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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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  • What markets are watching after digesting the US jobs data | CNN Business

    What markets are watching after digesting the US jobs data | 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
     — 

    In an unusual coincidence, the US jobs report was released on a holiday Friday — meaning stock markets were closed when the closely-watched economic data came out.

    It was the first monthly payroll report since Silicon Valley Bank and Signature Bank collapsed. It also marked a full year of jobs data since the Federal Reserve began hiking interest rates in March 2022.

    While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient.

    Investors have had a long weekend to chew over the details of the report and will likely skip the typical gut-reaction to headline numbers.

    What happened: The US economy added 236,000 jobs in March, showing that hiring remained robust though the pace was slower than in previous months. The unemployment rate currently stands at 3.5%.

    Wages increased by 0.3% on the month and 4.2% from a year ago. The three-month wage growth average has dropped to 3.8%. That’s moving closer to what Fed policymakers “believe to be in line with stable wage and inflation expectations,” wrote Joseph Brusuelas, chief economist at RSM in a note.

    “That wage data tends to suggest that the risk of a wage price spiral is easing and that will create space in the near term for the Federal Reserve to engage in a strategic pause in its efforts to restore price stability,” he added.

    The March jobs report was the last before the Fed’s next policy meeting and announcement in early May. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out.

    At the same time Wall Street is beginning to see bad news as bad news. A slowing economy could mean a recession is forthcoming.

    Markets are still largely expecting the Fed to raise rates by another quarter point. So how will they react to Friday’s report?

    Before the Bell spoke with Michael Arone, State Street Global Advisors chief investment strategist, to find out.

    This interview has been edited for length and clarity.

    Before the Bell: How do you expect markets to react to this report on Monday?

    Michael Arone: I think that this has been a nice counterbalance to the weaker labor data earlier last week and all the recession fears. This data suggests that the economy is still in pretty good shape, 10-year Treasury yields increased on Friday indicating there’s less fear about an imminent recession.

    There’s this delicate balance between slower job growth and a weaker labor market without economic devastation. I think this report helps that.

    As it relates to the stock market, I would expect the cyclical sectors to do well — your industrials, your materials, your energy companies. If interest rates are rising, that’s going to weigh on growth stocks — technology and communication services sectors, for example. Less recession fears will mean investors won’t be as defensively positioned in classic staples like healthcare and utilities.

    Could this lead to a reverse in the current trend where tech companies are bolstering markets?

    Yes, exactly. It’s difficult to make too much out of any singular data point, but I think this report will hopefully lead to broader participation in the stock market. If those recession fears begin to abate somewhat, and investors recognize that recession isn’t imminent, there will be more investment.

    What else are investors looking at in this report?

    We’ve seen weakness in the interest rate sensitive parts of the market — areas that are typically the first to weaken as the economy slows down. So things like manufacturing, things like construction. That’s where the weakness in this jobs report is. And the services areas continue to remain strong. That’s where the shortage of qualified skilled workers remains. I think that you’re seeing continued job strength in those areas.

    What does this mean for this week’s inflation reports? It seems like the jobs report just pushed the tension forward.

    it did. I expect that inflation figures will continue to decelerate — or grow at a slower rate. But I do think that the sticky part of inflation continues to be on the wage front. And so I think, if anything, this helps alleviate some of those inflation pressures, but we’ll see how it flows through into the CPI report next week. And also the PPI report.

    Is the Federal Reserve addressing real structural changes to the labor market?

    The Fed was confused in February 2020 when we were in full employment and there was no inflation. They’re equally confused today, after raising rates from zero to 5%, that we haven’t had more job losses.

    I’m not sure why, but from my perspective, the Fed hasn’t taken into consideration the structural changes in the labor force, and they’re still confused by it. I think the risk here is that they’ll continue to focus on raising rates to stabilize prices, perhaps underestimating the kind of structural changes in the labor economy that haven’t resulted in the type of weakness that they’ve been anticipating. I think that’s a risk for the economy and markets.

    A few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry.

    After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

    Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

    Since then, things have gotten worse, CNN’s Julia Horowitz reports.

    In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. A bank run is what toppled Silicon Valley Bank last month, roiling financial markets and raising fears of a recession.

    “We’re watching it pretty closely,” said Michael Reynolds, vice president of investment strategy at Glenmede, a wealth manager. While he doesn’t expect office loans to become a problem for all banks, “one or two” institutions could find themselves “caught offside.”

    Signs of strain are increasing. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

    High-profile defaults are making headlines. Earlier this year, a landlord owned by asset manager PIMCO defaulted on nearly $2 billion in debt for seven office buildings in San Francisco, New York City, Boston and Jersey City.

    Dig into Julia’s story here.

    Tech stocks led market losses in 2022, but seemed to rebound quickly at the start of this year. So as we enter earnings season, what should we expect from Big Tech?

    Daniel Ives, an analyst at Wedbush Securities, says that he has high hopes.

    “Tech stocks have held up very well so far in 2023 and comfortably outpaced the overall market as we believe the tech sector has become the new ‘safety trade’ in this overall uncertain market,” he wrote in a note on Sunday evening.

    Even the recent spate of layoffs in Big Tech has upside, he wrote.

    “Significant cost cutting underway in the Valley led by Meta, Microsoft, Amazon, Google and others, conservative guidance already given in the January earnings season ‘rip the band- aid off moment’, and tech fundamentals that are holding up in a shaky macro [environment] are setting up for a green light for tech stocks.”

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  • Wall Street says bad news is no longer good news. Here’s why | CNN Business

    Wall Street says bad news is no longer good news. Here’s why | 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
     — 

    There’s been a seismic shift in investor perspective: Bad news is no longer good news.

    For the past year, Wall Street has hoped for cool monthly economic data that would encourage the Federal Reserve to halt its aggressive pace of interest rate hikes to tame inflation.

    But at its March meeting — just days after a series of bank failures raised concerns about the economy’s stability — the central bank signaled that it plans to pause raising rates sometime this year. With an end to interest rate hikes in sight, investors have stopped attempting to guess the Fed’s next move and have turned instead to the health of the economy.

