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  • Colombia’s marijuana farmers want out of the shadows. Will the government ever legalize their harvest? | News – Medical Marijuana Program Connection

    Colombia’s marijuana farmers want out of the shadows. Will the government ever legalize their harvest? | News – Medical Marijuana Program Connection

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    Cajibio (CNN) — On a recent Friday morning, about 200 coca and marijuana farmers gathered in the small town of Cajibio, southwestern Colombia, to hear the government out.

    Colombian’s government was still licking its wounds after an initiative to legalize recreational marijuana had sunk in Congress less than 10 days before.


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  • Judge denies AMC settlement on stock conversion, shares surge | CNN Business

    Judge denies AMC settlement on stock conversion, shares surge | CNN Business

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    A judge on Friday blocked a proposed settlement on AMC Entertainment Holdings’ stock conversion plan that would allow the company to issue more shares, sending its common shares soaring and preferred shares down in after-hours trading.

    Delaware Vice Chancellor Morgan Zurn said in the ruling that she cannot approve the settlement “as submitted,” because it would release potential claims by preferred shareholders who were not represented in the lawsuit or settlement.

    AMC shares were up 69% at $7.44 in trading after the bell. Its preferred shares were down 20% at $1.43.

    The company was sued in February for allegedly rigging a shareholder vote that would allow AMC to convert preferred stock to common stock and issue hundreds of millions of new shares.

    The conversion would dilute the common stockholders’ ownership, but allow AMC to pay down some of its $5.1 billion in debt.

    AMC has told investors it is burning cash at an unsustainable rate and warned that an inability to raise capital could force the company into bankruptcy.

    It cannot carry out its plan to do so until the litigation has been resolved.

    The settlement received more than 2,800 objections from shareholders, a level of interest Zurn called “unprecedented” in her ruling on Friday.

    “AMC’s stockholder base is extraordinary,” she said, adding that many “care passionately about their stock ownership and the company.”

    The judge rejected the settlement after determining the holders of common stock could not release AMC from potential claims that belong to holders of preferred shares, an issue which objectors did not raise.

    Many objectors sought permission to opt out of the settlement and sue on their own behalf, dismissing AMC’s dire financial predictions as “fear tactics.”

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  • California man sentenced to over 6 years in prison for $8.7 million cow manure Ponzi scheme, US attorney’s office says | CNN Business

    California man sentenced to over 6 years in prison for $8.7 million cow manure Ponzi scheme, US attorney’s office says | CNN Business

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    CNN
     — 

    A man from California who ran a multimillion-dollar fraud scheme where he claimed to turn cow manure into green energy has been sentenced to over six years in prison, the US attorney’s office for the Eastern District of California announced this week.

    Ray Brewer, 66, stole over $8.7 million from investors, court records from between March 2014 and December 2019 showed.

    Brewer’s scam involved convincing investors he could build anaerobic digesters – large machines that create methane through microorganisms breaking down biodegradable material – on dairies in several California and Idaho counties, the US attorney’s office said in a news release. This methane can “then be sold on the open market as green energy,” the release stated.

    Brewer’s investors were meant to receive tax incentives and 66% of all net profits as part of the scheme, authorities said.

    Brewer gave the investors tours of the dairies where he claimed he’d build the digester machines and “sent them forged lease agreements with the dairy owners,” according to the US attorney’s office release.

    “He also sent the investors altered agreements with banks that made it appear as though he had obtained millions of dollars in loans to build the digesters,” the release said.

    Wanting to appear as though he had secured revenue streams, Brewer also sent investors forged contracts with multinational companies, authorities said, and showed them fake photos of the digesters under construction.

    After receiving investors’ funds, authorities said he transferred the money to bank accounts opened in the names of an alias, his relatives and different entities.

    In some cases, Brewer offered refunds that came from “newly received money from other investors who had not authorized Brewer to use their money in this way,” the US attorney’s office said.

    Brewer assumed a new identity and relocated to Montana after his investors became aware of his fraud, authorities said.

    When he was arrested, Brewer attempted to trick authorities by telling him they had the wrong person.

    He also told officers stories about being in the Navy and “how he once saved several soldiers during a fire by blocking the flames with his body so that they could escape” – tales he later admitted were lies “meant to curry favor with law enforcement,” the news release stated.

    Some of Brewer’s purchases with the stolen money included two plots of land of 10 or more acres, a custom 3,700 square-foot home and new pickup trucks, according to authorities.

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  • The company supplying water to millions of Londoners is in deep trouble | CNN Business

    The company supplying water to millions of Londoners is in deep trouble | CNN Business

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    London
    CNN
     — 

    Britain’s biggest water supplier said Wednesday it needed to raise more cash from investors, as UK media reported the government was preparing contingency plans to rescue the company.

    Thames Water provides drinking water and waste water services to 15 million customers in London and the southeast of England. The utility, which counts one of Canada’s largest public pension funds among its top investors, has around £14 billion ($17.5 billion) of debt on its balance sheet.

    News that it needs more money came just a day after CEO Sarah Bentley resigned with immediate effect after three years in the role. She was in the second year of an eight-year turnaround plan to address aging infrastructure, tackle leakage and reduce pollution in rivers, a legacy of underinvestment.

    Thames Water received £500 million ($635 million) from shareholders in March, but said Wednesday it would need more.

    The firm “is continuing to work constructively with its shareholders in relation to the equity funding expected to be required to support Thames Water’s turnaround and investment plans,” it added.

    The company said it was keeping the water industry regulator Ofwat “fully informed” of its progress and added that it had a “strong liquidity position,” including £4.4 billion ($5.6 billion) of cash.

    Ofwat said it was in “ongoing discussions” with Thames Water “on the need for a robust and credible plan to turn the business around.”

    “We will continue to focus on protecting customers’ interests,” it added.

    Government ministers, including representatives from the UK Treasury and the environment department, Defra, are holding emergency talks with Ofwat over Thames Water’s future, according to UK media reports.

    One possibility would be to place the company into a special administration regime that effectively takes the firm into temporary public ownership. Sky News was first to report the discussions.

    A government spokesperson told CNN: “This is a matter for the company and its shareholders. We prepare for a range of scenarios across our regulated industries — including water — as any responsible government would.”

    The spokesperson added that the UK water sector “as a whole is financially resilient.”

    Thames Water says about 24% of the water it supplies to customers is lost through leakage.

    The company’s single biggest shareholder is the Ontario Municipal Employees Retirement System, which holds a stake of around 32%. The Universities Superannuation Scheme, a pension fund for the academic staff of UK universities, owns nearly 20%.

    Other large investors include the Chinese and Abu Dhabi sovereign wealth funds, as well as British Columbia Investment Management Corporation, which invests on behalf of public sector workers.

