiatives to reach underserved communities.

    The bank partnered last year with the Black Economic Alliance to initiate the Black Entrepreneur Fund — a $50 million seed, startup, and early-stage capital fund for businesses founded or led by Black and African American entrepreneurs. And since May 2021, Wells Fargo has invested in 13 Minority Depository Institutions, fulfilling its $50 million pledge to support Black-owned banks.

    Black-owned banks work to close the lending gap and foster economic empowerment in these traditionally excluded communities, but their numbers have been dwindling over the years, and they have far fewer assets at their disposal than the top banks.

    OneUnited Bank, the largest Black-owned bank in the United States, manages a little over $650 million in assets. By comparison, JPMorgan Chase manages $3.7 trillion in assets.

    Because of these disparities, entrepreneurs also seek funding from venture capitalists. In the early 2010s, Hamilton intended to start her own tech company — but as she searched for investors, she saw that White men control nearly all venture capital dollars. That experience led her to establish Backstage Capital, a venture capital fund that invests in new companies led by underrepresented founders.

    “I said, ‘Well, instead of trying to raise money for one company, let me try to raise for a venture fund that will invest in underrepresented — and now we call them underestimated — founders who are women, people of color, and LGBTQ specifically,’ because I am all three,” Hamilton told CNN.

    Since then, Backstage Capital has amassed a portfolio of nearly 150 different companies and has made over 120 diversity investments, according to data from Crunchbase.

    But Bradley, who is also an ‘angel investor’ of minority-owned businesses, said she remains “really hopeful” that community banks, regional banks and fintechs “will all stand up and say, ‘Hey, we are not going to let the good work of SVB go to waste.’”

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  • Still haven’t filed your taxes? Here’s what you need to know | CNN Business

    Still haven’t filed your taxes? Here’s what you need to know | CNN Business

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    New York
    CNN
     — 

    So far this tax season, the IRS has received more than 90 million income tax returns for 2022.

    That means tens of millions of households have yet to file their returns. If yours is among them, here are some last-minute tax-filing tips to keep in mind as the Tuesday, April 18 deadline approaches.

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file by next Tuesday, fill out Form 4868 electronically or on paper and send it in by April 18. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by Tuesday.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

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  • JPMorgan executives knew about sex abuse claims against then-client Jeffery Epstein, court filing alleges | CNN Business

    JPMorgan executives knew about sex abuse claims against then-client Jeffery Epstein, court filing alleges | CNN Business

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    New York
    CNN
     — 

    A new court filing alleges JPMorgan Chase executives were aware of sex abuse and trafficking allegations against its then-client Jeffrey Epstein, several years before the financial institution cut ties.

    The latest complaint, part of a lawsuit against the bank filed by the attorney general for the US Virgin Islands (USVI), adds an additional count alleging that JPMorgan obstructed federal law enforcement and prosecuting agencies pursuing Epstein.

    “JP Morgan’s relationship with Epstein in allowing his sex-trafficking venture to access large sums of cash each year went far beyond a normal (and lawful) banking relationship,” the filing says, adding that bank executives were also aware of potentially suspicious cash withdrawals.

    Epstein, 66, was a client of the financial institution until 2013. He was found dead in a New York prison in August 2019.

    Epstein was awaiting trial on federal charges accusing him of operating a sex trafficking ring from 2002 to 2005 at his Manhattan mansion and his Palm Beach estate, in which he paid girls as young as 14 for sex.

    The new complaint against JP Morgan, filed Wednesday, comes days after its CEO Jamie Dimon sat down with CNN’s Poppy Harlow in an exclusive interview.

    Dimon told Harlow that “hindsight is a fabulous gift,” when asked whether the bank should have acted sooner after Epstein entered a guilty plea to soliciting prostitution with a minor in Florida in 2008.

    A JP Morgan spokesperson declined to comment to CNN about the newly filed complaint, which was part of the lawsuit filed in December.

    Attorneys for JP Morgan have denied the allegations. They accused the USVI government of looking for “deeper pockets,” according to court filings.

    The amended complaint details internal email exchanges and documents, alleging several examples that refute Dimon’s suggestion that the financial institution needed “hindsight” regarding Epstein.

    According to the filing, JPMorgan executive Mary Erdoes “admitted in her deposition that JPMorgan was aware by 2006 that Epstein was accused of paying cash to have underage girls and young women brought to his home.”

