Category: Bank of America

10,000 People Will Lose Their Job in UBS Credit Suisse Merge

Market News Today - 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.
Market News Today – 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.

(WSJ) UBS has agreed to buy Credit Suisse, its beleaguered rival, the Swiss government said on Sunday, in a hastily arranged deal meant to shore up the global financial sector after a week of turmoil.

Swiss government leaders and regulators said that the deal was the most effective way of reassuring investors after Credit Suisse’s shares tumbled following the implosion of Silicon Valley Bank earlier this month.

To help support UBS, the Swiss National Bank agreed to lend up to 100 billion Swiss francs, or $108.8 billion.

And Finma, the Swiss financial regulator, said it would temporarily suspend some regulations to help UBS digest its chief competitor.

The takeover of Credit Suisse is the most consequential fallout to date from the turmoil that spread from the implosion of Silicon Valley Bank earlier this month.

But Credit Suisse’s troubles were largely of its own making, tied to years of scandals and financial missteps that have cost it billions of dollars in trading losses and legal fines.

UBS will is expected to pay just a fraction of the roughly 8.8 billion Swiss francs, or $9.5 billion, that Credit Suisse was valued at on Friday, these people said.

They cautioned that the terms are still being negotiated last minute and talks may still fall apart.

Credit Suisse clients have been withdrawing billions of dollars in the past months.

In November, the bank had warned investors in a 6-K filing of potential losses due to naked short covering.

UBS and Credit Suisse Merge to Spark Massive Unemployment

Market News Today - 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.
Market News Today – 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.

UBS is asking the Swiss government to cover about $US6 billion in costs if it were to close the deal with Credit Suisse.

The 167-year-old Credit Suisse is the biggest name involved in the turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week.

During the collapse of SVB, we saw Wall Street banks lose more than $55 billion in just one day alone.

JPMorgan, the biggest US bank, alone saw a $22 billion tumble in its market value as its stock slid 5.41% to $130.34.

Wall Street’s Bank of America lost $16.16 billion as its share price fell 6.20% to $30.54.

Wells Fargo and Morgan Stanley saw their market capitalization drop by $10.3 billion and $6.2 billion, respectively.

The $US6 billion in government guarantees UBS is seeking would cover the cost of winding down parts of Credit Suisse and potential litigation charges, two people told Reuters.

One of the sources cautioned that the talks to resolve the crisis of confidence in Credit Suisse are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine.

Swiss regulators are racing to present a solution for Credit Suisse before markets reopen on Monday, but the complexities of combining two behemoths raises the prospect that talks will last well into Sunday, said the person, who asked to remain anonymous because of the sensitivity of the situation.

Credit Suisse, UBS and the Swiss government declined to comment.

Warren Buffett and Biden Administration Officials Meet

Berkshire Hathaway’s Warren Buffett has held discussions with senior Biden administration officials about the banking crisis, a source told Reuters.

The White House and US Treasury declined to comment. Bloomberg News reported earlier that Buffett had been in touch with the administration in recent days about the regional banking crisis, Bloomberg News reported on Saturday.

The source declined to elaborate on the details of the discussions.

Market News Published Daily

Market News Today - 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.
Market News Today – 10,000 people Will Lose Their Job in UBS Credit Suisse Merge.

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SVB Distributed Bonuses Hours Before Bank Collapsed

Banking News: SVB gave company-wide bonuses hours before it collapsed.
Banking News: SVB gave company-wide bonuses hours before it collapsed.

Silicon Valley Bank employees received their annual bonuses on Friday just hours before the government took control of the company, according to Fox Business.

The Santa Clara, California-based band collapsed last week and is now under the control of federal regulators.

SVB had been the 16th-largest bank in the U.S. prior to the bank run that led to its downfall.

The bank held a reputation as a go-to for a number of Silicon Valley industries and startups.

Y Combinator, an incubator startup that launched Airbnb, DoorDash and DropBox, regularly referred entrepreneurs to them.

SVB’s collapse was so quick that, hours before its closure, some industry analysts were hopeful that the bank was still a good investment.

The bank’s shares had fallen by 60% on Friday morning after a similar drop the day before. 

Anxious depositors rushed to withdraw their money over concern for the bank’s health, causing its collapse, which may serve as “an extinction-level event for startups,” according to Y Combinator CEO Garry Tan.

Entrepreneur and Dallas Mavericks owner Mark Cuban called for federal regulators to buy out the bank earlier on Friday.

“The Fed should IMMEDIATELY buy all the securities/debt the bank owns at near par, which should be enough to cover most deposits,” Cuban wrote as part of a lengthy Twitter chain last week. “Any losses paid for in equity and new debt from the new bank or whoever buys it. The Fed knew this was a risk. They should own it.” 