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  • Gen Z and Millennials are scrimping. Boomers? Living it up | CNN Business

    Gen Z and Millennials are scrimping. Boomers? Living it up | CNN Business

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    New York
    CNN Business
     — 

    Baby Boomers are living it up, splurging on cruises and restaurants. Younger Americans are struggling just to keep up.

    Bank of America internal data shows a “significant gap” in spending has opened recently between older and younger generations.

    While Baby Boomers and even Traditionalists (born 1928-1945) are ramping up spending, Gen X, Gen Z and Millennials are cutting back as they grapple with high housing costs and looming student debt payments.

    “It’s fairly unusual,” David Tinsley, senior economist at the Bank of America Institute, told CNN in a phone interview.

    Overall, household spending dipped 0.2% year-over-year in May, according to the bank’s card data — but the generational breakdown showed a more varied picture.

    Spending increased by 5.3% for Traditionalists and 2.2% for Baby Boomers. In contrast, spending fell by about 1.5% for younger generations.

    If not for the aggressive spending by Boomers, Tinsley said, overall consumer spending would have been even more negative.

    So, what is going on?

    Older Americans are ramping up spending as they benefit from a spike in Social Security payments.

    Starting in January, Social Security recipients received an 8.7% cost-of-living adjustment, the biggest increase since 1981. That increase — caused directly by high inflation — is boosting the average retirees’ monthly payments by an estimated $146.

    Bank of America spending data shows a noticeable bump in spending by households that received the cost-of-living boost.

    However, the bank noticed the spending surge by older Americans is happening among high-income households too. And those consumers are less likely to be impacted by the spike in Social Security payments.

    “That can’t be the whole story,” Tinsley said of the cost-of-living adjustments.

    To explain the drop in spending by younger Americans, Bank of America pointed to high housing costs. In recent years, rental rates spiked, home prices soared and mortgage rates surged.

    Younger Americans are also much more likely to move than older ones.

    “The people who do move are really facing quite significant cost increases,” said Tinsley.

    Bank of America has noted that older consumers are spending on travel, including hotels, airfare and cruises, now that the Covid emergency is over.

    Due to Covid fears, older generations held back on travel during the pandemic, but now they are “splurging,” Tinsley said.

    Beyond the high cost of living, Bank of America said many younger Americans are also likely bracing for the return of a significant monthly expense: student debt.

    The bipartisan debt ceiling deal included a provision that specifically prevented the Biden administration from extending the pause on federal student loan payments.

    The student debt freeze, in effect since March 2020 when the Covid pandemic erupted, is expected to conclude by the end of August.

    That is particularly painful to younger consumers. Americans are sitting on $1.6 trillion of student debt, according to the New York Federal Reserve, and the vast majority of that student debt is held by those under the age of 49.

    For millions of Gen Z and Millennials, the return of student debt payments will mean less money for spending on restaurants and vacations.

    Some consumers may be starting to pull back on spending ahead of that change, Tinsley said: “It’s coming down the tracks pretty fast now.”

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  • In desperate bid for cash, the Treasury is auctioning one-day bills | CNN Business

    In desperate bid for cash, the Treasury is auctioning one-day bills | CNN Business

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    CNN
     — 

    Desperate times are calling for desperate measures at the Treasury Department.

    For the first time since 2007, the department is set to auction $15 billion worth of one-day cash management bills on Friday that will be issued on June 5.

    This comes as the Treasury’s cash balances hover around $37 billion, the lowest level since 2017. Since the debt ceiling was initially breached in January, the Treasury hasn’t been able to borrow more money to pay its bills. If lawmakers don’t raise the debt ceiling by June 5, the Treasury is poised to run out of funds to meet its full obligations, Treasury Secretary Janet Yellen warned.

    Congress appears to be on track to avoid that scenario. The House of Representatives passed the debt deal House Speaker Kevin McCarthy cut with President Joe Biden on Wednesday. Now its fate rests in the hands of the Senate and Biden, who vowed to quickly sign it into law.

    Cash management bills mature in a relatively short time frame, ranging from a few days to a year, according to the Treasury. They’re used to help manage the Treasury’s short-term financing needs.

    Unlike Treasury bill auctions that occur on a weekly and monthly basis, cash management bill auctions are irregular, though not uncommon. For instance, last year the Treasury held more than 30 cash management bill auctions.

    It is, however, quite unusual for the department to auction debt that matures in just one day. Over the past 25 years, the Treasury held six one-day cash management bill auctions.

    Yields on cash management bills, which are determined by the auction process, tend to be higher than regular fixed maturity bills. On Thursday, the Treasury auctioned $25 billion of three-day cash management bills yielding 6.15%. That exceeds the yields almost all other Treasury bills are trading at.

    Friday’s auction is open to the public with a minimum $100 bid and can only be purchased in $100 increments.

    “There likely won’t be an issue for the Treasury to find bidders on the paper as maturities this short can fit well in money-market funds or other institutional buyers’ books that are looking to invest cash over the weekend,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

    It’s likely that yields on the one-day bills will end up mirroring yields of other bills that mature on June 6, he added, “but any negative headlines overnight indicating bottlenecks with the legislature getting through the Senate will impact the auction price.”

    Underscoring the uncertainty around the debt ceiling bill, the Treasury said plans to issue $65 billion of 13-week bills and $58 billion of 26-week bills on June 8 were “tentative.”

    The announcements “are conditional on enactment of the debt limit suspension because Treasury forecasts insufficient headroom under the current debt limit to issue securities in these amounts on June 8,” the Treasury said in a statement on Thursday.

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  • US oil prices sink below $70 on debt ceiling jitters and Russia-Saudi tensions | CNN Business

    US oil prices sink below $70 on debt ceiling jitters and Russia-Saudi tensions | CNN Business

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    New York
    CNN
     — 

    US oil prices dropped below $70 a barrel Tuesday on concerns about whether the debt ceiling deal will make it through Congress and on reports of tensions between Saudi Arabia and Russia ahead of a key OPEC+ meeting.

    Crude slumped 4.4% to close at $69.46 a barrel, the lowest settlement price in nearly four weeks.

    The selloff marks one of the worst days of the year for the oil market and could help keep a lid on pump prices. The national average for a gallon of regular gasoline is down by about $1 from a year ago.

    Oil market veterans blamed Tuesday’s decline in part on worries about whether conservatives in the House of Representatives will try to block the bipartisan deal to raise the debt ceiling forged over the weekend by President Joe Biden and House Speaker Kevin McCarthy.

    “It’s not a layup that the debt deal is going to get done. That’s spooking the market, no doubt about that,” said Robert Yawger, vice president of energy futures at Mizuho Securities.

    Patrick De Haan, head of petroleum analysis at GasBuddy, also pointed to “growing skepticism” about the debt ceiling agreement and the risk that a failure to raise the borrowing limit sets off a “deep recession” that curbs demand for oil.