    “Mary Erdoes testified that JP Morgan terminated Epstein as a customer in 2013 after she became aware that the withdrawals were ‘actual cash,’” the filing alleged. Erdoes’ deposition was taken last month.

    In addition, the filing claims that the JPMorgan Rapid Response Team noted in 2006 that Epstein “routinely” made cash withdrawals in amounts from $40,000 to $80,000 several times per month, totaling over $750,000 per year. Officials concluded that year that “his account ‘should be classified as high risk’ and require special approval.”

    Internal emails quoted in the filing show JP Morgan employees including senior executives discussed coverage of the Epstein allegations for years after 2006 until he was terminated as a client seven years later. High level bank officials also met about Epstein’s account and the allegations against him as far back as 2008, according to the court filing.

    In 2010, the company’s risk management division flagged Epstein’s official status as a sex offender. That was two years after he pleaded guilty to solicitation of prostitution with a minor in 2008 and spent about 13 months in prison.

    “See below new allegations of an investigation related to child trafficking – are you still comfortable with this client who is now a registered sex offender,” according to an email in the newly unredacted portions of the court filing.

    Ghislaine Maxwell, a longtime confidante of Epstein’s who was also a JP Morgan client, was flagged in 2011 by the bank’s anti-money laundering compliance director when she allegedly sought to open an account for a “personal recruitment consulting business.”

    “What does she mean by personal recruitment? Are you sure this will have nothing to do with Jeffrey? If you want to proceed, I suggest that we flag this as a High Risk Client,” the director wrote in an internal email.

    Also that year, a senior compliance official reviewing JP Morgan’s information on Epstein called him a “sugar daddy,” noting his sponsorship of private bank accounts and credit cards for two 18-year-olds “that appear to be part of his inner entourage,” the lawsuit says.

    Last month, a federal district judge presiding over the case in Manhattan ruled that the lawsuit against JPMorgan could move forward, partially denying the bank’s motion to dismiss the suit.

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  • Kentucky Gov. Andy Beshear on Louisville bank gunman: ‘This person murdered my friend’ | CNN Politics

    Kentucky Gov. Andy Beshear on Louisville bank gunman: ‘This person murdered my friend’ | CNN Politics

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    Watch Kaitlan Collins’ full interview with Kentucky Gov. Andy Beshear tonight at 9 p.m. ET on CNN.



    CNN
     — 

    Kentucky Gov. Andy Beshear said Wednesday he “can’t imagine” what the family of the man who killed five people, including a friend of the governor, in Louisville on Monday is feeling.

    Beshear’s comments, made during an emotional interview with CNN’s Kaitlan Collins which was his first since the mass shooting, came after the 911 call placed by the gunman’s mother was released.

    “This person murdered my friend. But still, I can’t imagine what his parents must be feeling right now,” Beshear said.

    The call by the mother of the gunman, 25-year-old Old National Bank employee Connor Sturgeon, was among a number of 911 calls released to the public Wednesday detailing the panic and fear during the mass shooting that left five dead and three hospitalized.

    Relaying details from her son’s roommate, she said her son “apparently left a note” and expressed her shock and confusion.

    “My son might be (redacted) has a gun and heading to the Old National on Main Street here in Louisville,” she said in the call. “This is his mother. I’m so sorry, I’m getting details secondhand. I’m learning about it now. Oh my Lord.”

    In the interview with CNN, Beshear discussed his friend Tommy Elliott, a bank executive who was among the victims of Monday’s shooting. He said he wanted his friend to be remembered as a loving father and husband.

    “Man, he had a great smile. His eyes lit up. Loved life. Was always into something. Trying to make the city a better place, he was just always into something,” he said.

    Elliott, the bank’s senior vice president, had chaired Beshear’s 2019 inaugural committee and was a well-known figure in Kentucky Democratic politics.

    “He was trying to plan for me for when I’m done being governor, which was something that I hoped we could eventually plan for together,” Beshear said. “An amazing human being, a loving dad.”

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  • ‘Our city is heartbroken’: Louisville holding vigil today to mourn 5 killed in bank shooting | CNN

    ‘Our city is heartbroken’: Louisville holding vigil today to mourn 5 killed in bank shooting | CNN

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    CNN
     — 

    Louisville is set to host a vigil Wednesday to let community members grieve the five people killed this week in a downtown bank shooting, as the public absorbs fresh details that investigators are releasing about how the massacre unfolded.

