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James P. Gorman, Morgan Stanley’s chief executive, said the bank performed strongly in the first three months of the year, although it lost $911 million due to the collapse of Archego’s Capital Management. Credit…Aaron P. Bernstein/Reuters
Morgan Stanley is the latest Wall Street bank to admit significant losses from the massive implosion last month of Archegos Capital Management, an investment firm led by former hedge fund trader Bill Hwang.
Morgan Stanley, which unlike some of its peers has remained silent about its dealings with Archegos, said in its quarterly earnings report that it lost $911 million on transactions with the fund. Archegos was what is known as a family office, meaning it did not manage outside money, but used all of Wall Street to fund incredibly large and concentrated positions.
When Archegos’ bets failed, the banks were left in a race to get rid of the securities related to his activities. In the subsequent liquidation, some did better than others. Goldman Sachs was able to act quickly and would have been able to get out of a bad situation.
But Wall Street still suffered significant losses. Credit Suisse and Japanese bank Nomura appear to have suffered the most damage, announcing losses of $4.7 billion and about $2 billion, respectively, related to Arcegos’ business activities.
During a conference call with analysts, Morgan Stanley CEO James P. Gorman faced questions about why his bank chose not to disclose the losses like others.
He replied that the size of the loss was not large enough to be significant in the context of the bank’s strong performance in the first three months of the year.
We had a record quarter. Companies had a record quarter. The company where he lives had a record quarter, he said, according to the interview transcript. So it has to be of interest to the whole neighborhood, and I’ll leave that to the lawyers, but we’re very happy with it.
Christopher Waller last year. In a television interview on Friday, he said the Fed is prepared to rein in inflation if it turns out to be stronger than expected…Erin Schaff/The New York Times
Christopher Waller, the new governor of the Federal Reserve Board in Washington, said Friday that he expects the acceleration in inflation – which is expected to pick up in the coming months – to be short-lived.
I think it will be temporary, Waller said on CNBC in his first television interview since President Donald J. Trump. Trump nominated him for the role, and the Senate confirmed him. The temporary rise in inflation we are seeing now will not last.
The inflation data are set against the very low levels of 12 months ago, resulting in a mechanical jump from a year ago, he said. Costs associated with government incentives and supply chain constraints will also have a positive impact.
We know the stimulus measures will have some effect, but once they are spent, they are gone, Waller said. We also know that the bottlenecks that currently exist will disappear.
The consumer price index, a widely followed measure of inflation, rose 2.6 percent in March from a year earlier, the Labor Department said earlier this week. However, the picture is skewed from March 2020, when prices for some products fell as consumers cut back their spending in the face of a pandemic.
Although the CPI and other inflation indicators are expected to rise in the coming months, Fed officials and most economists expect them to stabilize soon. Many officials see key measures as contingent on the central bank achieving an average inflation rate of 2% by the end of the year.
Waller said investors themselves are not betting on excessive and slippery inflation and that even if the data show a larger increase, the Fed is prepared to rein it in and will not let inflation explode.
I don’t think anyone would feel very comfortable ending up at three, three and above and staying there for a while, said Waller, who noted that the biggest concern would be if inflation expectations skyrocketed.
Sonja talks to her colleagues – remotely. linked to the IBM credit.
Millions of employees wonder what the office will look like when they return from a long period of remote work. Employers are trying to prepare them for this.
IBM has developed a realignment program to help its employees adapt when they return to a familiar environment but are faced with unfamiliar new procedures, writes DealBook.
It’s like the first day of school, says Joanna Daly, the company’s vice president of talent development. The children leave a day early to see the class or to learn how things work.
This is necessary, he said, because it is not just a return to the workplace as it used to be or to the ways of working as they used to be.
IBM has created a video about everyday life to show employees what to expect. An 11-minute version of the video, seen by DealBook, begins with Paul returning to one of IBM’s offices in the UK. At the beginning of the day, he goes through a self-assessment checklist to evaluate the potential impact. He enters the office through the designated entrances and gets his masks for the day (and disinfectant wipes if he needs them). The arrows lead him through one-way corridors and stairs. Only one person is allowed in the laundry room at a time.
The cafeteria is closed, so Paul has to bring his own lunch. They may not use whiteboards or markers in the meeting rooms (and may not stay there longer than necessary). When Paul sees other IBMers not adhering to security protocols: No harm in politely reminding them, the narrator assures him.
