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Rawcession, Charles Schwab has Trouble and Saied Gets Pink Eye
Episode 1294th April 2023 • The Higher Standard • Chris Naghibi & Saied Omar
00:00:00 01:24:21

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As the US banking crisis drags on, investors are starting to unearth risks within Charles Schwab that have been hiding in plain sight. Unrealized losses on the firm’s balance sheet, loaded with long-dated bonds, ballooned to more than $29 billion last year. At the same time, higher interest rates are encouraging customers to move their cash out of certain accounts that underpin Schwab’s business and bolster its bottom line.

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.


They discuss news that Credit Suisse, the collapsed Swiss bank taken over by UBS Group in a hastily arranged bailout, has provided a safe haven for wealthy American clients to hide assets from the IRS — even after it was caught and prosecuted for doing the same thing more than a decade ago, according two former Credit Suisse bankers who are working with the U.S. government as whistleblowers.


Chris and Saied look at a report from the Labour Department, indicating that jobless claims for the week ended March 25 totaled 198,000, up 7,000 from the previous period and a bit higher than the 195,000 estimate.


They also offer some thoughts on the recent news that Binance Holdings, the world’s largest cryptocurrency exchange, and CEO Changpeng "CZ" Zhao, are being sued by a US regulator for allegedly breaking trading and derivatives rules. The Commodity Futures Trading Commission said Binance shirked its obligations by not properly registering with it.


Join Chris and Saied for this fascinating and informative conversation.


Enjoy!


What You’ll Learn in this Show:

  • Where Silicon Valley Bank falls in line with the other banks across the country.
  • How a company’s market capitalization is estimated.
  • Why pending home sales were up 0.8% month over month in February.
  • The concept of a mansion tax.
  • And so much more...


Resources:

"First Citizens shares soar 50% after the bank buys a large chunk of failed Silicon Valley Bank" (article from CNBC)

"Where Financial Risk Lies, in 12 Charts" (article from The Wall Street Journal)

"Charles Schwab's $7 trillion empire built on low rates is showing cracks" (Bloomberg Businessweek via Instagram)

"Minneapolis Fed chair Neel Kashkari says "fundamentally, the banking system is sound"" (CBS News)

Debt on Blackstone buildings 47% more than portfolio's worth" (The RealDeal via Instagram)

"Apple plans to launch Apple Pay later - allowing users to split purchases into four payments with no additional fees” (Complex via Instagram)

Nick Gerli via Twitter

“Jobless claims edge up to 198,000, higher than expected” (article from CNBC)

"Binance crypto exchange and CEO "CZ" Zhao sued by US regulator" (Bloomberg Business via Instagram)

"Look: The Brutal Layoff Email Disney CEO Bob Iger Sent Employees Today" (article from TheStreet)

StockMKTNewz - Evan via Twitter

"Higher Rates Are Coming for U.S. Companies" (article from The Wall Street Journal)

"Markets Are Wrong on US Rate-Cut Bets, BlackRock Says" (article from Yahoo! Finance)

"A Tale of Two Housing Markets: Prices Fall in the West While the East Booms" (article from The Wall Street Journal)

"Binance Sued by CFTC Over Evading U.S. Rules" (article from The Wall Street Journal)

"Binance Sees $2 Billion in Outflows as Troubles Compound" (article from The Wall Street Journal)

"US pending home sales rise for third straight month; loan demand increases" (article from Reuters)

"Credit Suisse whistleblowers say Swiss bank has been helping wealthy Americans dodge U.S. taxes for years" (article from CNBC)

"Thanks to regulators, SVB will be the most costly bank failure in history" (article from The Hill)