SVB traditionally processes annual bonuses on the second Friday of March, unnamed sources associated with the bank told CNBC.

The bonuses were reportedly for work completed in 2022.

Banking News: Wall Street Banks Face Distress

Silicon Valley Bank (SVB) isn’t the only bank experiencing serious distress.

Wall Street banks lost $55 billion in just one day last week.

Four of America’s biggest banks lost a combined $55 billion of market value in a single day as financial stocks plunged.

US bank shares took a beating Thursday amid fears of contagion effects from the turmoil at Silicon Valley Bank and Silvergate.

JPMorgan saw the biggest tumble in market value among US lenders, losing $22 billion. 

(Markets Insider) JPMorgan Chase, Bank of AmericaWells Fargo and Morgan Stanley – the four most valued US lenders – saw $55 billion wiped off their combined market capitalization on Thursday, Refinitiv data show.

JPMorgan, the biggest US bank, alone saw a $22 billion tumble in its market value as its stock slid 5.41% to $130.34.

Wall Street’s Bank of America lost $16.16 billion as its share price fell 6.20% to $30.54.

Wells Fargo and Morgan Stanley saw their market capitalization drop by $10.3 billion and $6.2 billion, respectively.

Credit Suisse Bank Sees Billions in Withdraws

Credit Suisse (NYSE:CS) clients have withdrawn billions of dollars in the past several months.

In November, the bank warned investors in a 6-K filing of potential losses due to naked short covering, which as scared investors from losing most if not all of their money.

Credit Suisse also took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets.

This has fueled widespread withdraws from the bank leading it to borrow money.

The bank hired 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

Credit Suisse has postponed publication of its annual report after a last-minute call from the United States Securities and Exchange Commission (SEC), which raised questions about its earlier financial statements.

The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions.

Market News Published Daily

Banking News: SVB gave company-wide bonuses hours before it collapsed.
Banking News: SVB gave company-wide bonuses hours before it collapsed | SVB News.

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Credit Suisse Clients Are Withdrawing Billions of Dollars

Market News Daily: Credit Suisse clients withdraw billions.
Market News Daily: Credit Suisse clients withdraw billions.

Credit Suisse (NYSE:CS) clients have withdrawn billions of dollars.

In November, the bank warned investors in a 6-K filing of potential losses due to naked short covering.

Disarming these types of overleveraged positions won’t be easy.

Credit Suisse took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets.

Now Credit Suisse as postponed publication of its annual report, per Reuters — more on that below.

The bank hired 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

Is Credit Suisse on the verge of collapsing?

Here’s the latest Credit Suisse news and update.

Credit Suisse Delays Annual Report..

(Reuters) Credit Suisse has postponed publication of its annual report after a last-minute call from the United States Securities and Exchange Commission (SEC), which raised questions about its earlier financial statements.

The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions.

Credit Suisse shares were close to their all-time low in Zurich on Thursday but later recovered much of a 6% loss.

The Zurich-based bank said the SEC had called it late on Wednesday regarding “certain open SEC comments about the technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”

The bank had revised how it booked a series of cash flows, including share-based compensation and foreign exchange hedges.

Credit Suisse (CSGN.S) said that following the call it had decided to postpone publication of its 2022 annual report.

“Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” it said, adding that the 2022 financial results “are not impacted”.

The SEC declined to comment on the matter, a spokesman for the organization said.

Other regulatory authorities were not involved, a person familiar with the matter said.

Swiss financial regulator Finma told Reuters that Credit Suisse had informed it of the delayed publication.

“We are in contact with the bank,” Finma said.

The Bank Signals Red Flags and Raises Concerns

It remains unclear when the annual report will be released.

The delay was unusual, said five attorneys and experts.

“The disclosure is strategically and carefully worded so as not to raise alarms,” said Jacob Frenkel, a former SEC enforcement attorney who is now government investigations and securities enforcement practice chair for law firm Dickinson Wright.

It “lays the groundwork for the explanation for the revisions to the financial statements. Nothing about the release has an ‘enforcement’ centric tone.”

Still, the Credit Suisse announcement concerned analysts.

“(It) does not help investor sentiment and it does not help in rebuilding trust,” said Andreas Venditti from Vontobel.

Daniel Bosshard from Luzerner Kantonalbank described Credit Suisse as “a major construction site” and said “the share is only suitable for turnaround speculators.”

In February, Credit Suisse reported that 2022 brought its biggest annual loss since the 2008 global financial crisis after rattled clients pulled funds from the bank, and it warned that a further “substantial” loss would come this year.