    This means that, whereas softening economic data used to signal good news — that the Fed could potentially stop raising rates — now, cooling economic prints simply suggest the economy is weakening. That makes investors worried that the slowing economy could fall into a recession.

    What happened last week? Markets teetered after a slew of economic reports signaled that the red-hot labor market is finally cooling (more on that later), flashing warning signals across Wall Street.

    Investors accordingly shed high-growth, large-cap stocks that have surged recently to rush into defensive stocks in industries like health care and consumer staples.

    While tech stocks recovered somewhat by the end of the short trading week — markets were closed in observance of Good Friday — the Nasdaq Composite still slid 1.1%. The broad-based S&P 500 fell 0.1% and the blue-chip Dow Jones Industrial Average gained 0.6%.

    What does this mean for markets? Now that Wall Street is in “bad news is bad news and good news is good news” mode, it will be looking for signs that the economy remains resilient.

    What hasn’t changed is that investors still want to see cooling inflation data. While the central bank has signaled that it will pause hiking rates this year, its actions so far have only somewhat stabilized prices. The Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, rose 5% for the 12 months ended in February — far above its 2% inflation target.

    Moreover, Wall Street might be overly optimistic about how the Fed will act going forward: Some investors expect the central bank to cut rates several times this year, even though the central bank indicated last month that it does not intend to lower rates in 2023.

    It’s unclear how markets will react if the Fed doesn’t cut rates this year. But there likely won’t be a notable rally unless the central bank pivots or at least indicates that it plans to soon, said George Cipolloni, portfolio manager at Penn Mutual Asset Management.

    Commentary that’s hawkish or reveals inflation worries could hurt markets, he adds. “It keeps that boiling point and that temperature a little high.”

    What comes next? The Fed holds its next meeting in early May. Before then, it will have to parse through several economic reports to get a sense of how the economy is doing, and what it will be able to handle. Markets currently expect the Fed to raise interest rates by a quarter point, according to the CME FedWatch tool.

    The labor market appears to be cooling somewhat, at least according to the slew of data released last week. But it’s still far too early to assume that the job market has lost its strength.

    President Joe Biden said in a statement Friday that the March data is “a good jobs report for hard-working Americans.”

    The March jobs report revealed that US employers added a lower-than-expected 236,000 jobs last month. Economists expected a net gain of 239,000 jobs for the month, according to Refinitiv.

    The unemployment rate dropped to 3.5%, according to the Bureau of Labor Statistics. That’s below expectations of holding steady at 3.6%.

    The jobs report was also the first one in 12 months that came in below expectations.

    But that doesn’t mean that the job market isn’t strong anymore.

    “The labor market is showing signs of cooling off, but it remains very tight,” Bank of America researchers wrote in a note Friday.

    Still, other data released last week help make the case that cracks are finally starting to form in the labor market. The Job Openings and Labor Turnover Survey for February revealed last week that the number of available jobs in the United States tumbled to its lowest level since May 2021. ADP’s private-sector payroll report fell far short of expectations.

    What this means for the Fed is that the cooldown in the latest jobs report likely won’t be enough for the central bank to pause rates at its next meeting.

    “The Fed will more than likely raise rates in May as the labor market continues to defy the cumulative effects of the rate hikes that began over a year ago,” said Quincy Krosby, chief global strategist at LPL Financial.

    Monday: Wholesale inventories.

    Tuesday: NFIB Small Business Optimism Index. Earnings from CarMax (KMX), Albertsons (ACI) and First Republic Bank (FRC).

    Wednesday: Consumer Price Index and FOMC meeting minutes.

    Thursday: OPEC monthly report and Producer Price Index. Earnings from Delta Air Lines (DAL).

    Friday: Retail sales and University of Michigan consumer sentiment survey. Earnings from JPMorgan Chase (JPM), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C) and PNC Financial Services (PNC).

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  • House Oversight Committee quietly issues several new subpoenas as part of Biden family probe | CNN Politics

    House Oversight Committee quietly issues several new subpoenas as part of Biden family probe | CNN Politics

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    CNN
     — 

    House Oversight Chairman James Comer has quietly issued several subpoenas for documents and bank records as part of the Republican-led investigation into the financial dealings of President Joe Biden’s family, according to an internal memo shared among Democrats on the panel.

    The memo, obtained by CNN, reveals new details about the subpoenas issued by Comer as part of the ongoing probe, which has stoked the ire of Democratic members who have accused the Kentucky Republican of covertly investigating business dealings by the president’s son, Hunter Biden.

    “This memorandum serves to ensure that Committee Democrats have access to all relevant information, including the six document subpoenas issued to date,” it says.

    The memo comes a day after the committee’s top Democrat, Maryland Rep. Jamie Raskin, criticized committee Republicans for “shielding information” related to the panel’s investigations. House rules mandate that committee materials are shared between the majority and minority.

    “Committee Republicans’ decision to conduct this probe behind a veil of secrecy runs counter to the Committee’s traditional commitment to transparency and raises serious questions about the integrity of the investigation,” Democrats wrote in the memo.

    According to the Democrats’ memo, subpoenas have been sent to: Bank of America, Cathay Bank, JPMorgan Chase, HSBC USA N.A and Mervyn Yan, a former business associate of Hunter Biden. In most cases the subpoenas to the banks span 14 years and relate to six individuals and 10 different entities, House Democrats say. The business entities covered by the subpoenas include several with ties to China and the energy sector, according to those listed in the memo.

    The subpoena to HSBC was initially sent, and later reissued, after the bank requested an updated cover page, according to a person familiar with the matter. A spokesperson for HSBC declined to comment.

    CNN has reached out to JP Morgan Chase & Co., and an email address associated with Mervyn Yan for comment.

    “Cathay Bank, a NASDAQ-listed, U.S. financial institution for over 60 years, has cooperated with the House Committee on Oversight and Accountability’s request for information,” said a bank spokesperson. “The bank intends to continue to cooperate with the committee.”