    Treasury Secretary Janet Yellen has warned the government will not have enough funds to meet all of the nation’s obligations if Congress does not address the debt ceiling by June 5.

    Brent crude, the world benchmark, dropped by more than 4%, slipping below $74 a barrel.

    Meanwhile, there are new questions about the relationship between OPEC leader Saudi Arabia and Russia ahead of this weekend’s meeting of oil producers in Vienna.

    Saudi Arabia has expressed anger to Russia for failing to follow through on Moscow’s promise to cut production in response to Western sanctions, the Wall Street Journal reported, citing sources. The apparent tensions raises uncertainty about the status of OPEC+, the alliance between OPEC members like Saudi Arabia, the United Arab Emirates and Kuwait and non-OPEC nations led by Russia.

    “There is starting to be chatter about the Russian and Saudis not being the best of friends,” said Yawger.

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  • Britain is getting so desperate to tame inflation it’s talking about food price caps | CNN Business

    Britain is getting so desperate to tame inflation it’s talking about food price caps | CNN Business

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    London
    CNN
     — 

    Brits woke up to yet more grim news on inflation Tuesday, with new data showing prices in UK stores are rising at a record pace. It’s the latest sign of a seemingly intractable cost-of-living crisis that has Prime Minster Rishi Sunak considering drastic measures, including price controls, to keep inflation in check.

    The cost of store items, known as shop price inflation, rose 9% through the year to May, a fresh high for an index that dates back to 2005, according to the British Retail Consortium. Food inflation dipped slightly to 15.4% in May, but that’s still the second-highest rate on record.

    Lower energy and commodity costs helped reduce prices of some staples, including butter, milk, fruit and fish. But chocolate and coffee prices are rising as global commodity prices soar, British Retail Consortium CEO Helen Dickinson said.

    The slight drop in food prices will give cold comfort to consumers, and piles the pressure on Sunak, who has promised to halve inflation this year as one of his five pledges to voters.

    The British public “are still wincing when their total comes up at the checkout… a weekly shop that cost £100 last year is now clocking in at £115,” Laura Suter, head of personal finance at stockbroker AJ Bell wrote in a note.

    Poor households are being hit the hardest because they spend more of their disposable income on food. More people are using food banks in the United Kingdom than ever before, eclipsing even the peak of the pandemic.

    The Trussell Trust, the UK’s biggest food bank network, handed out close to 3 million emergency food parcels over the 12 months to March 2023 — a 37% increase on the previous year.

    Even the Bank of England, tasked with keeping inflation at 2%, has been caught off guard by stubbornly high food prices, which seem to have barely responded to 12 successive interest rate hikes.

    Food prices have contributed to keeping inflation “higher than we expected it to be,” Bank of England Governor Andrew Bailey told a Treasury committee hearing last week. “We have a lot to learn about operating monetary policy in a world of big shocks,” he admitted.

    The United Kingdom’s inflation problem is now so dire that Sunak is considering asking retailers to cap the price of essential food items, in a throwback to the 1970s. Back then, governments in the United States and United Kingdom imposed wage and price controls to tame inflation, although the policies weren’t very effective at bringing inflation down and were later dropped.

    Economists say that capping prices encourages companies to produce less of a product, while making it more attractive to consumers. Supply goes down, and demand goes up, with shortages being the inevitable result.

    Price controls distort markets and should only be used “in extreme circumstances,” Neal Shearing, group chief economist at Capital Economics, wrote in a note Tuesday. “The current food price shock does not warrant such an intervention,” he added.

    The Sunday Telegraph was first to report the government’s proposal, which was quickly rejected by retailers.

    Andrew Opie, director of food and sustainability at the British Retail Consortium said controls would not make a “jot of difference” to high food prices, which are the result of soaring energy, transport and labor costs.

    “As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from government,” Opie added in a statement. These include tighter rules on recycling and full border controls on food imports from the European Union, due to be implemented by the end of this year.

    According to a government spokesperson, any price caps would not be mandatory. “Any scheme to help bring down food prices for consumers would be voluntary and at retailers’ discretion,” the spokesperson said in a statement shared with CNN.

    Sunak and Finance Minister Jeremy Hunt “have been meeting with the food sector to see what more can be done,” the spokesperson added.

    For Sunak, the pressure is on — particularly ahead of a general election widely expected to be held next year. Inflation was hovering above 10% when he made the promise to halve it in January. It dropped back to 8.7% in April, still well above his target. The Bank of England expects it to fall to “around 5%” by the end of this year, leaving little margin for error.

    According to Opie of the British Retail Consortium, the government should focus on “cutting red tape” rather than “recreating 1970s-style price controls.”

    At the top of the list of burdensome regulations are those introduced as a result of the country’s exit from the European Union, which is its main source of food imports.

    Brexit is responsible for about a third of UK food price inflation since 2019, according to researchers at the London School of Economics.

    New regulatory checks and other border controls added nearly £7 billion ($8.7 billion) to Britain’s domestic grocery bill between December 2019 and March 2023, or £250 ($310) per household, economists at the LSE’s Centre for Economic Performance wrote in a recent paper.

    Food prices rose by almost 25 percentage points over this period. “Our analysis suggests that in the absence of Brexit this figure would be 8 percentage points (30%) lower,” the researchers wrote.

    Imports of meat and cheese from the European Union were now subject to high “non-tariff barriers.”

    — Mark Thompson contributed reporting.

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  • Could the Fed raise rates again in June? | CNN Business

    Could the Fed raise rates again in June? | 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
     — 

    Will the Federal Reserve hike interest rates at its next meeting in June — for the 11th time in a row — or pause? Wall Street seems to be betting on the latter, but it was a topsy-turvy journey to that consensus last week.

    What happened: The Fed’s meeting earlier this month fueled hopes that it was done with rate hikes, at least for now. Then, a slate of economic data last week came in stronger than expected.

    Retail spending rebounded in April after two months of declines, suggesting that consumers are still spending despite tightening their purse strings. Jobless claims declined more than expected for the week ended May 13, staying below historical averages.

    Traders saw a roughly 36% chance last Thursday that the Fed will raise rates by another quarter point in June, up from around 15.5% on May 12, according to the CME FedWatch Tool.

    Then, Fed Chair Jerome Powell weighed in mid-morning Friday. In a panel with former Fed head Ben Bernanke, Powell said that uncertainty remains surrounding how much demand will decline from tighter credit conditions and the lagged effects of hiking rates. Traders pared down their expectations to about a 18.6% chance that the central bank will raise rates next month, as of Friday evening.

    Experts seem to agree that the Fed is unlikely to raise rates again in June. “The absence of any such preparation [for a raise] is the signal and gives us additional confidence that the Fed is not going to hike in June absent a very big surprise in the remaining data, though we should expect a hawkish pause,” Evercore ISI strategists said in a May 19 note.

