Stocks plunged Wednesday morning following reports of more trouble in the banking sector. Shares of the Swiss bank Credit Suisse tumbled more than 30 percent after its biggest shareholder, the Saudi National Bank, said it could no longer provide funding.
The news from Europe sowed more fear about the state of banking, which has struggled in the wake of Silicon Valley Bank's (SVB) collapse over the weekend.
Though the bank's financial troubles initially appeared contained, cracks have since appeared in other mid-sized commercial banks in the United States.
Shares of another San Francisco-based lender, First Republic, fell more than 60 percent on fears that the SVB collapse would spread. The company has since secured additional funding from JPMorgan, and its stock bounced back some from the heavy losses.
Meanwhile, Signature Bank actually did collapse over the weekend, as its connections with the cryptocurrency sector and other tech businesses stoked fears among depositors after the collapse of SVB, which also catered to the industry.
But Credit Suisse's problems began long before the latest wave of U.S. bank failures.
The company this week ended executive bonuses after reporting its worst annual performance since the Great Financial Crisis of 2007-2008. It also admitted that its internal financial reporting systems had failed to identify potential risks.
The report noted that "AG did not design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements within this system."
While the Swiss bank is facing its own issues, there is one striking similarity to the situation at SVB: Depositors are pulling their money out of the bank.
The bank said its weak performance in the fourth quarter of 2022 was due to a "challenging economic and market environment," including "significant deposit and net asset outflows at the beginning of the quarter."
The outflow really ramped up in October of last year after depositors began to lose faith in the bank's ability to manage risk and, in particular, the cost of insuring its debt. Despite an aggressive campaign to win back customers, the exodus continued into this month.
Joe Cecela, Dream Exchange CEO, explains how they are aiming to form the first minority-controlled company to operate an exchange in U.S. history. Watch!
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