    CNN first reported on Comer’s subpoena for Bank of America in March to compel the bank to turn over records relating to three of Hunter Biden’s business associates.

    The six subpoenas listed do not include “friendly” subpoenas Comer has issued to some witnesses, including former Twitter employees, who have testified before the committee.

    “Despite their vast efforts, Committee Republicans have failed to identify any evidence connecting President Biden to or implicating him in the foreign transactions under investigation,” according to the memo from Democrats.

    Comer slammed the Democrats’ memo in a statement on Friday. “Ranking Member Raskin has again disclosed Committee’s subpoenas in a cheap attempt to thwart cooperation from other witnesses,” Comer said. “No one should be fooled by Ranking Member Raskin’s games. We have the bank records, and the facts are not good for the Biden family.”

    Democrats also laid out what they called “inconsistencies” among the investigations that Comer and the panel’s Republican members are interested in pursuing, arguing they are only interested in probing the Biden family, but not do want to investigate similar issues pertaining to former President Donald Trump and his family.

    “To date, Chairman Comer has issued six subpoenas and sent 39 letters in the Biden family investigation alone. Notably, Mr. Comer has failed to issue a single document subpoena in any other Committee investigation this Congress,” Democrats wrote.

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  • The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

    The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

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    New York
    CNN
     — 

    Millions of jobs could be on the chopping block this year, as the Federal Reserve continues its rate-hiking campaign to tame inflation. But the effects of that action likely won’t reverberate evenly across the economy.

    The Fed has seen some success: Inflation has cooled for eighth consecutive months, according to the February Consumer Price Index. The Producer Price Index shows a dramatic drop in wholesale prices in February. And the Fed’s favored inflation gauge, the Personal Consumption Expenditures price index, has also started to moderate.

    But the job market has proved to be a formidable force, humming steadily in the face of climbing rates meant to slow its growth. After adding more than half a million jobs in January, the US economy then added 311,000 jobs in February, with an unemployment rate of 3.6% — just above a half-century low — according to the Bureau of Labor Statistics.

    However, the jobless rate isn’t expected to be that low for long.

    At its most recent policy-making meeting, the Fed released projections for the year ahead that showed unemployment could jump to 4.5%, representing another 1.5 million job losses, by the end of the year.

    While that’s a small improvement from the central bank’s previous 4.6% jobless rate estimate, economists say it’s possible the unemployment rate could rise above the Fed’s expectations. Moreover, they say that historically disadvantaged groups could be disproportionately affected by the central bank’s stringent monetary policy.

    While some groups often sidelined in the job market have seen benefits from this hot job market — women have seen a faster pace of job gains than men in recent months, for example — others, including Black women and Latino men, have seen slower recoveries in jobless rates since the onset of the Covid pandemic.

    Recession fears gained traction last month when the collapse of Silicon Valley Bank sent markets wobbling, raising concerns about the economy’s ability to handle more stress. Goldman Sachs revised its estimate of the United States entering a recession over the next 12 months to a 35% chance, up from its estimate of a 25% chance before the banking sector turmoil.

    That’s of particular concern to certain demographic groups: Jobless rates for Black and Hispanic Americans often increase by more than those of their White counterparts during recessions, said Rakesh Kochhar, a senior researcher focusing on demographics and social trends at the Pew Research Center.

    History makes that discrepancy clear.

    A Pew Research Center report comparing two recessions in recent decades shows how Black and Hispanic Americans experience disproportionate effects on their jobless rates during periods of economic downturn. From the second quarter of 2007 to the second quarter of 2009, during the Great Recession, the unemployment rate rose 6.5 percentage points for Black Americans. The Hispanic unemployment rate climbed 6.3 percentage points. For White workers, it increased 4 percentage points.

    And from the first quarter of 1990 to the first quarter of 1991, the unemployment rate climbed 1.4 percentage points for Black Americans and 2.1 percentage points for Hispanic Americans. The White unemployment rate rose 1.3 percentage points.

    Economists say it’s hard to guess the trajectory of the unemployment rate this year, noting it could very well exceed the Fed’s estimate.

    “There’s just tons of momentum, and once you slow the economy enough to get the unemployment rate moving up, it’s very hard to sort of turn that cruise ship back around,” said Josh Bivens, research director and chief economist at the Economic Policy Institute.

    As such, the Fed’s tightening efforts could easily drive the Black unemployment rate much higher than the overall jobless rate, said William Spriggs, an economics professor at Howard University and chief economist to the AFL-CIO.

    “If the Fed continues to use unemployment as its measure of labor force slack, and thinks they want a 4.5% unemployment rate — to make that happen, the Fed would have to induce net job loss in the labor market,” Spriggs told CNN in an email. “If we go through two months of negative job growth, all bets are off. The Black unemployment rate will easily get to 9% in that scenario.”

    One other likely consequence of growing unemployment is slowing wage growth, Bivens said.

    Like rising unemployment, stunted wage growth tends to hit marginalized groups harder. A 2021 Economic Policy Institute report shows that a 1 percentage point increase in overall unemployment correlates with about 0.5% slower wage growth for White median hourly wages. Wage growth falls by roughly 0.8% for Black median hourly wages.

    “A lot of people have this idea that in a recession, if unemployment rises by a couple of percentage points, as long as you’re not one of those unlucky people to lose the job, you’ve dodged the bullet,” Bivens said. “And that’s not true at all.”

    Still, a robust labor market isn’t a permanent solution to bridging employment disparities, even if the Fed does keep rates lower, says Wendy Edelberg, director of the Hamilton Project and a senior fellow in economic studies at the Brookings Institution.

    The job market’s recent strength is unsustainable, she said. The US economy needs about 75,000 net job gains a month to keep stable and is currently adding about 350,000 net job gains a month on average, according to Edelberg.

    “[The Fed is] right to be confident that one of the things that’s going to have to happen to get inflation back down to a normal, stable level is to get job growth to a normal, sustainable level,” Edelberg said. “But if the Fed’s actions resulted in a slower labor market, then inflation stayed high — that would be a disaster.”

