Plus, protests in France over President Macron's pension reform.
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U.S. banks borrowed a record amount from the Federal Reserve’s discount window over the last week amid heavy deposit withdrawals. For the week ended Wednesday, banks borrowed an average of $117B per night, up from an average of $32B from the prior week and more than the average of $112B during the 2008 financial crisis. More: - Banks also took advantage of the Fed’s new lending program, Bank Term Funding Program (BTFP).
- The BTFP allows banks to take advances from the Fed for up to a year by pledging Treasurys, mortgage-backed bonds, and other debt as collateral.
- The lending program allows banks to pledge their bonds so they can meet customer withdrawals without having to sell their bonds at a loss.
- Silicon Valley Bank had to sell its bonds at a loss to meet customer withdrawal requests.
- According to the FDIC, U.S. banks had about $620B in unrealized losses on securities at the end of 2022.
In related news: - According to PitchBook LCD, no companies with investment-grade credit ratings sold new bonds from Mar. 10 through Mar. 17.
- Also, no company has gone public on the NYSE in over two weeks.
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Block said it would explore legal action against Hindenburg Research after the short-seller accused the payments company of facilitating fraud through its Cash App platform. Block shares fell 15% on Thursday after Hindenburg released its report. The company's stock fell another 2% on Friday, closing at $60.68. More: - Hindenburg claims multiple key lapses in Cash App’s compliance processes facilitated billions in government payment fraud.
- In a statement, Block referred to the Hindenburg report as factually inaccurate and misleading.
- Block said it plans to work with the SEC and explore legal action against Hindenburg Research.
- Block noted it is a highly regulated public company with regular disclosures and is confident in its products, reporting, compliance programs, and controls.
- Block said it had reviewed Hindenburg’s report in the context of its own data and believes the short-seller’s report is designed to deceive and confuse investors.
- Block added it would not be distracted by typical short-seller tactics.
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Shares of Germany's Deutsche Bank fell about 14% at one point during the trading session on Friday following an increase in credit default swaps Thursday night. The Frankfurt-list stock recovered to close 8.6% lower for the day. Deutsche Bank has lost 25% of its value since the beginning of the month. More: - Investors still have concerns about contagion risk following the sudden collapse of U.S.-based Silicon Valley Bank and the rushed rescue of Credit Suisse.
- Shares in major European banks all declined on Friday.
- Deutsche Bank's German rival Commerzbank fell 9%, while Credit Suisse, Societe Generale, and UBS each fell by more than 7%.
- Barclays and BNP Paribas both fell by more than 6%.
- German Chancellor Olaf Scholz dismissed comparisons between Deutsche Bank and Credit Suisse at a summit in Brussels on Friday.
- Chancellor Scholz said Deutsche Bank has fundamentally modernized and reorganized its business and is a very profitable bank, adding there was no reason for concern.
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LG Energy Solution plans to invest $5.6B in a new battery manufacturing complex in Queen Creek, Arizona. The South Korean company joins a list of growing foreign companies lured by new U.S. subsidies. The new complex will serve EV manufacturers in North America. More: - The U.S. seeks to strengthen its local supply chains and reduce its reliance on China as the nation transitions to more green technology.
- LG Energy is the second-largest producer of EV batteries in the world after China’s Contemporary Amperex Technology Co.
- According to LG, the project is the largest investment ever for a stand-alone battery-manufacturing facility in North America.
- The amount is also four times larger than what the company initially committed last year.
- LG Energy said the Arizona plant would meet the eligibility requirements of the EV tax credits program under the Inflation Reduction Act.
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China’s Foreign Ministry criticized the U.S. for targeting TikTok a day after the company’s CEO, Shou Zi Chew, testified before Congress. Ministry spokeswoman Mao Ning said the U.S. had presumed TikTok’s guilt and unreasonably suppressed the app even though the U.S. government has provided no evidence that TikTok threatens the U.S.’s national security. More: - Mao added that the Chinese government has never and would never ask any company or individual to collect or provide data information or intelligence in other countries through means that violate local laws.
- Hours before the hearing, the WSJ reported that China said it would strongly oppose any forced sale of TikTok.
- China’s Commerce Ministry said that a sale or divestiture of TikTok would involve exporting technology and need to be approved by the Chinese government.
- Following the hearing, TikTok spokeswoman Brooke Oberwetter said political grandstanding had dominated the conversation.
- Oberwetter noted that U.S. lawmakers ignored the solutions that TikTok was working on, such as Project Texas, to protect user data and keep content harmful to young people off the site.
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Ford plans to build 500,000 electric trucks a year at its manufacturing plant in Tennessee. The plant called Blue Oval City is expected to begin production in 2025. Last year Ford produced about 1 million trucks across its various plants in North America. More: - Ford CEO Jim Farley said the company expects to gain new customers with its next-generation electric pickup truck.
- About 70% to 80% of Ford’s F-150 Lightning all-electric pickup owners were first-time Ford customers.
- The automaker has increased the production capacity of its F-150 Lightning truck twice to meet demand.
- Ford has been investing in new factories and battery plants to expand its EV offerings.
- The company aims to produce 2 million EVs a year by 2026.
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- Twitter plans to remove legacy verified blue check marks starting April 1.
- Hundreds of thousands of French citizens held protests across the country over President Macron's pension reform. Friday marked the ninth day of protests after the government pushed legislation to raise the retirement age from 62 to 64.
- Disney has reached a tentative deal with Disney World service workers to raise the starting minimum wage from $15 to $18 an hour by the end of the year. The agreement covers about 45,000 service workers at the Disney theme park resort in Orlando, Fl.
- Bankrupt cryptocurrency lender Celsius has agreed to return 72.5% of crypto to custody account holders. Custody account holders have to opt in to receive the settlement payment.
- Starbucks' new CEO Laxman Narasimhan plans to work a half day as a barista at one of Starbucks' locations once a month. Narasimhan said he aims to keep close to the culture and customers, as well as the company's challenges and opportunities.
- According to sources, publishing executives have begun reviewing how much of their content was used to "train" AI tools such as OpenAI's ChatGPT. Publishers are examining how they should be compensated and their legal options.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Vibha Chapparike is a Freelance Writer & Editor at Inside.com. With her post-graduation in Management and Finance completed, Vibha is expanding her knowledge in venture capital, business, startups, and technology. She has had a career in public relations and communications. An ardent reader and writer currently residing in Singapore, you can follow Vibha on Twitter @VChapparike. | |
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