The Second-Largest Bank Failure In U.S. History
Happy Monday! According to a new report from the Recording Industry Association of America, vinyl albums outsold CDs in the United States last year for the first time since 1987.
Coincidentally, the Chicago Bears are shaping up to be worth paying attention to this season … for the first time since … about 1987.
Quick Hits: Today’s Top Stories
- The heads of the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation issued a joint statement on Sunday making clear that depositors at Silicon Valley Bank will have access to all of their money this morning after the FDIC assumed control of SVB on Friday amid a bank run that caused the institution to fail. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” the statement read.
- The Bureau of Labor statistics reported Friday that U.S. employers added 311,000 jobs in February—down from 504,000 in January, but still exceeding economists’ expectations. The unemployment rate ticked up slightly from 3.4 percent to 3.6 percent as more people sought out work—the labor force participation rate shifted up from 62.4 percent in January to 62.5 percent. Average hourly earnings—a measure the Federal Reserve is watching closely in its fight against inflation—rose 0.2 percent month-over-month in February, and 4.6 percent year-over-year. Those figures were 0.3 and 4.4 percent in January, respectively.
- Following secret talks mediated by China, Iran and Saudi Arabia announced Friday they are resuming diplomatic relations, and expect embassies and diplomatic staff to be re-established in the coming months. The two Middle Eastern countries have had no official relations since 2016, when Saudi Arabia broke off ties after protesters attacked and burned the Saudi embassy in Tehran.
- By a 2,952-0 vote, the National People’s Congress on Friday officially confirmed Xi Jinping to serve a third five-year term as China’s president—only possible because he abolished the country’s two-term limit for the presidency in 2018. The presidential confirmation is largely ceremonial as Xi’s political power comes from serving as head of the Chinese Communist Party and military, positions he secured at the party congress in October.
- North Korea announced Monday that, one day earlier, it tested two submarine-launched cruise missiles capable of threatening U.S. bases in Japan and South Korea. The launch comes as the U.S. and South Korea plan to hold large-scale military field exercises today.
- The House voted 419-0 on Friday to pass a bill requiring the Office of the Director of National Intelligence to declassify all information related to COVID-19’s origins and send an unclassified report to Congress within 90 days. The Senate had already approved the bill by unanimous consent, and the overwhelming support for the legislation signals that, if President Joe Biden vetoes the bill, he will likely be overridden.
- Michael Cohen, Donald Trump’s former personal lawyer and fixer, is set to testify before a Manhattan grand jury this week in a case concerning hush money Trump paid to a porn star before the 2016 election. The Manhattan District Attorney’s Office invited Trump to testify before the grand jury last week, signaling the case may be moving toward an indictment.
- Two boats suspected of smuggling migrants capsized while approaching the San Diego coast on Sunday, killing at least 8 people. Lifeguards, the Coast Guard, and U.S. Border and Customs Protection agents were still searching for an estimated 7 additional individuals as of Sunday night.
- The 95th annual Academy Awards were held last night, with Everything Everywhere All at Once leading the way with seven Oscar victories, including best picture, best director, best actress in a leading role, best actress in a supporting role, and best actor in a supporting role. Brendan Fraser won best actor in a leading role for his work in The Whale.
RIP to SVB
No one is likely feeling the Daylight Savings hangover this morning more than the folks at the Federal Deposit Insurance Corporation (FDIC), who—alongside Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell—spent the weekend scrambling to keep the second-largest bank failure in United States history from precipitating a broader economic meltdown. We’ll officially find out if their efforts were successful when the markets open in a few hours, but early signs indicate the fallout will likely remain relatively contained.
The now-defunct financial institution in question is Silicon Valley Bank, dreamed up over a poker game and founded in 1983 to cater to the blossoming tech industry in, you guessed it, Silicon Valley. Startups flush with investor cash needed a place to park it—and bankers who understood the ins and outs of the burgeoning sector. SVB provided both.