    The March jobs report from the Department of Labor, due to be released Friday at 8:30 a.m., is expected to show the US economy gained 240,000 positions last month. ADP’s private-sector payroll report, generally seen by investors as a proxy for the trajectory of Friday’s number, fell short of expectations, with just 145,000 jobs added. Economists had expected private hiring would rise by 200,000 positions last month.

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  • What the OPEC cuts mean for Putin and Russia | CNN Business

    What the OPEC cuts mean for Putin and Russia | 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
     — 

    Some of the world’s largest oil exporters shocked markets over the weekend by announcing that they would cut oil production by more than 1.6 million barrels a day.

    OPEC+, an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC oil-producing countries, including Russia, Mexico, and Kazakhstan, said on Sunday that the cuts would start in May, running through the end of the year. The news sent both Brent crude futures — the global oil benchmark — and WTI — the US benchmark — up about 6% in trading Monday.

    OPEC+ was formed in 2016 to coordinate and regulate oil production and stabilize global oil prices. Its members produce about 40% of the world’s crude oil and have a significant impact on the global economy.

    What it means for Putin: OPEC+’s decision to cut oil production could have big implications for Russia.

    After Russia invaded Ukraine last year, the United States and United Kingdom immediately stopped purchasing oil from the country. The European Union also stopped importing Russian oil that was sent by sea.

    Members of the G7 — an organization of leaders from some of the world’s largest economies: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — have also imposed a price cap of $60 per barrel on oil exported by Russia, keeping the country’s revenues artificially low. If oil prices continue to rise, some analysts have speculated that the US and other western nations may have to loosen that price cap.

    US Treasury Secretary Janet Yellen said Monday that the changes could lead to reassessing the price cap — though not yet. “Of course, that’s something that, if we’ve decided that it’s appropriate to revisit, could be changed, but I don’t see that that’s appropriate at this time,” she told reporters.

    “I don’t know that this is significant enough to have any impact on the appropriate level of the price cap,” she added.

    Russia also recently announced that it would lower its oil production by 500,000 barrels per day until the end of this year.

    Just last week Putin admitted that western sanctions could deal a blow to Russia’s economy.

    “The illegitimate restrictions imposed on the Russian economy may indeed have a negative impact on it in the medium term,” Putin said in televised remarks Wednesday reported by state news agency TASS.

    Putin said Russia’s economy had been growing since July, thanks in part to stronger ties with “countries of the East and South,” likely referring to China and some African countries.

    Russia, China and Saudi Arabia: The OPEC+ announcement came as a surprise this week. The group had already announced it would cut two million barrels a day in October of 2022 and Saudi Arabia previously said its production quotas would stay the same through the end of the year.

    “The move to reduce supply is fairly odd,” wrote Warren Patterson, head of commodities strategy at ING in a note Monday.

    “Oil prices have partly recovered from the turmoil seen in financial markets following developments in the banking sector,” he wrote. “Meanwhile, oil fundamentals are expected to tighten as we move through the year. Prior to these cuts, we were already expecting the oil market to see a fairly sizable deficit over the second half or 2023. Clearly, this will be even larger now.”

    Saudi Arabia stated that the cut is a “precautionary measure aimed at supporting the stability of the oil market,” but Patterson says it will likely “lead to further volatility in the market,” later this year as less available oil will add to inflationary feats.

    Still, the changes signal shifting global alliances with Russia, China and Saudi Arabia around oil prices, said analysts at ClearView Energy Partners. Higher-priced oil could help Russia pay for its war on Ukraine and also boosts revenue in Saudi Arabia.

    The White House, meanwhile, has spoken out against OPEC’s decision. “We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear,” National Security Council spokesman John Kirby said Monday.

    – CNN’s Paul LeBlanc and Hanna Ziady contributed to this report

    The crisis triggered by the recent collapses of Silicon Valley Bank and Signature Bank is not over yet and will ripple through the economy for years to come, said JPMorgan Chase CEO Jamie Dimon on Tuesday.

    In his closely watched annual letter to shareholders, the chief executive of the largest bank in the United States outlined the extensive damage the financial system meltdown had on all banks and urged lawmakers to think carefully before responding with regulatory policy.

    “These failures were not good for banks of any size,” wrote Dimon, responding to reports that large financial institution benefited greatly from the collapse of SVB and Signature Bank as wary customers sought safety by moving billions of dollars worth of money to big banks.

    In a note last month, Wells Fargo banking analyst Mike Mayo wrote “Goliath is winning.” JPMorgan in particular, he said, was benefiting from more deposits “in these less certain times.”

    “Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis,” said Dimon. “While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd.”

    The failures of SVB and Signature Bank, he argued, had little to do with banks bypassing regulations and that SVB’s high Interest rate exposure and large amount of uninsured deposits were already well-known to both regulators and to the marketplace at large.

    Current regulations, Dimon argued, could actually lull banks into complacency without actually addressing real system-wide banking issues. Abiding by these regulations, he wrote, has just “become an enormous, mind-numbingly complex task about crossing t’s and dotting i’s.”

    And while regulatory change will be a likely outcome of the recent banking crisis, Dimon argued that, “it is extremely important that we avoid knee-jerk, whack-a-mole or politically motivated responses that often result in achieving the opposite of what people intended.” Regulations, he said, are often put in place in one part of the framework but have adverse effects on other areas and just make things more complicated.

    The Federal Deposit Insurance Corporation has said it will propose new rule changes in May, while the Federal Reserve is currently conducting an internal review to assess what changes should be made. Lawmakers in Congress, like Democratic Sen. Sherrod Brown, have suggested that new legislation meant to regulate banks is in the works.

    But, wrote Dimon, “the debate should not always be about more or less regulation but about what mix of regulations will keep America’s banking system the best in the world.”

    Dimon’s letter to shareholders touched on a number of pressing issues, including climate change. “The window for action to avert the costliest impacts of global climate change is closing,” he wrote, expressing his frustration with slow growth in clean energy technology investments.

