Good morning.
Some calm has returned to financial markets at the end of a turbulent week, but investors remain wary. Asian shares have risen as help for struggling banks, such as the $30bn lifeline for First Republic Bank in the US, has eased banking crisis fears.
Large US banks – Bank of America, Goldman Sachs, JP Morgan and others – have joined forces to inject $30bn into First Republic, which has had customers withdraw their money after the collapse of Silicon Valley Bank (SVB) and fears that First Republic could be next.
Despite the rescue, First Republic shares tumbled 17% in extended trading on Thursday after it said it was suspending its dividend.
Cash-strapped banks have borrowed about $300bn from the Federal Reserve in the past week. Nearly half the money – $143bn – went to holding companies for two major banks that failed in recent days, SVB and Signature Bank, triggering widespread alarm in financial markets. The Fed did not identify the banks that received the other half of the funding or say how many of them did so.
What is happening with Credit Suisse? US investors in Credit Suisse have hit the beleaguered Swiss bank with legal action, claiming it overstated its prospects before this week’s share crash. The lender suffered a rapid sell-off, with shares plunging on Wednesday by as much as 30% at one point after comments from Credit Suisse’s largest shareholder, Saudi National Bank. Credit Suisse shares shed earlier gains this morning and fell 4%.
What is the US government saying about the crisis? Before the latest news Yellen assured Congress on Thursday that the US banking system was “sound”. She told the Senate finance committee: “I can reassure the members of the committee that our banking system is sound, and that Americans can feel confident that their deposits will be there when they need them.”
Trump Media executives worried over murky $8m loans, emails reveal
Top executives at Donald Trump’s social media company started to become concerned last spring about $8m they had accepted in two emergency loans from opaque entities when its auditors sought further details about the payments, according to documents, emails and sources familiar with the matter.
The payments came at a critical time for Trump Media – which runs the Truth Social platform – because it was running out of cash after its planned merger with a blank check company known as DWAC, which would have unlocked $1.3bn in capital, stalled pending an SEC investigation.
But the financing – which came in the form of a $2m loan from an entity called Paxum Bank registered in Dominica in December 2021 and a $6m loan from an entity called ES Family Trust in February 2022 – had been arranged in a hurry and Trump Media knew next to nothing about the emergency lenders.
The executives had good reason to be concerned: a subsequent examination revealed that the trustee of ES Family Trust was simultaneously a director of Paxum Bank, and one of the part-owners of the bank would turn out to be the relation of an ally of the Russian president, Vladimir Putin.
Who knew about where the money came from? According to documents and emails reviewed by the Guardian and interviews with several people familiar with the payments, the knowledge about the $8m being potentially problematic stretched across a number of top executives at Trump Media.
Xi Jinping to visit Russia in show of support for Vladimir Putin
China’s president is to visit Russia next week in an apparent show of support for Vladimir Putin, the Chinese foreign ministry has said.
The Kremlin also announced the visit, scheduled for 20-22 March, saying it would take place “at the invitation of Vladimir Putin”.
It said Xi Jinping and Putin would discuss issues of further development of comprehensive partnership and strategic interaction between their countries, and exchange views “in the context of deepening Russian-Chinese cooperation in the international arena”.
The leaders would also sign “important” bilateral documents.
The visit will be Xi’s first foreign trip since securing a third term as president on 10 March. It will also be the first time he has visited Putin, the man he has described as his “best friend”, since Russia invaded Ukraine last year.
How did the Ukraine invasion affect the relationship? China and Russia’s “no limits” friendship has been tested by Russia’s war in Ukraine. The invasion seemed to take China by surprise and since then Xi has tried to play the role of mediator while supporting Putin in international forums. China has blocked G20 statements condemning the war and abstained from UN votes on the same matter.
In other news …
TikTok is once again fending off claims its Chinese parent company, ByteDance, would share user data from its popular video-sharing app with the Chinese government, or push propaganda and misinformation on its behalf. The US says the extremely popular video-sharing app ‘screams’ of national security concerns and is considering a countrywide ban.
Israeli forces have killed four Palestinians, including a teenager, in the occupied West Bank in the latest deadly raid on Jenin, which Israel said targeted armed suspects. Dozens of heavily armed masked men fired into the air as they walked through the streets during the funerals of the four dead.
Drought-busting rainfall from California’s 11th atmospheric river has brought the end of water restrictions for nearly 7 million people, which imposed limits on some activities as the state grappled with severe shortages. But the state is still picking up the pieces from the most recent brutal storm.
A cultural photography project called Paddy Irishman is now challenging the stereotypes with an exhibition of 50 Paddies of various ages, backgrounds, ethnicities and sexualities. The installation opened at Pershing Square outside Grand Central Station, New York, this week in the run-up to the city’s St Patrick’s Day parade.
Stat of the day: Florida beaches brace for 5,000-mile blob of seaweed to deposit rotting goop
It’s brown, it weighs millions of tons, it stretches over 5,000 miles and it is heading for Florida’s beaches. An enormous clump of seaweed circulating the Gulf of Mexico and Atlantic Ocean is set to coat beaches in a spongy goop, bringing with it a pungent odor similar to rotting eggs. The huge mass of sargassum is the latest in a series of massive blooms scientists have noticed in the Atlantic since 2011, but it could be the largest yet. It is pushing west through the Caribbean, and beaches in Cancún, Mexico, and Key West, Florida, have already seen large mats wash ashore. The brown morass has doubled in size every month from November to January, forming a belt wider than the continental US. It is expected to hit beaches elsewhere in Florida and along the Gulf of Mexico this summer.
Don’t miss this: Low-income Americans face a ‘hunger cliff’ as Snap benefits are cut
Gina Melton is facing a dilemma. Like millions of other Americans, Melton and her family relied on food assistance benefits boosted by Congress to help them through the pandemic. Now that extra cash is gone. The reduction has hit them hard. Three of her family members are disabled and one of her daughters works to take care of them through an agency. They had already relied on credit cards to pay for medical equipment that wasn’t covered by the federal health insurance schemes Medicare or Medicaid, but have had to stop paying a couple of them in order to afford food. “When you have to choose between feeding your family and paying a credit card bill, you have to choose food,” said Melton, 62.
Climate check: Global fresh water demand will outstrip supply by 40% by 2030, say experts
The world is facing an imminent water crisis, with demand expected to outstrip the supply of fresh water by 40% by the end of this decade, experts have said on the eve of a crucial UN water summit. Governments must urgently stop subsidising the extraction and overuse of water through misdirected agricultural subsidies, and industries from mining to manufacturing must be made to overhaul their wasteful practices, according to a landmark report on the economics of water. Nations must start to manage water as a “global commons”, because most countries are highly dependent on their neighbors for water supplies; and overuse, pollution and the climate crisis threaten water supplies globally, the report’s authors say.
Last Thing: Tokyo citizens hand in record ¥3.99bn of lost cash
The honest citizens of Tokyo handed in a record ¥3.99bn (£24.5m) in lost cash to police last year – an average of more than £67,000 a day. Japan’s national police agency said the amount was up ¥600m from the previous year, and beat the previous high of ¥3.84bn declared at police stations across the capital in 2019. There was relief, too, for at least some of those who had mislaid their money. The police said it had returned almost ¥3bn, while ¥480m was given to those who had discovered the cash and, rather than pocketing it, decided to do the honourable thing. The large quantity of misplaced money is a symptom of Japan’s enduring attachment to hard cash and a cultural resistance to paying on the never never. Police attributed the rise in finds in 2022 to signs that the coronavirus pandemic was coming to an end.
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