    Jim Baird, chief investment officer at Plante Moran Financial Advisors, also expects the Fed to hold rates steady in June. But that decision isn’t set in stone, and the Fed will likely monitor three key factors in making its decision, he said. Those are:

    • The debt ceiling. President Joe Biden and congressional leaders have maintained that the US will likely not default on its debt. But if such a scenario were to happen, it could have catastrophic consequences for the economy and financial markets that would require the Fed wait for the crisis to be resolved before taking action.
    • Evolving financial conditions. The collapses of regional lenders Silicon Valley Bank, Signature Bank and First Republic have accelerated the tightening of credit conditions. While that has complicated the Fed’s plan to stabilize prices, it also could benefit the central bank by doing some of its work for it by slowing spending.
    • Delayed impact. The Fed’s interest rate hikes flow through the economy with a lag. So, it will take some months for the full effect of its aggressive tightening cycle to show up in the economy. That means the Fed could want to take a pause to monitor the continuing impact of what it has already done.

    The Fed has also maintained that its actions are data dependent, meaning it will keep close watch on economic data that comes in before it’s due to announce its next rate decision on June 14.

    Some key data points set for release before then include the April Personal Consumption Expenditures price index (that’s the Fed’s preferred inflation metric), May jobs report, the May Consumer Price Index and May Producer Price Index. (The latter two reports are due on the two days the Fed meets.)

    If these data points show considerable weakening in the labor market or continued declines in inflation, that helps make the case for a pause. But signs of a robust economy with little to no signs of slowing down could mean the Fed has more room to tighten — and that it could take that opportunity.

    Morgan Stanley chief executive James Gorman, 64, will step down from his role within the next 12 months, he said Friday at the bank’s annual meeting.

    “The specific timing of the CEO transition has not been determined, but it is the Board’s and my expectation that it will occur at some point in the next 12 months. That is the current expectation in the absence of a major change in the external environment,” Gorman said.

    Gorman, who is one of the longest-serving heads of a US bank and largely responsible for helping lead a sweeping transformation of the company after the 2008 financial crisis, became CEO in January 2010.

    He will assume the role of executive chairman for “a period of time,” Gorman said, adding that the board of directors has three senior internal candidates in the pipeline to potentially take over as the next chief executive.

    Read more here.

    The June 1 ‘X-date’ — the estimated point at which the US Treasury could run out of cash — is fast approaching. For JPMorgan Chase’s Jamie Dimon, another key date is already here.

    The chief executive told Bloomberg earlier this month that he has held a so-called “war room” weekly to prepare the bank for the possibility the United States defaults on its debt. He plans to meet more often as the X-date approaches, and then meet every day by May 21, he said, adding that the meetings will eventually ramp up to take place three times a day.

    “I don’t think [a default] is going to happen, because it gets catastrophic,” Dimon said. “The closer you get to it, you will have panic.”

    Debt ceiling negotiations appeared to be going in a positive direction for most of last week. Both President Joe Biden and House Speaker Kevin McCarthy said that the United States is unlikely to default on its debt and seemed optimistic about the path to a deal.

    But debt ceiling talks between the White House and McCarthy’s office have hit a snag, and negotiators put a pause on the talks, multiple sources told CNN Friday.

    While that doesn’t mean the negotiations are falling completely apart, or that the country is headed for a default, it does pose more challenges for the stock market, which has stayed relatively resilient despite debt ceiling worries starting to slowly creep in.

    Dimon said in the same Bloomberg interview that he’d “love to get rid of the debt ceiling thing” altogether.

    The debt ceiling situation “is very unfortunate,” he said. “It should never happen this way.”

    Monday: JPMorgan Chase investor day.

    Tuesday: April new home sales. Earnings from Lowe’s (LOW).

    Wednesday: May Fed meeting minutes.

    Thursday: GDP Q1 second read, April pending home sales, mortgage rates and weekly jobless claims. Earnings from Costco (COST), Dollar Tree (DLTR) and Best Buy (BBY).

    Friday: April Personal Consumption Expenditures and May University of Michigan final consumer sentiment reading.

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  • Angry lawmakers accuse Fed of inaction in insider trading investigation | CNN Business

    Angry lawmakers accuse Fed of inaction in insider trading investigation | CNN Business

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    CNN
     — 

    Congressional lawmakers grilled Federal Reserve Inspector General Mark Bialek Wednesday over possible insider trading among Fed officials in 2020, accusing the nation’s central bank of inaction.

    The heads of the Boston and Dallas Federal Reserve banks retired early in 2021 after trades they made before and during the pandemic came to light. Bialek said his investigation into any potential legal violations from the trades is “ongoing.”

    A separate investigation by Bialek last year found no wrongdoing stemming from trades by a financial adviser on behalf of Fed Chair Jerome Powell’s family trust and by former Fed Vice Chair Richard Clarida.

    Bialek told members of a Senate Banking Subcommittee on Economic Policy that he was limited in what he could disclose because it would impede his ability to “conduct a thorough, independent investigation” into the former regional bank heads’ trades.

    Sen. Elizabeth Warren, D-Massachusetts, interrupted: “You have had a year and a half,” she said. “This is not strong oversight. In fact, it is not even competent oversight.”

    As Republican and Democratic lawmakers on the subcommittee pointed out, Bialek, who has served in his role since 2011, is appointed by members of the Fed’s Board of Governors, whom he is tasked with investigating. Bialek told lawmakers there was no conflict of interest and that he was still able to conduct fair, independent investigations. Warren, among others, said she was unconvinced.

    “It looks like, to anyone in the public, that you gave your boss a free pass,” she said. “The Fed continues to stonewall Congress, stonewall the public on the underlying information about these trades. This is not acceptable.”

    The Office of Inspector General declined to comment Wednesday night.

    After Silicon Valley Bank collapsed in March, Warren and Republican Sen. Rick Scott of Florida introduced a bill to require a presidentially appointed, Senate-confirmed inspector general to the Fed Board of Governors.

    A separate Fed investigation into SVB’s collapse, not involving Bialek, faulted Fed supervisors. Scott on Wednesday said he lacked confidence in Bialek’s ability to investigate those Fed supervisory lapses.

    “Somebody at the Federal Reserve that was responsible for these banks for supervision clearly did it wrong,” he said Wednesday, referring to bank collapses since 2008. “The average person in America pays for all this.”

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  • Australian gold miner Newcrest backs Newmont’s $17.8 billion offer | CNN Business

    Australian gold miner Newcrest backs Newmont’s $17.8 billion offer | CNN Business

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    Sydney
    Reuters
     — 

    Australian gold miner Newcrest Mining said on Monday it would back Newmont A$26.2 billion ($17.8 billion) takeover offer in one of the world’s largest buyouts so far this year.