    “Permitting reforms are desperately needed to allow investment to be done in any kind of timely way,” he wrote.

    One way to do that? “We may even need to evoke eminent domain,” he suggested. “We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives.”

    Eminent domain is the government’s power to take private property for public use, so long as fair compensation is provided to the property owner.

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  • JPMorgan’s Jamie Dimon warns banking crisis will be felt for ‘years to come’ | CNN Business

    JPMorgan’s Jamie Dimon warns banking crisis will be felt for ‘years to come’ | CNN Business

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    New York
    CNN
     — 

    The banking crisis triggered by the recent collapses of Silicon Valley Bank and Signature Bank is not over yet and will ripple through the economy for years to come, said JPMorgan Chase CEO Jamie Dimon on Tuesday.

    In his closely watched annual letter to shareholders, the chief executive of America’s largest bank outlined the extensive damage the financial system meltdown had on all banks — large and small — and urged lawmakers to think carefully before responding with increased regulation.

    “These failures were not good for banks of any size,” wrote Dimon, responding to reports that large financial institution benefited greatly from the collapse of SVB and Signature Bank as wary customers sought safety by moving billions of dollars worth of money to big banks.

    In a note last month, Wells Fargo banking analyst Mike Mayo wrote “Goliath is winning.” JPMorgan in particular, he said, was benefiting from more deposits “in these less certain times.”

    “Any crisis that damages Americans’ trust in their banks damages all banks — a fact that was known even before this crisis,” he wrote. “While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd.”

    The failures of SVB and Signature Bank, he argued, had little to do with banks bypassing regulations. He said that SVB’s high Interest rate exposure and large amount of uninsured deposits were already well-known to both regulators and to the marketplace at large.

    Current regulations, he argued, could actually lull banks into complacency without actually addressing real system-wide banking issues. Abiding by these regulations, he wrote, has just “become an enormous, mind-numbingly complex task about crossing t’s and dotting i’s.”

    And while regulatory change will almost certainly follow the recent banking crisis, Dimon argued that, “it is extremely important that we avoid knee-jerk, whack-a-mole or politically motivated responses that often result in achieving the opposite of what people intended.” Regulations, he said, are often put in place in one part of the framework but have adverse effects on other areas and just make things more complicated.

    The Federal Deposit Insurance Corporation has said it will propose new rule changes in May, while the Federal Reserve is currently conducting an internal review to assess what changes should be made. Lawmakers in Congress, including Democratic Sen. Sherrod Brown of Ohio, have suggested that new legislation meant to regulate banks is in the works.

    But, wrote Dimon, “the debate should not always be about more or less regulation but about what mix of regulations will keep America’s banking system the best in the world.”

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  • China Renaissance suspends trading, delays results after founder’s disappearance | CNN Business

    China Renaissance suspends trading, delays results after founder’s disappearance | CNN Business

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    Hong Kong
    CNN
     — 

    China Renaissance, a top dealmaker in the country’s tech industry, said it would suspend trading of its shares and delay the release of its annual results because it still can’t get in touch with its founder.

    Bao Fan, 52, started the boutique investment bank in 2005 and has been unreachable since the middle of February, according to the company. Shares in China Renaissance have plunged since Bao went missing, at one point dropping as much as 50%.

    China Renaissance said in late February that it had learned Bao was “cooperating in an investigation” being carried out by certain authorities in the country. It gave no other details.

    Chinese media have reported Bao might be assisting in an investigation related to a former executive at China Renaissance.

    In a filing on Sunday, China Renaissance said auditors couldn’t complete their work or sign off on their report because of Bao’s absence. The board was also unable to give an estimate about when it would be able to approve its audited results for 2022 or dispatch its annual report by an April 30 deadline as required by Hong Kong’s listing rules.

    Trading in the company’s shares was suspended from Monday as a result.

    Bao is known as a veteran dealmaker who works closely with top technology companies in China. He helped broker the 2015 merger between two of the country’s leading food delivery services, Meituan and Dianping. Today, the combined company’s “super app” platform is ubiquitous in China.

    His team has also invested in US-listed Chinese electric vehicle makers Nio

    (NIO)     and Li Auto and helped Chinese internet giants Baidu

    (BIDU)     and JD.com

    (JD)     complete their secondary listings in Hong Kong.

    Over the weekend, China’s top anti-graft watchdog launched an investigation into Liu Liange, former party secretary and chairman of Bank of China, according to a statement by the Central Commission for Discipline Inspection and the State Supervision Commission. The bank is state-owned and one of the country’s four biggest lenders.

    Liu is suspected of “serious violations of discipline and law,” the statement said. He is among the most senior financial executives targeted in a broader financial crackdown by President Xi Jinping.

    In January, Wang Bin, former party chief and chairman of China Life Insurance, was charged by national-level prosecutors with taking bribes and hiding overseas savings.

    — Michelle Toh contributed reporting.

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  • Cineworld shares tank after Regal Cinemas owner ditches plans to sell US and UK businesses | CNN Business

    Cineworld shares tank after Regal Cinemas owner ditches plans to sell US and UK businesses | CNN Business

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    London
    CNN
     — 

    Shares in Cineworld plunged more than 30% Monday, hitting their lowest level since late August, after the owner of Regal Cinemas said it planned to terminate efforts to sell its US, UK and Irish businesses.

    The world’s second-largest movie theater chain also announced a debt restructuring plan with lenders to help it exit bankruptcy. The deal does not provide for any recovery of funds for shareholders, the company said in a statement.

    “This agreement with our lenders represents a ‘vote of confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said CEO Mooky Greidinger.

    Cineworld — which, like many cinema operators, was hit hard by the pandemic — filed for Chapter 11 bankruptcy protection in September. Over the past year, the company’s shares have lost more than 93% of their value.

    Under the proposed debt restructuring, lenders will reduce Cineworld’s debt pile by $4.5 billion and receive equity in the reorganized group; provide $1.46 billion in new debt; and backstop a $800 million share issue.

