What we’re reading (3/26)
“Commercial Real Estate Is The Next Shoe To Drop For Regional Banks And The Stock Market” (Business Insider). “A potential credit crunch in the sector, sparked by a wave of upcoming refinancings of commercial real estate loans at much higher interest rates than in the past, could send stocks spiraling and the economy into a recession.”
“Welcome To The Superprime Banking Crisis” (Wall Street Journal). “Banking’s last crisis featured subprime borrowers, specifically people with troubled credit who were given mortgages by bankers who ignored the risk that the borrowers wouldn’t realistically be able to afford them. Banks that got into trouble were ones that churned out such loans or gorged on them in securitized form. The current emerging turmoil is, so far, featuring the opposite. Banks such as Silicon Valley Bank and Signature Bank that catered to some of the wealthiest, most creditworthy clients—those with superprime credit scores—are the ones running into the biggest problems.”
“Interpol Confirms Arrest Of Crypto Fugitive Do Kwon In Montenegro” (CNN Business). “Interpol says a man arrested in Montenegro is Kwon Do-hyeong, also known as Do Kwon, the disgraced founder of a collapsed crypto company who is wanted in South Korea and the United States on fraud and other charges…Kwon’s identity was confirmed through a fingerprint match, Interpol’s national central bureau in Seoul told CNN on Friday.”
“Funding Unprofitable Growth” (Smead Capital Management). “The current tribulation is closely associated with a myriad of startup companies in everything from tech to clean energy. The Federal Reserve tightened credit by taking short-term rates to 4.75% from nearly zero. In the process, we are now learning that the regional banks most closely associated with new technologies have severe problems and a few have been shut down by the government. The flow of funds to venture capital investments and profit-less growth businesses could possibly come to a halt.”
“Ford CEO On EV transition: ‘Batteries Are The constraint’” (Yahoo! Finance). “Companies such as Ford (F) are collectively pouring hundreds of billions of dollars into electric vehicles (EVs). But as the industry transitions toward zero carbon emissions, battery supply chains could stand in the way of those ambitions.”