    The deal, subject to approval from shareholders of both companies and other regulatory hurdles, would lift Newmon

    (NEM)    t’s gold output to nearly double its nearest rival, Barrick Gold

    (GOLD)    , and catapult the miner past Freeport McMoRan to become the largest US gold and copper producer by market capitalization.

    Newcrest

    (NCMGF)     shareholders would receive 0.400 Newmont share for each share held, with an implied value of A$29.27 a share, higher than a previous exchange ratio of 0.380 that Newcrest

    (NCMGF)    ’s board rejected in February.

    Newcrest shares opened on Monday 1.5% higher at A$28.68, and the offer is a 30.4% premium to the stock’s price in February before the Newmont bid became public.

    Newmont is also allowing Newcrest to pay a franked special dividend of up to $1.10 per share on the implementation of the deal that returns tax credits to Australian shareholders.

    The merger is set to be the third-largest deal ever involving an Australian company and the third-largest globally in 2023, according to data from Refinitiv and Reuters’ calculations.

    “This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline,” said Newcrest Chairman Peter Tomsett.

    Newmont said it would have about 8 million ounces of total combined annual gold production once the deal closed, with more than 5 million gold ounces from 10 long-life and low-cost mines.

    The Denver-based miner added it would have combined annual copper production of approximately 350 million pounds from Australia and Canada.

    Newcrest shareholders will be able to choose to receive New York Stock Exchange-listed Newmont shares or Australian-listed CHESS Depository Instruments (CDIs) as payment.

    Newcrest said it recommended its shareholders vote in favor of the deal at a meeting expected to be held in September or October.

    The deal requires Australia’s Foreign Investment Review Board (FIRB) approval as well as Newcrest and Newmont shareholders to vote in support the transaction, among other regulatory requirements.

    The companies said the deal was due to be finalized in the fourth quarter of 2023.

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  • American consumers are growing worried about a US debt default | CNN

    American consumers are growing worried about a US debt default | CNN

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    Washington, DC
    CNN
     — 

    US consumer sentiment worsened in May as Americans grew concerned about the economy’s direction and a potential default of the US government’s debt, according to a preliminary report from the University of Michigan Friday.

    The political impasse over raising the debt ceiling has dragged on for weeks and is inching closer to the day the federal government will not be able to fully meet its financial obligations. Consumers are now taking notice.

    “While current incoming macroeconomic data show no sign of recession, consumers’ worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff,” Joanne Hsu, director of the surveys of consumers at the University of Michigan, said in a release. “If policymakers fail to resolve the debt ceiling crisis, these dismal views over the economy will exacerbate the dire economic consequences of default.”

    The latest survey showed that the university’s consumer-sentiment index fell by 9% in May. The index’s latest decline wiped out more than half of its gains since recovering from the record low in June 2022.

    “In Washington’s past fiscal games of chicken, sentiment recovered within a few months of the crises ending,” Bill Adams, chief economist at Comerica Bank, wrote in analyst note. “On the other hand, if the government defaults, it won’t be pretty.”

    Pessimism among consumers can have an impact on their spending behavior if their expectations worsen and they decide to pull back. Some data have already pointed to demand for goods weakening some.

    US household spending was flat in March from the prior month, after limping just 0.1% in February. Retail sales sank 0.8% in March from the prior month, following a 0.5% decline in February. The Commerce Department releases April figures on retail spending next week, which will offer additional clues into how demand is shaping up as credit conditions tighten.

    A trio of recent bank failures mean that banks are poised to toughen their lending standards even more, which can dampen demand. A recent survey of loan officers showed that banks were making it harder to access credit even before the failures of Silicon Valley Bank and Signature Bank. Stack on top of that the Federal Reserve’s punishing interest-rate increases and still-high inflation, and consumers might just tap out.

    Many economists, including those at the Fed, expect the US economy to slip into a recession later in the year. A recession is a broad economic downturn that would include weakness in consumption.

    The Conference Board’s sentiment survey showed that consumer confidence worsened in April as Americans became more worried about the jobs market. The business group’s Consumer Confidence Index, which measures attitudes toward the economy and the job market, fell to 101.3 in April, down from 104 in March and marking the lowest level since July 2022.

    The labor market is still going strong. Employers added 253,000 jobs in April, a robust gain, and the unemployment rate fell back to a 53-year low of 3.4% that month. That’s good news, but the job market still isn’t balanced, because “labor demand still substantially exceeds the supply of available workers,” Fed Chair Jerome Powell said in his news conference after officials voted to raise the central bank’s benchmark lending rate by a quarter point earlier this month.

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  • Private equity investor identified as political contributor allegedly duped by George Santos | CNN Politics

    Private equity investor identified as political contributor allegedly duped by George Santos | CNN Politics

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    CNN
     — 

    Private equity investor Andrew Intrater is one of the people federal prosecutors allege Rep. George Santos induced to donate money as part of an alleged scheme that diverted purported political contributions to Santos’ personal use, Intrater’s lawyer confirmed to CNN on Thursday.

    In a 13-count indictment made public Wednesday, prosecutors alleged that Santos and an unnamed associate duped two donors – described only as Contributor #1 and Contributor #2 – into giving $25,000 apiece to support the Republican’s candidacy last year.

    The donors were told the money would go to an independent committee that could raise unlimited amounts to help his campaign and would help underwrite television ads, according to the indictment. Prosecutors, however, say the money instead went to a limited liability company that Santos controlled and the funds paid for designer clothing, credit cards bills and other personal expenses.

    “From the outset, Andy Intrater aided the government’s investigation of George Santos and is identified as a victim in the Indictment as Contributor #2,” Intrater’s lawyer, Richard D. Owens, said in a statement. “Andy is gratified that Santos will now have to answer in court for the many lies George told to Andy and so many other Americans.”

    Santos pleaded not guilty Wednesday in New York and has vowed to fight the charges.

    Intrater has financially supported Santos’ political ambitions in recent years, donating more than $24,000 to Santos’ congressional campaigns and his federal leadership PAC since 2020, Federal Election Commission records show.

    Intrater told The New York Times earlier this year that he also had invested more than $600,000 in a fund offered by Harbor City Capital, where Santos worked as an account manager, partly because he admired Santos as a “hard-working guy.”

    Intrater told the paper he later discovered he had been misled.

    The Securities and Exchange Commission filed a complaint in April 2021 against Harbor City and its founder, Jonathan P. Maroney, alleging the company ran a $17 million “Ponzi scheme.” Maroney has not been charged with a crime, and Santos is not named in the SEC complaint.

    Intrater is perhaps best known in US political circles as a cousin of Viktor Vekselberg, one of several Russian oligarchs sanctioned in 2018 by the US Treasury Department, for “worldwide malign activity.”

    The New York Times earlier reported that Intrater was Contributor #2 in the indictment. CNN has not confirmed the identity of the other contributor described in the indictment.