Among a string of scandals, Credit Suisse was hard hit by the collapse of U.S. investment firm Archegos in 2021 as well as the freezing of billions of supply chain finance funds linked to insolvent British financier Greensill.

The bank was also rocked by a prosecution in Switzerland involving laundering money for a criminal gang.

Meanwhile, credit ratings agency Standard & Poor’s downgraded Credit Suisse to just one level above so-called junk status in November last year.

Credit Suisse Warns Investors of Naked Short Covering

The SEC released Credit Suisse’s 6-K filing where the bank warns investors of potential losses due to naked short covering, more on that below.

Credit Suisse took a massive hit of $4.09 billion in Q3 and hints at occurring losses in an upturn in markets.

The bank recently called out AMC Entertainment predicting shares to fall to $0.95 despite the bank’s shares trading below the movie theatre chain company.

Now Credit Suisse is hiring 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

In this 6-K filing, Credit Suisse warns investors of potential losses due to the high possibility of naked short covering.

In a statement, the bank says, “Conversely, to the extent that we have sold assets that we do not own, or have net short positions, in any of those markets, an upturn in those markets could expose us to potentially significant losses as we attempt to cover our net short positions by acquiring assets in a rising market.

“Market fluctuations, downturns and volatility can adversely affect the fair value of our positions and our results of operations.

Adverse market or economic conditions or trends have caused, and in the future may cause, a significant decline in our net revenues and profitability.”

The closing of naked shorts would send affected securities soaring as buying momentum compounds.

Heavily shorted stocks may squeeze in the process, but the results would be disastrous to short sellers.

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Market News Today – Credit Suisse Clients are Withdrawing Billions of Dollars.

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These Companies Are Facing Massive Layoffs This Year

which companies are laying off employees this year?
Market News: Which companies are laying off employees this year?

Some of the biggest companies in the U.S. are facing massive layoffs this year as well as slashing salaries for big executives.

Many employees began to get laid off since the last quarter of 2022.

However, the trend continues into 2023 as a recession looms.

The workforce is expected to shrink for majority of the year according to Bank of America economists.

“There is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year,” said Wells Fargo CEO Charlie Scharf.

Which companies are laying off employees in 2023?

  1. PayPal – 2,000 employees
  2. FedEx – More than 10% of its workforce
  3. Ford – 3,200 employees
  4. Amazon – 18,000 employees
  5. Wayfair – 10% of its workforce
  6. Goldman Sachs – 3,200 employees
  7. Twitter – 7,700 employees
  8. Microsoft – 10,000 employees

“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.

There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.

But many Americans already believe the U.S. is already in a recession.

Nearly 77% of market participants said they expect a recession in 2023 with many arguing the U.S. economy has already been in one since last year.

Do you think we will go into a recession this year?

Vote using the poll above or leave a comment down below.

1. PayPal – 2,000 employees

PayPal layoffs
Companies laying off in 2023.

The cuts account for around 7% of the company’s workforce and will take place over the next few weeks, CEO Dan Schulman said in a statement.

Schulman emphasized that the company was operating in a “challenging macroeconomic environment,” and said that while the company had made progress getting its cost structure under control, it had “more work to do.”

The CEO wrote that laid-off workers would be given severance and support after they departed the company.

“We will treat our departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required, and support them with their transitions,” he wrote. “I want to express my personal appreciation for the meaningful contributions they have made to PayPal.”

Source(s): Fortune.

2. FedEx – More than 10% of its workforce

FedEx announced plans on Wednesday to cut 10% of its officer and director team, one day after PayPal, HubSpot and HarperCollins announced rounds of layoffs—making them the latest U.S. companies to reduce their head counts as recession fears linger into 2023.

The company employs approximately 547,000 people.

Employee layoffs are reported to be full-time positions with at least 90 FedEx office locations closing this year.

3. Ford – 3,200 employees

Ford Motor Co. plans to cut about 3,200 jobs across Europe, following workforce reductions in the US as the automaker slashes costs in a shift toward electric vehicles.

The European cutbacks come after Ford already eliminated 3,000 jobs primarily in the US in the second half of last year.

Chief Executive Officer Jim Farley is targeting $3 billion in cuts as he seeks to boost profits from traditional internal combustion engine models to help finance the $50 billion he is pouring into developing electric vehicles.

“We absolutely have too many people in some places, no doubt about it,” Farley told analysts in July after Bloomberg broke the news of the coming job cuts. “We have skills that don’t work any more, and we have jobs that need to change.”

4. Amazon – 18,000 employees

Amazon Layoffs 2023
Layoff News Amazon – Which companies are laying off employees in 2023?