    The company said it had received offers for its businesses in other parts of the world and was considering them. In addition to the United States, the United Kingdom and Ireland, Cineworld operates cinemas in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

    It will abandon plans to sell its US, UK and Ireland arms unless it receives an “all-cash bid” significantly higher than the current value of the businesses.

    The British company continues to operate its theaters around the world. After two rounds of closures in the United States, around 500 Cineworld theaters remain across the country.

    The company said in February that it expected shareholders to be wiped out entirely by the bankruptcy process, even in the event of a sale of some of its businesses.

    The pandemic forced movie theaters around the globe to close, dealing a devastating blow to Cineworld and others in the industry, and it is still affecting visitor numbers. Cineworld lost $2.7 billion in 2020 and another $566 million in 2021. It reported another loss, of $294 million, in the six months ending in June 2022.

    Cinema operators are coming up with creative ways to claw back revenue. Cineworld’s larger rival AMC Theaters announced recently that it would price tickets based on seat location, charging extra for more desirable seats in the middle of a theater.

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  • Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

    Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

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    Hong Kong/Atlanta
    CNN
     — 

    Oil prices spiked during Asian trade Monday after OPEC+ producers said they would cut production in a surprise move.

    Brent crude, the global benchmark, jumped 4.8% to $83.73 a barrel, while WTI, the US benchmark, rose 4.9% to $79.36.

    Rising oil prices could mean inflation remains higher for longer, adding pressure to a hot-button issue for consumers around the world.

    On Sunday, Saudi Arabia announced that it would start “a voluntary reduction” in its production of crude oil, alongside other members or allies of the Organization of the Petroleum Exporting Countries (OPEC).

    The cuts will start in May and last through the end of the year, an official with the Saudi Ministry of Energy was quoted as saying by Saudi state-run news agency SPA.

    The reductions are on top of those announced by OPEC+ in October, according to SPA.

    That month, oil producers had agreed to slash output by 2 million barrels a day, the largest cut since the start of the pandemic and equivalent to about 2% of global oil demand.

    Saudi Arabia now says it will cut oil production by another half a million barrels a day.

    Meanwhile, Iraq will slash production by 200,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day.

    Kuwait, Algeria and Oman will also lower production by 128,000, 48,000 and 40,000 barrels per day, respectively.

    In a Sunday note, Goldman Sachs analysts said the move was unexpected but “consistent with the new OPEC+ doctrine to act pre-emptively because they can without significant losses in market share.”

    The collective output cut by the nine members of OPEC+ totals 1.66 million barrels per day, said the analysts, who hiked their price forecast for Brent this year to $95 per barrel.

    Saudi Arabia’s energy ministry described its latest reduction as a precautionary measure aimed at supporting the stability of the oil markets, according to SPA.

    The White House pushed back on that notion — as well as the latest cuts by OPEC+.

    “We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said. “We’re focused on prices for American consumers, not barrels.”

    In October, OPEC+’s decision to cut production had already rankled the White House.

    US President Joe Biden pledged at the time that Saudi Arabia would suffer “consequences.” But so far, his administration appears to have back off on its vows to punish the Middle East kingdom.

    Russia, a member of OPEC+, also said Sunday that it would extend a voluntary reduction of 500,000 barrels per day until the end of 2023. The move was announced by Russian Deputy Prime Minister Alexander Novak, as cited by state-run news agency TASS.

    That decision was less surprising. Goldman analysts said they had forecast the cut would last into the second half of the year.

    — CNN’s Hanna Ziady and Arlette Saenz contributed to this report.

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  • Swiss prosecutor probes Credit Suisse takeover | CNN Business

    Swiss prosecutor probes Credit Suisse takeover | CNN Business

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    Switzerland’s Federal Prosecutor has opened an investigation into the state-backed takeover of Credit Suisse

    (AMJL)     by UBS Group, the office of the attorney general said Sunday.

    The prosecutor, based in the Swiss capital Bern, is looking into potential breaches of the country’s criminal law by government officials, regulators and executives at the two banks, which agreed on an emergency merger last month to avoid a meltdown in the country’s financial system.

    There were “numerous aspects of events around Credit Suisse” that warranted investigation and which needed to be analyzed to “identify any criminal offenses that could fall within the competence of the [prosecutor],” it said in a statement.

    “The Office of the Attorney General wants to proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility,” it added.

    It gave no indication of any specific aspects of the merger agreement it might look into or how long the investigation might last.

    Both UBS and Credit Suisse declined to comment.

    “It’s astonishing that the prosecutor would comment,” said Mark Pieth, professor emeritus of the University of Basel, where he has taught criminal law and criminology. But the rescue “is so out of the ordinary that they had to say something.”

    Pieth said the prosecutor could be probing breaches of secrecy provisions by officials, or the trading on inside information, adding that the wiping out of some bondholders as planned under the deal is also problematic.

    In the deal announced March 19 and orchestrated by the Swiss government, the central bank and market regulator, UBS would acquire rival Credit Suisse for 3 billion Swiss francs ($3.3 billion). The bank is trying to close the deal by as soon as the end of April, sources have told Reuters.

    The Swiss public and politicians have voiced concerns about the level of state support, with nearly 260 billion Swiss francs in liquidity and guarantees offered by the government and Swiss National Bank.

    A poll of Swiss economists found that nearly half think the takeover of Credit Suisse was not the best solution. They warned that the situation had dented Switzerland’s reputation as a banking center.

    The takeover, which was also designed to help secure financial stability globally during a period of turmoil, has sparked concern among critics about the size of the merged bank, with $1.6 trillion in assets and more than 120,000 staff worldwide.

    Up to 30% of staff could lose their jobs due to the takeover, according to an unnamed senior UBS manager quoted in Swiss media.

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  • Who will end up paying for the banking crisis: You | CNN Business

    Who will end up paying for the banking crisis: You | 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
     — 

    It cost the Federal Deposit Insurance Corporation about $23 billion to clean up the mess that Silicon Valley Bank and Signature Bank left in the wake of their collapses earlier this month.