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  • House Republicans allege Biden family members received millions in payments from foreign entities in new bank records report | CNN Politics

    House Republicans allege Biden family members received millions in payments from foreign entities in new bank records report | CNN Politics

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    Washington
    CNN
     — 

    House Oversight Chairman James Comer laid out new details to support allegations that members of Joe Biden’s family including his son Hunter received millions of dollars in payments from foreign entities in China and Romania including when Biden was vice president, according to a memo obtained by CNN.

    New bank records cited in the memo were obtained by the committee through a subpoena and include payments made to companies tied to Hunter Biden. Republicans also alleged that Hunter Biden used his familial connections to help facilitate a meeting in 2016 between a Serbian running for United Nations Secretary-General and then-national security adviser to the vice president Colin Kahl.

    The foreign payments raise questions about Hunter Biden’s business activities while his father was vice president, but the committee does not suggest any illegality about the payments from foreign sources. The bank records by themselves also do not indicate the purpose of the payments that were made.

    The memo marks Comer’s most direct attempt to substantiate his allegations that Biden family members have enriched themselves off the family name. Comer has suggested that Biden may have been improperly influenced by the financial dealings, particularly by his family’s foreign business partners.

    But the latest report does not show any payments made directly to Joe Biden, either as vice president or after leaving office.

    Comer has been publicly teasing information for months about the paper trail committee Republicans have uncovered through subpoenas sent to multiple banks and trips to the Treasury Department to review records.

    Comer and other Republicans on the committee held a press conference Wednesday morning to tout their findings.

    “These people didn’t come to Hunter Biden because he understood world politics or that he was experienced in it, or that he understood Chinese businesses. They wanted him for the access his last name gave him,” Rep. Nancy Mace, a South Carolina Republican, said during the news conference.

    On Wednesday, Comer was asked about specific policy decisions Biden made while president or vice president that may have been directly influenced by these foreign payments. Comer failed to name any and instead pointed to then-vice president Biden traveling around the world and discussing foreign aid in the last year of the Obama administration, and added they think there are decisions Biden made as president that “put China first and America last.” Comer said the committee “will get into more of those later.”

    Ahead of the memo’s release, White House spokesperson Ian Sams said in a statement to CNN, “Congressman Comer has a history of playing fast and loose with the facts and spreading baseless innuendo while refusing to conduct his so-called ‘investigations’ with legitimacy. He has hidden information from the public to selectively leak and promote his own hand-picked narratives as part of his overall effort to lob personal attacks at the President and his family.”

    Abbe Lowell, counsel for Hunter Biden, said in a statement, “Today’s so-called “revelations” are retread, repackaged misstatements of perfectly proper meetings and business by private citizens. Instead of redoing old investigations that found no evidence of wronging by Mr. Biden, Rep. Comer should do the same examination of the many entities of former President Trump and his family members.”

    The top Democrat on the House Oversight Committee, Rep. Jamie Raskin, said in a statement to CNN, “Chairman Comer has failed to provide factual evidence to support his wild accusations about the President. He continues to bombard the public with innuendo, misrepresentations, and outright lies, recycling baseless claims from stories that were debunked years ago.”

    Bank records cited in the committee’s memo show that within five weeks of then-Vice President Biden’s meeting with Romanian President Klaus Iohannis in 2015, a Romanian who Hunter Biden was doing legal consulting for, Gabriel Popoviciu, started sending money to Rob Walker, a business associate of Hunter’s.

    Walker received more than $3 million from November 2015 to May 2017 and wired approximately $1 million in various installments to Hunter Biden, his business associate James Gillian, and Hallie Biden, the widow of the president’s oldest son, Beau Biden who died in May 2015. Hallie Biden and Hunter Biden were romantically involved for a period after Beau’s death.

    It has long been known that Hunter Biden did legal work for Popoviciu, a wealthy Romanian business executive who was convicted in 2016 on corruption charges.

    Comer’s memo raises questions about why Popoviciu was paying a Biden family business associate directly instead of the law firm where Hunter Biden worked at the time or the other firm Hunter reportedly referred Popoviciu to.

    Former President Donald Trump’s former lawyer Rudy Giuliani was also involved with Popoviciu, which Comer’s memo does not mention.

    Committee Republicans obtained the bank records from subpoenas to four different banks.

    The report also alleges that in 2016, Vuk Jeremic, a Serbian politician who was running for UN secretary-general, tried to use his business relationship with Hunter Biden and his associates to get a meeting with Kahl, who was then an aide in Biden’s vice president’s office.

    In a June 2016 email, Jeremic wrote to Hunter Biden and a business associate, Eric Schwerin, asking to “meet with VPOTUS National Security Advisor Colin Kahl” related to the UN secretary-general election.

    Schwerin instructed Hunter Biden to “Think about how you want to respond,” according to the report.

    In a July 2016 email, Jeremic followed up via email saying, “[m]y meeting with Colin did not last very long, but didn’t go too bad, I think. What is suboptimal is that OVP seems to be outside the decision-making loop on the UNSG elections issue. Colin promised to get better informed on what’s going on at the moment,” according to the report.

    Republicans said they intend to pursue more communications related to the matter, but concluded it appears that “a Biden administration official met with Jeremic to discuss the UN Secretary General election at the direction of Hunter Biden and/or his business associates.”

    Kahl did not immediately respond to a request for comment. Jeremic’s attorneys told the committee in a letter last month he would not cooperate with a request for documents and testimony due to separation of powers issues and because House rules limit subpoenas to people “within the United States.”

    The memo also alleges that two Chinese nationals made payments of $100,000 to Hunter Biden’s professional corporation through a Chinese-backed energy company. Republicans claim that at least one of those individuals had ties to the Communist Party of China.

    The memo alleges that those two individuals were connected to CEFC, a Chinese energy conglomerate, had a business relationship with Hunter Biden.

    Committee Republicans claim one of the individuals “used CEFC to bribe and corruptly influence foreign officials.”

    The memo includes a copy of a bank transaction showing that on August 4, 2017, CEFC Infrastructure wired $100,000 to Owasco P.C, Hunter Biden’s professional corporation.

    The memo also includes details from the bank records on how money was moved between companies, including a $100,000 payment to one of Hunter Biden’s companies that was then funded by a Chinese based firm tied to the CEFC, the Chinese energy conglomerate.

    Comer alleges the transaction “disproves President Biden’s claim that his family received no money from China.”

    In the report, the committee acknowledged there “exist legitimate commercial transactions with China-based entities and individuals.”

    “However, the pattern of behavior engaged in by the Bidens and their Chinese counterparties—memorialized in relevant bank records—signals an attempt to layer companies and cloud the source of money,” the committee alleges.

    Comer has previously revealed that members of Biden’s family received just over $1 million indirectly from State Energy HK Limited, a Chinese company.