Amazon’s 18,000-plus job cuts announced this month are being felt broadly across the company’s sprawling operations, from physical retail technology and grocery stores to robotics and drone delivery, and even in cloud computing.

That’s according to a spreadsheet created after the layoff announcement by an employee, who has encouraged those affected to submit their information for use by recruiters. The database, which was circulated widely on LinkedIn, provides a window into the businesses hit with layoffs.

CEO Andy Jassy wrote in a blog post in early January that “several teams” were impacted but that the cuts would primarily be centered in Amazon’s worldwide stores and human resources divisions.

Beyond that, the company provided scant details on where downsizing would take place in 2023.

5. Wayfair: 10% of its workforce

Wayfair’s stock price jumped more than 20% last Friday after the retail giant said it will let go of roughly 1,750 employees, or 10% of its global workforce, to support company-wide cost reductions.

The announcement marks Wayfair’s second round of job cuts in less than six months since the retailer let go of about 5% of its workforce in August.

Executives expect the two rounds of layoffs will save $750 million a year, according to a press release.

6. Goldman Sachs – 3,200 employees

Goldman Sachs Layoffs 2023
Which companies are laying off in 2023?

Goldman Sachs said on Jan. 17 it had laid off around 3,200 employees as part of a headcount reduction, per Reuters.

The bank said its board had awarded Chief Executive David Solomon compensation of $25 million for his work in 2022, compared with $35 million the previous year.

This comes to a reduction of approximately one third.

Morgan Stanley also paid less to Chief Executive James Gorman, though only by 10%. 

Bank of America, one of the largest banks in the U.S. is also preparing to trim its workforce in an effort to cut expenses over fears of a looming recession.  

7. Twitter – 7,700 employees

Twitter had laid off 7,700 employees after the Musk takeover.

The company plans to lay off 50 workers in the social media site’s product division in the coming weeks, news site Insider reported on Wednesday, citing two people familiar with the company.

The layoffs, which come six weeks after top boss Elon Musk reportedly told staff that there would not be further retrenchment, could reduce the company’s headcount to under 2,000, according to the report.

However, Elon Musk also confirmed Twitter would be hiring some at some point to which he did not specify in 2023.

elon musk hiring

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8. Microsoft – 10,000 employees

The job cuts, which amount to less than 5 percent of the company’s work force, are its largest in roughly eight years.

Microsoft on Wednesday became the latest addition to a growing list of big technology companies that have announced plans to lay off employees because of over hiring during the pandemic and worries about the economy.

The company will lay off 10,000 workers, Satya Nadella, Microsoft’s chief executive, said, as it looks to trim costs amid economic uncertainty and to refocus on priorities such as artificial intelligence.

Microsoft employed about 221,000 workers as of the end of June, and the cuts amount to less than 5 percent of its global work force.

JPOW says no recession

Jerome Powell said on Wednesday’s FOMC day to expect soft layoffs but no recession.

Powell says that the disinflationary process has started, stating he’s confident inflation back down to 2% is possible, but this means keeping rates higher for a longer period of time.

The fed says it expects the economy to have positive but suppressed growth in 2023, at least +1%.

I’m curious to hear your thoughts on the economy this year.

All signs point to a recession, is the fed prolonging official announcements?

Leave a comment below.

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Goldman Sachs Lays Off 3,200 Employees and Cuts Salaries

Goldman Sachs Layoffs
Market News: Goldman Sachs layoffs exceed more than 3,000 employees.

Goldman Sachs said on Jan. 17 it had laid off around 3,200 employees as part of a headcount reduction, per Reuters.

The bank said its board had awarded Chief Executive David Solomon compensation of $25 million for his work in 2022, compared with $35 million the previous year.

This comes to a reduction of approximately one third.

Morgan Stanley also paid less to Chief Executive James Gorman, though only by 10%. 

Bank of America, one of the largest banks in the U.S. and one of is preparing to trim its workforce in an effort to cut expenses over fears of a looming recession.  

Recession 2023

bank of america
Bank of America recession news | Goldman Sachs lays off 3,200 people.

Bank of America said in December it is expecting a recession to hit the U.S by the first quarter of 2023.

There is a major slowdown happening says CEO Brian Moynihan.

Economists are now expecting a volatile market to persist in 2023.

A recession may be coming in the first quarter of 2023, according to forecasts by Bank of America (BofA) economists.

“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.

There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.

More than half or 56% of Americans believe the country is in a recession, according to a recent poll by YouGovAmerica and The Economist. 

“There is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year,” said Wells Fargo CEO Charlie Scharf.

Additional source(s): Reuters.

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Market News Today: Goldman Sachs lays off 3,200 people – Goldman Sachs Layoffs.

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