Along with the video, IBM released an 18-page presentation detailing Sony’s return to the workplace and serving as a friendly, cartoonish guide to the workplace.
We are now looking at how staff’s fear of being together may manifest differently and how we can deal with that, says Daly, through a practical understanding of health and safety and enough flexibility in the environment to allow everyone to get used to coming back.
IBM, which has 346,000 employees, has not set a timetable for its U.S. workers to return to the office. CEO Arvind Krishna said he expects 80% of them to be in hybrid mode when they are.
Mercedes-Benz says the EQ electric can travel up to 480 miles on a single charge, which the company attributes to the car’s new battery technology and aerodynamic shape. Credit…Mercedes/Associated Press
Mercedes-Benz on Thursday unveiled an electric counterpart to its top-of-the-line S-Class sedan. It is the latest in a series of moves by German automakers to defend their dominant position in the car market against Tesla.
The EQS, which will be available in the U.S. starting in August, is the first of four electric vehicles Mercedes will bring to market this year, including two SUVs produced at its Alabama plant and a fuel-efficient sedan. Mercedes hasn’t announced the price of the EQ yet, but it probably won’t be lower than the S-Class, which starts at $94,000 in the U.S.
These cars could be crucial for Daimler, Mercedes’ parent company, in adapting to new technologies.
This is important to us, Daimler CEO Ola Kallenius said in an interview on EQS. In a way, this is the first day of a new era.
Mercedes claims the EQS has a range of 770 km, or about 480 miles. If this figure is confirmed by independent testing, the VCE will knock the Tesla Model S Long Range Plus off the throne as the production electric vehicle that can drive the farthest between charges. According to the Kelley Blue Book, Tesla currently tops the list with a range of just over 400 miles.
According to Kallenius, the EQS owes its endurance to advances in battery technology and an exceptional aerodynamic design. Some analysts doubt Mercedes can sell enough electric cars to justify the development costs, but Kallenius said: We will capitalize EQS with the word go.
The EQS is the latest attempt by German manufacturers to show that they can apply their engineering and production efficiency know-how to battery-powered vehicles. Vehicles are Germany’s most important export, so the success or failure of car manufacturers will have a significant impact on the country’s prosperity.
Audi, Volkswagen’s luxury brand, on Wednesday unveiled the Q4 E-Tron, an electric SUV. The Q4 shares many parts with the Volkswagen ID.4, an electric SUV that the company began delivering to U.S. customers in March. While none of these cars can compete with internal combustion models, none of them offer as much range as comparable Tesla cars.
In the tradition of the S-Class, the EQS offers luxury features such as software that detects driver fatigue and activates the seat’s built-in massage function.
You get an upgrade from the level of an S-Class into a very, very powerful electric car, Kallenius said. That’s your selling point.
Car buyers in Wuhan in January. China is trying to bring its consumers back to pre-crisis spending levels. linked to credit Gilles Sabriet for The New York Times.
China announced Friday that its economy grew 18.3 percent in the first three months of this year compared to the same period last year. However, this increase is as much a reflection of the severity of the situation a year ago – when Chinese production fell by 6.8% – as it is of the current situation in China.
How global demand for computer screens and video consoles is growing, what China is doing as people work from home, and how a pandemic is getting back on track. That demand has persisted as the stimulus package has made Americans want to spend money on garden furniture, electronics and other products made in Chinese factories.
China’s growth is also based on extensive infrastructure. Cranes dot the city skyline. The construction of highways and railways has created jobs in the short term. The sale of real estate also contributed to the strengthening of economic activity.
Exports and real estate investment can only carry China’s growth to a certain extent. Today, China is trying to bring its consumers back to the pre-pandemic era.
Unlike most developed countries, China does not subsidize its consumers. Instead of handing out checks to stimulate the economy, China last year asked state-owned banks to lend to businesses and offered tax breaks.
Travel restrictions during the New Year holiday have curbed Chinese appetite and slowed the pace of shopping. However, Friday showed that retail sales in March were better than expected, giving hope that consumers are beginning to regain confidence.
К : Ella Coese-Data delayed by at least 15 minutes – Source: FactSet
Global stock prices rose Friday after a string of strong economic reports and corporate earnings.