    Senate Republicans in 2020 first detailed how Walker made wire transfers to companies associated with Hunter Biden and president’s brother, James, after receiving a $3 million wire from the Chinese company.

    The latest GOP memo claims Walker also sent some of that money to Hallie Biden and an unknown bank account identified as “Biden.”

    Committee Republicans said they are continuing to trace bank records and have written to additional witnesses involved in certain transactions to request documents as well as interviews.

    According to the report, Republicans intend to pursue legislative changes – a key step needed to justify their investigation if fights over subpoenas head to court.

    Those changes include laws that require additional reporting about the finances of a president or vice president’s family members, public disclosure of foreign transactions involving the family members of senior elected officials and an expedited law enforcement review of any suspicious bank activity reports related to a president or vice president’s immediately family members.

    Comer left the door open on whether his committee would investigate the foreign business dealings of former President Donald Trump and his family ahead of making any legislative recommendations to address influence peddling. To date however, Comer has not looked into Trump’s financial dealings or pursued an investigation into the classified documents that he had at Mar-a-Lago.

    “We’re going to look at everything when we get ready to introduce the legislation to ban influence peddling” Comer said. “This has been a pattern for a long time. Republicans and Democrats have both complained about Presidents’ families receiving money.”

    On the foreign business dealings of Trump’s son-in law, Jared Kushner, specifically, Comer said, “I’m not saying whether I agreed with what he did or not, but I actually know what his businesses are. What are the Biden businesses?”

    This story has been updated with additional reporting.

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  • Lachlan Murdoch: No change in strategy at Fox News | CNN Business

    Lachlan Murdoch: No change in strategy at Fox News | CNN Business

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    New York
    CNN
     — 

    Despite a turbulent and expensive few weeks, Fox News isn’t changing course.

    Fox Corp. CEO Lachlan Murdoch said there will be no change in strategy at the company’s top rated cable news network, despite the firing of its top rated anchor Tucker Carlson and a massive $787.5 million settlement to Dominion Voting Systems that resulted in the company swinging to a loss in the just completed period.

    “There is no change to our programming strategy at Fox News,” Murdoch said in response to an analyst who asked about Carlson’s ouster during the investor call Tuesday to discuss its financial results.

    Murdoch described Fox News as “obviously a successful” and suggested Carlson’s firing was a tweaking of its strategy, not a departure from it.

    “As always, we are adjusting our programming and lineup and that is what we continue to do,” Murdoch said.

    His comments came after the company reported a $50 million net loss for the just completed quarter, compared to $290 million in profit a year earlier.

    The reason was a $719 million charge including the cost of the Dominion settlement, other legal settlements related to its news division and other legal costs, including attorney fees, which was partly offset by equity earnings of it affiliates and a change in the market value of some of its investments.

    The earnings statement didn’t mention Dominion Voting Systems, although it does refer to charges related to legal settlement costs at Fox News Media. On the company’s call with investors Murdoch referred to the settlement with Dominion as in the best interest of the company and its shareholders, given rulings by the Delaware court that he said limited its defense. He said going to trial could have led to two to three years of appeals.

    “We’re proud of our Fox News team, the exceptional quality of their journalism and their stewardship of the Fox News brand,” he said. “So as we look ahead, we are confident in the strength of the Fox brands and the strength of our balance sheet.”

    And he again defended the company’s post-election coverage of the false conspiracy theories made against Dominion, even though internal communications among Fox anchors made public during the discovery process showed many of them didn’t believe the claims being made.

    “We always acted as a news organization reporting on the newsworthy events of the day,” Murdoch told investors Tuesday. “Now we have been and remain confident in the merits of our position that the first amendment protects a news organization’s reporting and allegations being made by a sitting president of the United States. However, the Delaware court severely limited our defenses and trial through pre-trial rulings.”

    Fox did not have to apologize or admit wrongdoing as part of the settlement in Dominion’s defamation suit against it, although its statement did say it acknowledged “the Court’s rulings finding certain claims about Dominion to be false.”

    Fox still faces a lawsuit from another voting machine manufacturer, Smartmatic, which is seeking $2.7 billion in damages. Murdoch told investors that case is “fundamentally different” from the Dominion case and that Fox will have greater defenses available to it than in the Delaware court hearing the Dominion case. He predicted that case won’t go to trial until 2025.

    The Dominion settlement was reached on April 18, but it was still reported in Fox’s fiscal third quarter, which concluded March 31. Excluding the legal costs and other special items reported Tuesday, it was a pretty good financial quarter for Fox.

    It reported adjusted earnings of $494 million, or 94 cents a share, up from $459 million a year earlier. That was better than the 87 cents a share forecast by analysts surveyed by Refinitiv. The company was helped by the profits and revenue gain it received from airing this year’s Super Bowl.

    Revenue at the company rose 18% to $4.1 billion, slightly higher than analysts’ forecasts. Most of that gain was due to a 43% surge in advertising revenue, helped greatly by $650 million in Super Bowl ads. Fox did not broadcast the Super Bowl in 2022.

    Fox had plenty of money available to pay the settlement. It said it had $4.1 billion in cash and cash equivalent on hand as of March 30, about three weeks before the settlement was reached. It also announced it repurchased $1.8 billion of its shares in the nine months ending March 31, as part of a $7 billion share repurchase plan. So far, Fox has repurchased $4.4 billion worth of shares as part of its plan.

    Murdoch said Fox is better positioned than many other media companies to ride out the delays and lost revenue that could take place from a prolonged strike by the Writers Guild of America. Some programming, such as late night shows, have already gone dark due to the strike that started last week, and production on other shows has been halted.

    But Murdoch said the fact that Fox has more of its revenue and profit coming from sports and news, which are not affected by the strike, puts it in a better position.

    “Our healthy balance of scripted and unscripted content on the network puts us in a tremendous position,” he said.

    The hit from the settlement was well known by investors ahead of the report. But even with the better than expected results, Fox

    (FOX)     shares were up only about 1% in trading at the market open following the report.

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  • 5 things to know for May 8: Texas shooting, King Charles, Title 42, Measles, ChatGPT | CNN

    5 things to know for May 8: Texas shooting, King Charles, Title 42, Measles, ChatGPT | CNN

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    CNN
     — 

    American flags will be lowered to half-staff this week at the White House, on military bases, and at all public buildings to honor the victims of the deadly mass shooting in Texas over the weekend. In the wake of the massacre, President Joe Biden again urged Congress to act: “Too many families have empty chairs at their dinner tables. Tweeted thoughts and prayers are not enough,” he said.