    Now, as the dust clears and the US banking system steadies, the FDIC needs to figure out where to send its invoice. While regional and mid-sized banks are behind the recent turmoil, it appears that large banks may be footing the bill.

    Ultimately, that means higher fees for bank customers and lower rates on their savings accounts.

    What’s happening: The FDIC maintains a $128 billion deposit insurance fund to insure bank deposits and protect depositors. That fund is typically supplied by quarterly payments from insured banks in the United States. But when a big, expensive event happens — like the FDIC making uninsured customers whole at Silicon Valley Bank — the agency is able to assess a special charge on the banking industry to recover the cost.

    The law also gives the FDIC the authority to decide which banks shoulder the brunt of that assessment fee. FDIC Chairman Martin Gruenberg said this week that he plans to make the details of the latest assessment public in May. He has also hinted that he would protect community banks from having to shell out too much money.

    The fees that the FDIC assesses on banks tend to vary. Historically, they were fixed, but 2010’s Dodd-Frank act required that the agency needed to consider the size of a bank when setting rates. It also takes into consideration the “economic conditions, the effects on the industry, and such other factors as the FDIC deems appropriate and relevant,” according to Gruenberg.

    On Tuesday and Wednesday, members of the Senate Banking Committee and the House Financial Services Committee grilled Gruenberg about his plans to charge banks for the damage done by SVB and others, and repeatedly implored him to leave small banks alone.

    Gruenberg appeared receptive.

    “Will you commit to using your authority…to establish separate risk-based assessment systems for large and small members of the Deposit Insurance Fund so that these well-managed banks don’t have to bail out Silicon Valley Bank?” asked the US Rep. Andy Barr, a Republican who represents of Kentucky’s 6th district.

    “I’m certainly willing to consider that,” replied Gruenberg.

    “if smaller community banks in Texas will be left responsible for bailing out the failed banks in California and New York?” asked US Rep. Roger Williams, a Republican who represents Texas’ 25th district.

    “Let me just say, without forecasting what our board is going to vote, we’re going to be keenly sensitive to the impact on community banks,” replied Gruenberg.

    Representatives Frank Lucas, John Rose, Ayanna Pressley, Dan Meuser, Nikema Williams, Zach Nunn and Andy Ogles all asked similar questions and received similar responses. As did US Sens. Sherrod Brown and Cynthia Lummis.

    “I don’t doubt he’s still fielding a lot of phone calls,” from politicians pressuring him to place the burden on large banks, former FDIC chairman Bill Isaac told CNN.

    Smaller banks are saying that they’re unable to pick up this tab and didn’t have anything to do with the failure of “these two wild and crazy banks,” said Isaac. “They’re arguing to put the assessment on larger banks and as I understand it, the FDIC is thinking seriously about it,” he added.

    A spokesperson from the FDIC told CNN that the agency “will issue in May 2023 a proposed rulemaking for the special assessment for public comment.” In regard to Greunberg’s testimony they added that “when the boss says something, we defer to the boss.”

    Big banks: “We need to think hard about liquidity risk and concentrations of uninsured deposits and how that’s evaluated in terms of deposit insurance assessments,” said Gruenberg to the Senate Banking Committee, indicating that smaller banks that are operating carefully could be asked to bear less of the assessment.

    A larger assessment on big banks would add to what will already be a multi-billion dollar payment from the nation’s largest banks like JPMorgan Chase

    (JPM)    , Citigroup

    (C)    , Bank of America

    (BAC)     and Wells Fargo

    (WFC)    .

    The argument is that the largest US banks will be able to shoulder extra payments without collapsing under it. Those large banks also benefited greatly from the collapse of SVB and Signature Bank as wary customers sought safety by moving billions of dollars worth of money to big banks. 

    Passing it on: Regardless of who’s charged, the fees will eventually get passed on to bank customers in the end, said Isaac. “It’s going to be passed on to all customers. I have no doubts that banks will make up for these extra costs in their pricing — higher fees for services, higher prices for loans and less compensation for deposits.”

    It’s hard out there for a Wall Street banker. Or harder than it was.

    The average annual Wall Street bonus fell to $176,700 last year, a 26% drop from the previous year’s average of $240,400, according to estimates released Thursday by New York State Comptroller Thomas DiNapoli.

    While that’s a big decrease, the 2022 bonus figure is still more than twice the median annual income for US households, reports CNN’s Jeanne Sahadi.

    All in, Wall Street firms had a $33.7 billion bonus pool for 2022, which is 21% smaller than the previous year’s record of $42.7 billion — and the largest drop since the Great Recession.

    For New York City and New York State coffers, bonus season means a welcome infusion of revenue, since employees in the securities industry make up 5% of private sector employees in NYC and their pay accounts for 22% of the city’s private sector wages. In 2021, Wall Street was estimated to be responsible for 16% of all economic activity in the city.

    DiNapoli’s office projects the lower bonuses will bring in $457 million less in state income tax revenue and $208 million less for the city compared to the year before.

    Beleaguered retailed Bed Bath & Beyond will attempt to $300 million of its stock to repay creditors and fund its business as it struggles to avoid bankruptcy, reports CNN’s Nathaniel Meyersohn.

    If it’s not able to raise sufficient money from the offering, the home furnishings giant said Thursday it expects to “likely file for bankruptcy.”

    Bed Bath & Beyond was able to initially avoid bankruptcy in February by completing a complex stock offering that gave it both an immediate injection of cash and a pledge for more funding in the future to pay down its debt. That offering was backed by private equity group Hudson Bay Capital.

    But on Thursday, Bed Bath & Beyond said it was terminating the deal with Hudson Bay Capital for future funding and is turning to the public market.

    Shares of Bed Bath & Beyond dropped more than 26% Thursday. The stock was trading around 60 cents a share.

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  • ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business

    ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business

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    New York
    CNN
     — 

    A US default would have such devastating economic and financial consequences that many observers dismiss the possibility out of hand. But investors are not ruling out such a nightmare scenario.