    The vigil comes a day after police released dramatic police body camera footage of Monday’s shooting at Old National Bank, in which authorities say a 25-year-old employee opened fire on his colleagues who were in a staff meeting and then engaged in a shootout with police before he was shot dead.

    The attacker killed five of his coworkers around 8:30 a.m. in Kentucky’s most populous city, about 30 minutes before the facility was to open, a gruesome assault that the shooter livestreamed online, authorities said. Several others were hospitalized, including a rookie police officer who was shot in the head and was in critical condition Tuesday.

    “Our city is heartbroken,” Louisville Mayor Craig Greenberg told CNN’s Wolf Blitzer on Tuesday evening. “These five victims should not be dead – just like everyone else who was killed by gun violence in our city, in our country, should not be dead.”

    Police say they’re still trying to determine the shooter’s motive. As an investigation continues, officials expect to release audio Wednesday of 911 calls about the shooting, the mayor said.

    And the city will hold a vigil at 5 p.m. Wednesday at the Muhammad Ali Center in Louisville, the mayor said.

    The vigil will “acknowledge the wounds, physical and emotional, that gun violence leaves behind,” Greenberg told reporters Tuesday. “It will be an interfaith opportunity for our entire community to come together – to grieve, to heal, to begin to move forward.”

    On Tuesday, Louisville police released bodycam video from the officers who responded to yet another mass shooting in the US.

    The public footage begins with a video from Officer Nickolas Wilt – a 26-year-old rookie who’d graduated from a police academy just 10 days prior – who drove up to the scene with his training officer, Cory “CJ” Galloway.

    As Wilt ran toward the gunshots that officers faced upon arrival, Wilt was shot in the head, police said. The released version of Wilt’s footage cuts off before he is shot.

    Body camera footage from Galloway shows him taking fire, and then retreating to a safe position behind a planter as officers talk about how they can’t see the gunman, and that the gunman is shooting through windows in the front of the bank. At some point, Galloway was also shot.

    Police eventually took down the shooter after he broke the bank’s lobby glass windows, giving officers a vision on his location, Deputy Chief Paul Humphrey said.

    The entire situation – from when the gunman began firing his assault weapon to when he was killed by police – lasted for about nine minutes, according to Louisville police Lt. Col. Aaron Cromwell.

    Those killed in the shooting were Joshua Barrick, 40; Juliana Farmer, 45; Deana Eckert, 57; Tommy Elliott, 63; and James Tutt, 64, police said.

    Nine people – including Eckert, before she died Monday – were hospitalized after the shooting, officials said. Among the eight current survivors, five had been discharged as of Tuesday, a hospital spokesperson said.

    The three victims who remain hospitalized include Wilt, who underwent brain surgery and was in critical condition Tuesday, and two others who were in fair condition, the hospital spokesperson said.

    Monday’s massacre in Louisville was one of at least 147 mass shootings this year in the US, according to the Gun Violence Archive, which like CNN defines a mass shooting as four or more people shot, not including the shooter.

    It took the assailant one minute to complete the bloodbath before he stopped and waited for police to arrive, according to footage of the massacre described by a city official to CNN.

    The shooter, identified by police as 25-year-old Connor Sturgeon, had livestreamed the gruesome attack on Instagram – the video has since been taken down.

    The Instagram video begins by showing an AR-15-style weapon, followed by a worker in the bank saying good morning to the gunman, the official said.

    The gunman then tries to shoot her in the back but fails because the safety is on and the weapon still needs to be loaded, the official said. Once the shooter loads the weapon properly and takes the safety off, he shoots the worker in the back, the official said.

    The assailant then continues his rampage, firing at workers while they tried to outrun him, the official said. The shooter does not go to other populated floors of the bank, the official said.

    Once the shooter finishes firing, he sits in the lobby area that looks out onto the street, apparently waiting for police, the official said.

    Police arrive about a minute and half later, the official said, at which point a gunfire exchange ensues before police eventually shoot and kill the gunman.

    Sturgeon used an AR-15-style rifle in the shooting, police said. Six days before the killings, he legally purchased the rifle from a local gun dealership, the interim Louisville police chief said Tuesday.