The S&P 500 rose 0.2%, posting its fourth consecutive week of gains and a new record. The benchmark index rose 1% for the week and nearly 5% for the month on Thursday.
The Stoxx Europe 600 rose 0.9% on Friday and also hit a record high, while Britain’s FTSE 100 rose above 7,000 points for the first time since February 2020. Stock market indexes in Japan, Hong Kong and China closed higher.
China announced Friday that its economy grew by 18.3 percent in the first three months of the year, compared to the same period last year when the country’s stock markets were closed due to the coronavirus pandemic. On Thursday, data showed that US retail sales exceeded expectations in March and rose by nearly 10 percent, and initial applications for state unemployment benefits fell to the lowest level in the pandemic last week.
Banks like Goldman Sachs and JPMorgan Chase reported better-than-expected earnings this week and their executives issued optimistic economic forecasts.
The yield on 10-year Treasury bonds fell to 1.57% on Friday. Fears that government spending will overheat the economy and lead to higher inflation pushed bond yields up to 31 last month. March at 1.74 percent. But those fears appear to have been allayed by central bank officials, who have repeatedly said they expect inflation to rise temporarily.
Earlier this week, data showed that U.S. prices rose 2.6 percent in March from a year earlier, a larger increase than usual, in part because prices for some commodities had fallen in March 2020 due to the pandemic.
Another reason for the drop in yields is the remarkable demand for bonds, according to Dutch bank ING. Recent Treasury bond auctions have seen more bidding than usual, with JPMorgan Chase selling $13 billion worth of bonds Thursday, the largest sale in the bank’s history, according to Bloomberg.
The money has to go somewhere, and not all of it can go into equities, ING analysts wrote in a note to clients.
We were trying to find the most inflammatory way to make them mad, Kaolan Robertson says of the videos he made. linked to Alexander Ingram credit for The New York Times.
To make sure you keep watching, YouTube offers you a video that looks like the one you’ve seen before. But the longer you watch, the more extreme the videos can become.
Kaolan Robertson learned how by creating clever opinion pieces and focusing on confrontation you can get millions of views on YouTube and other services. He also learned how YouTube’s recommendation algorithm often led people to extreme videos.
For more than two years, he helped produce and publish videos for the right-wing site YouTube, including Lauren South’s Cade Metz reports for the New York Times.
Knowing what gets the most attention on YouTube, Robertson and South said they would make public statements to provoke conflict. They attended a women’s march in London, and as South took on the role of TV reporter, she asked each woman the same four-word question: Women’s rights or Islam?
Robertson said they often received a confused, measured or polite response. They asked the question over and over and installed it. For example, Southern said Muslim women would find it difficult to answer the question because their husbands would not allow them to participate in the march. This aroused the ire of the crowd.
You can see in the videos that we’re just trying to understand what’s going on, to gather information, to understand people, Robertson said. But actually we were trying to find the most inflammatory way to piss them off.
Ms. South described the situation differently. We asked this question because we knew it would make people question their own political views and realize how contradictory it is to be a feminist and at the same time support a religion that, frankly, has questionable practices toward women, she said. And, she added, they use video technology that any media company would use.
Attendees of the disastrous Fyre Festival in the Bahamas have won $2 million in a class-action lawsuit that has not yet been approved. linked to credit Jake Strang, via Associated Press.
- The court awarded the visitors of the infamous Fyre Festival about $7,220 each, nearly four years after they were abandoned on a dark beach in search of makeshift shelter. A $500 million settlement reached Tuesday in U.S. Bankruptcy Court for the Southern District of New York between the promoters and 277 ticket holders for the 2017 event has yet to receive final approval, and the amount could end up being lower depending on the outcome of Fyre’s bankruptcy case with other creditors.
- CBS turns to two outsiders to revive the fortunes of a newsroom driven out by rivals ABC and NBC. CBS announced Thursday that Neeraj Hemlani, vice president of publishing at Hearst, and Wendy McMahon, a former ABC executive, will succeed Zirinski. They will become president and co-CEO of CBS News, a division that will be expanded to include local stations owned by the network.
linked to the Daniel Zender credit.
In today’s On Tech newsletter, Shira Ovide talks to Cade Metz about what drives us to argue on Facebook and watch hateful videos on YouTube.
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