    Even though a default could wipe out millions of jobs and wreak havoc on Wall Street, the White House and Republican leaders in Washington are nowhere near a deal to avert disaster that could strike as soon as July.

    As politicians sleepwalk toward a potential debt ceiling crisis, financial markets have begun pricing in a small — but growing — chance of a disastrous default.

    The implied probability of a US government default has increased to approximately 2%, according to modeling by research provider MSCI shared exclusively with CNN. That calculation is based on the cost to insure US debt in the market for credit default swaps.

    Although the probability of default is tiny, it has increased roughly fivefold since January 2, MSCI said.

    Since then, chaos in Congress, underlined by the historic dysfunction leading up to the election of House Speaker Kevin McCarthy, have raised concerns about how lawmakers will reach a compromise on much thornier issues such as the debt ceiling.

    “The probability of default has gone up noticeably,” Andy Sparks, head of portfolio management research at MSCI, told CNN in an interview. “It is small, but it’s not zero. And it has gone up in a very significant way.”

    An actual default would be terrible — for both Wall Street and Main Street. Moody’s Analytics chief economist Mark Zandi has described a default as “financial Armageddon.”

    “I don’t think anyone should be complacent about this,” said Sparks. “Turmoil in the banking system shows how things can change very quickly.”

    The federal government hit the $31.4 trillion debt ceiling in January, forcing Treasury Secretary Janet Yellen to take accounting moves known as “extraordinary measures” to avoid default.

    Yellen has used unusually strong language for a former central banker to warn Congress against messing with the debt ceiling. On Thursday, Yellen said a breach of the debt ceiling could spark a “prolonged downturn and a global financial crisis.”

    “It could upend the lives of millions of Americans and those around the world,” Yellen said in a speech.

    Goldman Sachs chief economist Jan Hatzius told CNN in January that even a near-default could cause a recession as well as turmoil in financial markets. Moody’s estimates that even a brief breach of the debt limit would kill almost a million jobs.

    All of this explains why many believe Washington will get a deal done before disaster strikes, as it has in the past.

    Even though leaders in Washington are not seriously negotiating on a debt ceiling deal, there is still time.

    The Congressional Budget Office has estimated that even without addressing the debt ceiling, the government will have enough cash to avoid a default until sometime between July and September. The exact timing for the so-called X-date will depend in large part on 2022 tax collections in April.

    Tom Barkin, president of the Federal Reserve Bank of Richmond, told CNN last week that it’s “hard to imagine” the government would breach the debt ceiling.

    Still, Barkin conceded if it happened the Fed would be forced to react, much like it did after the Sept. 11 terror attacks.

    Others are more pessimistic about the debt ceiling.

    Greg Valliere, chief US policy strategist at AGF Investments, only sees a 60% chance that Congress reaches a deal to address the debt ceiling.

    “I think we’ll come right up to the precipice,” Valliere, who is based in Washington, told CNN. “Most people in this city feel it’s inconceivable we could default on our debt. I agree it’s unlikely but it’ll be much closer than people thought.”

    He pointed to the more radical makeup of the Republican caucus and the reluctance among some lawmakers to vote for a debt ceiling hike.

    Even McCarthy, the Republican House Speaker, told CNBC this week there has been “no progress” in negotiations. “Time is ticking. Now I’m very concerned about where we are,” McCarthy said.

    “I worry there are just enough House radicals who might not accept anything. And it doesn’t take many of them to make this a crisis,” Valliere said.

    Asked about MSCI’s estimate of a 2% implied probability of a default, Valliere said that number is low.

    “The markets are too sanguine,” he said. “The market has felt for months that this is like the little boy who cries wolf. But this is not a typical debt ceiling debate.”

    There are some early indicators of concern popping up in the bond market.

    Morgan Stanley wrote in a report on Thursday that “kinks” have emerged in the Treasury bill market around bonds that mature around the X-date.

    “Market attention could swing back to this issue soon” Morgan Stanley advised clients.

    Or maybe not.

    McCarthy and his top lieutenants say they are prepared to push ahead with a fallback plan: A party-line bill to raise the debt ceiling, CNN’s Manu Raju reports.

    But such a move could be risky. Republicans can only afford to lose four of their own members in any party-line vote.

    There is also a possibility that Congress punts, reaching a short-term agreement to delay the issue by a few months.

    Eurasia Group analyst Jon Lieber said in a report Thursday there is a growing chance that lawmakers put off a debt ceiling solution until the end of the year.

    “A short-term punt would merely delay and not eliminate the disruption risks of the debt limit,” Lieber said.

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  • Alabama men’s basketball star Brandon Miller declares for NBA Draft, per reports | CNN

    Alabama men’s basketball star Brandon Miller declares for NBA Draft, per reports | CNN

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    CNN
     — 

    University of Alabama men’s basketball star Brandon Miller has declared for the 2023 NBA Draft, according to ESPN’s Adrian Wojnarowski.

    The 20-year-old freshman forward Miller is considered one of the top prospects in this year’s draft class. Miller averaged 18.8 points and 8.2 rebounds per game in 37 games played.

    Miller said he thanks “God, my family, my fans and all the coaches at the University of Alabama,” in a statement to ESPN.

    Miller helped lead the Crimson Tide to a 31-6 record and the top overall seed in the men’s NCAA tournament. Miller, playing through an injury, struggled in the tournament and Alabama would go on to lose in the Sweet 16 to San Diego State.

    CNN has reached out to the Alabama athletic department for comment but did not immediately hear back.

    The embattled star did not miss a game for the Crimson Tide this season, despite a fatal shooting near campus which the school said he is a “cooperative witness” in.

    A law enforcement officer testified that another man had texted Miller to bring the man’s gun to the scene, where Jamea Jonae Harris was shot dead in January, according to CNN affiliate WBMA.

    Two men have been charged with murder.

    Miller has not been charged with any crime.

    The Alabama athletic department said in February that Miller is “not considered a suspect … only a cooperative witness” in the murder case.

    The 2023 NBA Draft is scheduled for June 22 at the Barclays Center in Brooklyn, New York.

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