    Sturgeon had interned at the bank for three summers and been employed there full-time for about two years, his LinkedIn profile showed. The assailant had been notified that he was going to be fired from the bank, a law enforcement source said Monday.

    The mayor, however, said doesn’t believe the shooter was given a notice of termination.

    “From what I have been told from an official at the bank, that is not accurate,” Greenberg told reporters Tuesday.

    A former high school classmate of Sturgeon’s who knew him and his family well said he never saw any “sort of red flag or signal that this could ever happen.”

    “This is a total shock. He was a really good kid who came from a really good family,” said the classmate, who asked not to be identified and has not spoken with Sturgeon in recent years. “I can’t even say how much this doesn’t make sense. I can’t believe it.”

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  • IMF: Banking crisis boosts risks and dims outlook for world economy | CNN Business

    IMF: Banking crisis boosts risks and dims outlook for world economy | CNN Business

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    London
    CNN
     — 

    At the start of the year, economists and corporate leaders expressed optimism that global economic growth might not slow down as much as they had feared. Positive developments included China’s reopening, signs of resilience in Europe and falling energy prices.

    But a crisis in the banking sector that emerged last month has changed the calculus. The International Monetary Fund downgraded its forecasts for the global economy Tuesday, noting “the recent increase in financial market volatility.”

    The IMF now expects economic growth to slow from 3.4% in 2022 to 2.8% in 2023. Its estimate in January had been for 2.9% growth this year.

    “Uncertainty is high, and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled,” the organization said in its latest report.

    Fears about the economic outlook have increased following the failures in March of Silicon Valley Bank and Signature Bank, two regional US lenders, and the loss of confidence in the much-larger Credit Suisse

    (CS)    , which was sold to rival UBS in a government-backed rescue deal.

    Already, the global economy was grappling with the consequences of high and persistent inflation, the rapid rise in interest rates to fight it, elevated debt levels and Russia’s war in Ukraine.

    Now, concerns about the health of the banking industry join the list.

    “These forces are now overlaid by, and interacting with, new financial stability concerns,” the IMF said, noting that policymakers trying to tame inflation while averting a “hard landing,” or a painful recession, “may face difficult trade-offs.”

    Global inflation, which the IMF said was proving “much stickier than anticipated,” is expected to fall from 8.7% in 2022 to 7% this year and to 4.9% in 2024.

    Investors are looking for additional pockets of vulnerability in the financial sector. Meanwhile, lenders may turn more conservative to preserve cash they may need to deal with an unpredictable environment.

    That would make it harder for businesses and households to access loans, weighing on economic output over time.

    “Financial conditions have tightened, which is likely to entail lower lending and activity if they persist,” said the IMF, which hosts its spring meeting alongside the World Bank this week.

    If another shock to the world’s financial system results in a “sharp” deterioration in financial conditions, global growth could slow to 1% this year, the IMF warned. That would mean “near-stagnant income per capita.” The group put the probably of this happening at about 15%.

    The IMF acknowledged forecasting was difficult in this climate. The “fog around the world economic outlook has thickened,” it said.

    And it warned that weak growth would likely persist for years. Looking ahead to 2028, global growth is estimated at 3%, the lowest medium-term forecast since 1990.

    The IMF said this sluggishness was attributable in part to scarring from the pandemic, aging workforces and geopolitical fragmentation, pointing to Britain’s decision to leave the European Union, economic tensions between the United States and China and Russia’s invasion of Ukraine.

    Interest rates in advanced economies are likely to revert to their pre-pandemic levels once the current spell of high inflation has passed, the IMF also said.

    The body’s forecast for global growth this year is now closer to that of the World Bank. David Malpass, the outgoing World Bank president, told reporters Monday that the group now saw a 2% expansion in output in 2023, up from 1.7% predicted in January, Reuters has reported.

    In a separate report published Tuesday, the IMF said that while the rapid increase in interest rates was straining banks and other financial firms, there were fundamental differences from the 2008 global financial crisis.

    Banks now have much more capital to be able to withstand shocks. They also have curbed risky lending due to stricter regulations.

    Instead, the IMF pointed to similarities between the latest banking turmoil and the US savings and loan crisis in the 1980s, when trouble at smaller institutions hurt confidence in the broader financial system.

    So far, investors are “pricing a fairly optimistic scenario,” the IMF noted in a blog based on the report, adding that access to credit was actually greater now than it had been in October.