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

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

    Eight people were killed and at least seven others were wounded when a gunman opened fire at an outlet mall in Allen, Texas, on Saturday — the latest mass shooting to shatter an American community. A Dallas-area medical group said it was treating patients ranging from age from 5 to 61 years old. The 33-year-old shooter was killed by a police officer who was already at the Dallas-area mall on an unrelated call. The gunman was armed with an AR-15 style rifle and had multiple weapons in his vehicle, according to police. The shooter’s motive remains unclear at this time, but officials are investigating his potential ties to right-wing extremism after he was found with an insignia on his clothing worn by some members of extremist groups, a law enforcement source said. Officials have also found he had an extensive social media presence that included neo-Nazi and White supremacist-related posts.

    Britain’s King Charles III was crowned Saturday in a once-in-a-generation royal event witnessed by hundreds of high-profile guests inside Westminster Abbey, as well as tens of thousands of well-wishers who gathered in central London. Scores of foreign dignitaries, British officials, celebrities and faith leaders attended the deeply religious ceremony. Once the King was crowned, his wife, Queen Camilla, was crowned in her own shorter ceremony. On Sunday, thousands of events and parties took place across the UK as part of the “Coronation Big Lunch.” But the historic weekend did not go without a display of dissidence. Police arrested more than 50 people during the coronation after controversially promising a “robust” approach to protesters.

    Missed it? Here’s King Charles’ coronation in 3 minutes

    The US is expecting to see an influx of border crossings when Title 42, the Trump-era policy that allowed officials to swiftly expel migrants who crossed the border illegally during the Covid-19 pandemic, expires on Thursday. Without Title 42, the primary border enforcement tool since March 2020, authorities will be returning to decades-old protocols at a time of unprecedented mass migration in the region, raising concerns within the Biden administration about a surge in the immediate aftermath of the policy’s lifting. Also on Thursday, the House is set to vote on Republicans’ wide-ranging border security package, GOP leadership sources told CNN. Last month, House Majority Leader Steve Scalise said Republicans have the necessary votes to pass the legislation in the chamber.

    exp NYC prepares migrant surge Pazmino 05072PSEG1 cnn world_00002001.png

    U.S. prepares for a surge of migrants ahead of the end of Title 42

    A child in Maine has tested positive for measles, officials said, marking the first case in the state since 2019. Measles was declared eliminated from the US in 2000 thanks to an intensive vaccination program, according to the CDC. But vaccination rates in the US have dropped in recent years, sparking new outbreaks. The CDC recommends all children get two doses of the MMR (measles-mumps-rubella) vaccine; the first dose between 12 to 15 months of age and the second between the ages of 4 to 6. The child who tested positive had received a dose of the measles vaccine, but is being considered “infectious out of an abundance of caution,” the Maine CDC said. There have been a total of 10 documented cases of measles in eight states this year.

    vaccines 2 cfb

    How vaccines stop the spread of viruses

    ChatGPT, a chatbot powered by artificial intelligence, can pick stocks better than your fund manager, analysts say. A recent experiment found that the bot far outperformed some popular UK investment funds — and funds managed by HSBC and Fidelity were among those selected. Between March 6 and April 28, a dummy portfolio of 38 stocks gained 4.9% while 10 leading investment funds clocked an average loss of 0.8%, the results showed. The analysts asked ChatGPT to select stocks based on some common criteria, including picking companies with a low level of debt and a track record of growth. Microsoft, Netflix, and Walmart were among the companies selected. While major funds have used AI for years to support their investment decisions, analysts say ChatGPT has put the technology in the hands of the general public — and it’s showing it can potentially disrupt the finance industry. 

    MTV Movie & TV Awards 2023: See who won

    Tom Cruise accepted an award for “Top Gun: Maverick” while flying a plane — because he’s Tom Cruise. Here are the other stars who received golden popcorn statuettes on Sunday.

    A mother-daughter moment: Regal twinning at coronation catches eyes

    Princess Catherine of Wales and her daughter, Princess Charlotte, made a statement in matching silver headpieces. See the photo here.

    Bronny James, son of NBA superstar LeBron James, commits to the University of Southern California

    The NBA’s all-time leading scorer made headlines last year when he said he wanted to play his final season in the league alongside his son Bronny. The father-son duo is now one step closer to that reality.

    ‘Saturday Night Live’ didn’t air a new episode this past weekend

    Former cast member Pete Davidson was set to return as host for “SNL” but things didn’t go as planned due to the ongoing film and TV writers strike.

    Climate activists dye iconic Italian fountain water black

    Onlookers snapped pictures as protesters were arrested for defacing this popular monument.

    111 degrees Fahrenheit

    That’s how high temperatures reached in Vietnam over the weekend, the highest ever recorded in the country. Neighboring Laos and Thailand also recently shattered various temperature records as a brutal heat wave continues to grip Southeast Asia. 

    “This tangled web around Justice Clarence Thomas just gets worse and worse by the day.”

    — Senate Judiciary Chair Dick Durbin, telling CNN on Sunday that “everything is on the table” as the panel scrutinizes new ethics concerns around Supreme Court Justice Clarence Thomas. The conservative justice is receiving criticism after a bombshell ProPublica report detailed he accepted several lavish trips and gifts from GOP megadonor Harlan Crow. Thomas also accepted free rent from the Republican billionaire for his mother and allowed him to pay the boarding school tuition for his grandnephew, according to ProPublica.

    dick durbin sotu iso 5 7 23

    ‘It embarrasses me’: Senate Judiciary chair on Justice Thomas revelations

    Check your local forecast here>>>

    Parrots learn to call their feathered friends on video chat

    These parrots were taught to ring a bell whenever they want to caw their fellow bird friends! See them in action. (Click to view)

    Parrots Video Chat 3

    Parrots learn to call their feathered friends on video chat

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

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

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    CNN
     — 

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

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

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

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

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

    Official describes suspect found hiding in laundry

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

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

    Strike means TV shows and films in jeopardy

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

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

    exp sudan ceasefire madowo FST 050312ASEG1 cnni world_00002001.png

    Seven-day ceasefire expected to begin Thursday in Sudan

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

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

    Cockroach at the Met Gala goes viral

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

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

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

    NBA announces Most Valuable Player for 2022-2023

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

    Webb telescope detects mysterious water vapor in a nearby star system

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

    Kevin Costner and wife Christine Baumgartner are getting a divorce

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

    0

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

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

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

    Check your local forecast here>>>

    Teen’s grand entrance steals the show at prom

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

    Tank To Prom 1

    Teen’s grand entrance steals the show at prom

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

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

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    New York
    CNN
     — 

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

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

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

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

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

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

    Adidas

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

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

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

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

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

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

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    New York
    CNN
     — 

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

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

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

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

    Shares of First Republic

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

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

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

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

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

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

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

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

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

    (JPM)    , Bank of America

    (BAC)    , Wells Fargo

    (WFC)    , Citigroup

    (C)     and Truist

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


    New York
    CNN
     — 

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

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

    It certainly fits the bill: First Republic

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

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

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

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

    But what’s actually happening here?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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