Quiz: Do you know everything about the US banking crisis? – 03/17/2023 – Market
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a day of calm
After a Wednesday in which the banking crisis escalated and crossed the Atlantic Ocean to reach Europe, this Thursday (16) two announcements of financial support had a calming effect on the markets – for now.
In EuropeCredit Suisse shares closed higher by 19%recovering much of the 25% drop the day before, when investors were very worried about the bank’s financial health and the contamination effect of the crisis (we explain here).
- The relief came after Switzerland’s central bank granted Credit a loan of up to 50 billion of Swiss francs (US$ 53.7 billion, R$ 284.4 billion), dispelling fears about the Swiss bank’s lack of liquidity.
In the USAthe respite came after a consortium of 11 American banks announced financial support of US$ 30 billion to First Republic Bank.
- The California bank was seen by the market as the most likely to fail after the failure of SVB and Signature, and its shares have been on a roller coaster in recent days.
- The announcement also highlights a different strategy by US banks in relation to the 2008 crisis. This time, the idea is not to repeat the purchase of an institution in crisis, which ended up generating regulatory and operational problems at the time.
Yes but…Both analysts in Brazil and abroad believe that these aids are temporary and do not end investors’ distrust of the financial system.
in the bagsthe Ibovespa closed at a high of 0.73%at 103,433 points, while the dollar retreated 1.05%, at BRL 5.23. Outside, the main indices closed in advance between 1% and 2%.
Opinion: Crowdfunding of billions to save banks says little about the future of the crisis, says Vinicius Torres Freire.
Biggest threat to TikTok in the US since Trump
The US government has escalated the level of the clash with TikTok and is now threatening to ban the app from the country if the Chinese people at Byte Dance do not sell their stake in the platform, reported the Wall Street Journal.
Understand: American President Joe Biden, who had been adopting a more measured tone in the negotiations compared to former president Donald Trump, now repeats his predecessor with the threat of suspending the app.
- In 2020, Trump lost a series of disputes in American courts and was forced to withdraw from the measure.
- The fear of the authorities is the same: that TikTok will be forced to hand over data from American consumers if there is an order from the Chinese government, as required by the local national security law.
TikTok responded. The app’s CEO, Shou Zi Chew, told the WSJ that a forced sale “will not address security concerns” in Washington.
- He cites that the operation will not protect the country any more than the plan for the billionaire app that involves paying the American Oracle to store the data in the national territory.
It’s not just the short video app. As columnist Nelson de Sá writes, TikTok is no longer the leader in the App Store and Google Play.
- Who stands out now is Temu, Shein’s rival who wants to surpass her in sales in the US later this year. Following still appear CapCut, a video editor, and Shein herself. All Chinese.
Take a break: remember 2008?
After 13 years, another major banking crisis hits the US.
With the similarity of the collapse of relevant banks – at the time, Washington Mutual, this time, the SVB –, readers may be wondering if this would be a repetition of the factors that led to the 2008 crisis, which became financial and hit the world whole.
The answer is no. As Vinicius Torres Freire wrote, the SVB broke the old-fashioned way, which may affect the rest of the economy less. We also show here other differences between the current crisis and that of 2008.
Want to better understand what the 2008 crisis was? Here are some streaming tips:
- Internal work (2010): documentary interviews market agents and helps to understand how regulatory failures allowed leverage in “rotten” credits. 2010 Oscar winner. Available on Oi Play and for rent on Apple and Claro.
- The Big Short (2015): nominated for best picture at the Oscars in 2016, he tries to explain, with dynamic editing, what inflated and how the US housing bubble burst. Available on Prime Video.
- ‘Too Big To Crack’: the 2011 feature tells the negotiation involving the bankruptcy of the Lehman Brothers bank, which was considered “too big to fail” (too big to fail). Available on HBO Max streaming.
See here a list of books that explain the 2008 crisis.