    “While market participants see recession probabilities as high, they also expect the depth of the recession to be modest,” the IMF said.

    Yet those expectations could be quickly upended. If inflation rises further, for example, investors could judge that interest rates will stay higher for longer, the group wrote in the blog.

    “Stresses could then reemerge in the financial system,” it noted.

    That bolsters the need for decisive action by policymakers, the IMF said. It called for gaps in supervision and regulation to “be addressed at once,” citing the need in many countries for stronger plans to wind down failed banks and for improvements to deposit insurance programs.

    — Olesya Dmitracova contributed to this report.

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  • Shares in Regal Cinemas’ owner hit all-time low | CNN Business

    Shares in Regal Cinemas’ owner hit all-time low | CNN Business

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    London
    CNN
     — 

    Cineworld’s stock plummeted 36% Tuesday afternoon to an all-time low after the company said it had filed a plan to reorganize its business and shareholders would not recover any of their funds.

    The embattled owner of Regal Cinemas said it had submitted a final version of the plan to a US bankruptcy court in Texas. It first announced details of the proposal on April 3.

    The company said already back in February that it expected shareholders to be wiped out entirely by the bankruptcy process, even if it sold some of its businesses.

    “The proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests,” the company confirmed in a statement Tuesday.

    Under the plan, Cineworld’s lenders will cut its debt by $4.5 billion in exchange for equity in the reorganized company.

    Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, described the market reaction to Cineworld’s announcement Tuesday as “severe.”

    Confirmation of the plan had “extinguished any remaining hope from shareholders that this route could be avoided,” she told CNN.

    Like many of its competitors, the world’s second-biggest movie theater operator was hit hard by the pandemic, reporting a combined loss of $3.3 billion over 2020 and 2021. It filed for Chapter 11 bankruptcy in the United States in September.

    Cineworld shares have lost 98% of their value since the company listed on the London Stock Exchange in 2007. They were last trading at 1.1 pence (1.4 cents).

    The stock closed 33% lower on April 3 after the company announced its reorganization plan and said it would halt all efforts to sell its US, UK and Irish businesses.

    Tuesday’s stock declines came as “remaining equity holders rushed to sell their shares in an attempt to recoup something,” Victoria Scholar, head of investment at Interactive Investor, an online trading platform, told CNN.

    Cineworld reiterated that it hoped the restructuring plan — which the court and some of the company’s creditors have yet to approve — would help it emerge from Chapter 11 bankruptcy in the first half of this year. In the meantime, Cineworld said, its movie theaters will continue to operate “as usual without interruption.”

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  • As Louisville police investigate what led up to bank shooting that left 5 dead, several victims remain hospitalized | CNN

    As Louisville police investigate what led up to bank shooting that left 5 dead, several victims remain hospitalized | CNN

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    CNN
     — 

    As Louisville investigators piece together what led up to a mass shooting inside a downtown bank that left five people dead, several victims remain hospitalized, including a police officer in critical condition after a shootout with the 25-year-old gunman.

    The gunman, identified by police as employee Connor Sturgeon, was livestreaming online as he carried out the shooting at Old National Bank, officials said. He opened fire inside a conference room during a morning staff meeting, Rebecca Buchheit-Sims, a manager at the bank, told CNN.

    Buchheit-Sims, who was attending the meeting virtually, watched in horror as the shooting played out on her computer screen, saying the incident “happened very quickly.”

    “I witnessed people being murdered. I don’t know how else to say that,” she said.

    One of the hospitalized victims, 57-year-old Deana Eckert, died later Monday, police announced, though it is unclear if she was among the three people in critical condition earlier in the day.

    The four other victims, who died Monday morning, were identified by police as Joshua Barrick, 40; Juliana Farmer, 45; Tommy Elliott, 63; and James Tutt, 64.

    Sturgeon, whose LinkedIn profile showed he had interned at the bank for three summers and been employed there full-time for close to two years, had been notified that he was going to be fired from his job at the bank, according to a law enforcement source familiar with the investigation.

    The source said the gunman left behind a note for his parents and a friend indicating he planned to carrying out a shooting at his workplace, though it is unclear when the message was found.

    The gunman, who was still firing when police arrived, was killed in a shootout with officers, police officials said. At least two officers, including one who was shot in the head, were injured during the gunfire.

