On March 15th, CNN Business reported that the Federal Reserve has created a new rescue plan to prevent another SVB-like collapse from occurring. The new plan, titled the Bank Term Lending Program (BTLP), allows financial institutions to borrow cash from the Federal Reserve for up to one year backed by bonds, mortgage-backed securities, and other
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What We’re Reading This Week [March 17, 2023]
On March 17th, the New York Times reported that SVB Financial Group, the parent company of Silicon Valley Bank, filed for bankruptcy in the Southern District of New York. The filing comes shortly after Silicon Valley Bank was seized by the Federal Deposit Insurance Corporation, following a recent run on deposits. SVB’s collapse is the…
What We’re Reading This Week [November 11, 2022]
On November 8th, Fortune reported on the sudden implosion of FTX, the second biggest crypto exchange, and the role of FTX competitor Binance in that implosion. Binance had been an original investor in FTX and, when it divested its interest, it took its distribution in FTT an FTX proprietary crypto token. When adverse reports about…
What We’re Reading This Week [October 21, 2022]
On October 19th, the Wall Street Journal reported that the electric vehicle startup Mullen Automotive Inc., gained court approval to buy an Indiana manufacturing plant and assets from Electric Last Mile Solutions for $92 million. Such deal, which boosted Mullen’s share prices by 64%, includes Electric Last Mile Solutions’ manufacturing plant in Mishawaka, Indiana and…
What We’re Reading This Week [September 30, 2022]
Reuters reports that the markets in the US have faced their third straight quarterly decline, the longest period of decline for the S&P 500 and Nasdaq indices since 2008. This comes amid a period of rising interest rates and persistently high inflation (including double-digit inflation in the Eurozone), contributing to fears that a recession is…
What We’re Reading This Week [July 22, 2022]
Shareholders in the Revlon bankruptcy have asked that an official committee of equityholders, not affiliated with the debtor-retailer’s majority owner Ron Perelman, be appointed in the case. According to The Wall Street Journal, a group of minority shareholders sent a letter to the US Trustee on July 13th requesting the formation of an official…
What We’re Reading This Week [July 11, 2022]
The Wall Street Journal reports that corporate chapter 11 filings are increasing, reflecting market concern over market volatility, interest rate hikes, and a potential economic slowdown. Many expect default rates to increase this year, though perhaps by not as much as one would expect given the current economic headwinds, based on many companies having taken…
What We’re Reading This Week [June 10, 2022]
The Wall Street Journal reports that the U.S. Treasury moved on Tuesday to block U.S. investors from purchasing Russian debt in secondary markets. As a response to the Russian invasion of the Ukraine, Treasury had originally prohibited the purchase of newly issued Russian government and corporate debt but Treasury has now expanded that policy to…
What We’re Reading This Week [May 26, 2022]
Reuters reports that an April 12, 2022, decision by Judge Ernest Robles of the Bankruptcy Court for the Central District of California, “highlights what appears to be a substantial drafting error” in Subchapter V of the Bankruptcy Code. Subchapter V is a relatively new Bankruptcy Code intended solely for small businesses. The drafting error identified…
What We’re Reading This Week [April 15, 2022]
US mortgage rates hit 5% this week for the first time in more than a decade, continuing a rapid ascent since the start of 2022. According to The Wall Street Journal, interest on the average 30-year fixed-rate mortgage climbed from 4.72% a week ago to its highest level since early 2011. Now, bankers and…