    Monday’s massacre is the 146th mass shooting so far this year, according to the Gun Violence Archive, as such tragedies continue to strike at the hearts of American communities while they go about their daily lives. It also falls exactly two weeks after three children and three adults were killed in a shooting at a Christian school in neighboring Tennessee, fueling a fierce fight between Democratic and Republican state lawmakers over gun control.

    Kentucky Gov. Andy Beshear has ordered flags across the state to fly at half-staff until Friday evening in honor of the victims, but some Democratic lawmakers are concerned that the expressions of grief will come and go without meaningful gun violence solutions.

    “My worry is that everybody will raise their fists in anger and mourn and then in six weeks, eight weeks we go back to doing the same – nothing,” state Sen. David Yates told CNN Monday. “I hope that they all don’t have to die in vain like so many of the other victims of these mass shootings. Maybe something positive can come from it.”

    President Joe Biden also echoed his repeated push for gun reform legislation and called on Republican lawmakers to take action.

    “Too many Americans are paying for the price of inaction with their lives. When will Republicans in Congress act to protect our communities?,” the president said in a tweet.

    Members of the Old National Bank executive team, including CEO Jim Ryan, were in Louisville Monday on the heels of the shooting, the company said on Facebook.

    “As we await more details, we are deploying employee assistance support and keeping everyone affected by this tragedy in our thoughts and prayers,” Ryan said in a statement that morning.

    Two people embrace outside the building where a mass shooting happened in Louisville on Monday.

    The shooting began around 8:30 a.m., police said, about 30 minutes before the bank opens to the public. Bank staff were holding their morning meeting in a conference room when the shooter opened fire, Buchheit-Sims, the bank manager, said.

    One bank employee frantically called her husband as she sheltered inside a locked vault, the husband, Caleb Goodlett told CNN affiiliate WLKY. By the time he called 911, police were already aware of the shooting, he said.

    “Just a very traumatic phone call to get,” Goodlett told the affiliate, adding that he has since seen his wife and she is okay.

    The gunman died at the scene after being shot by police during an exchange of gunfire, officials said.

    Nickolas Wilt, a 26-year-old rookie officer, ran toward the gunfire and was shot in the head, interim Louisville Metro Police Chief Jacquelyn Gwinn-Villaroel said. He had graduated from the police academy just 10 days before the shooting.

    Wilt underwent brain surgery and was in critical but stable condition as of Monday afternoon, the chief said.

    The gun used in the shooting was an AR-15-style rifle, a federal law enforcement source told CNN. The semi-automatic rifle is the most popular sporting rifle in the US, and 30% of gun owners reported having owned an AR-15 or similar-style rifle, according to the 2021 National Firearms Survey. The AR-15 and its offshoots have been the weapon of choice in many of the most horrific mass shootings in recent memory, including the Covenant school shooting in Nashville just two weeks ago.

    The bank sits on the fringe of Louisville’s developing downtown business district, state Sen. Gerald Neal, who represents the district where the shooting happened, told CNN. “You wouldn’t really expect anything to happen at this location,” he said.

    Despite the shock of the shooting in Kentucky’s most populated city, Neal believes discussions about gun control in the state will still be an “uphill battle.”

    “This is not a state that’s friendly to those who would think about gun reform … or gun control in some way or even reasonable, as you might consider, gun steps that we could take in terms of restricting them. This is not that state. However, the effort continues.”

    Thomas Elliott

    One of the shooting victims, bank senior vice president Tommy Elliot, was remembered by several local and state leaders as a close mentor and beloved community leader.

    “Tommy was a great man. He cared about finding good people and putting them in positions to do great things. He embraced me when I was very young and interested in politics,” state senator Yates told CNN. “He was about lifting people up, building them up.”

    Elliot was also close friends with Gov. Beshear and Louisville Mayor Craig Greenberg, who said he spent Monday morning at the hospital with Elliot’s wife.

    “It is painful, painful for all of the families I know,” Greenberg said while speaking with CNN’s Jake Tapper. “It just hits home in a unique way when you know one of the victims so well.”

    Beshear remembered Elliot an “incredible friend” and also called the others who were killed “amazing people” who will be missed and mourned by their communities.

    The city is setting up a family assistance center in collaboration with the American Red Cross to provide support for those impacted, Greenberg said.

    “To the survivors and the families, our entire city is here to wrap our arms around you,” Greenberg added.

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