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Ftx Is In Discussions To Raise Up To $1 Billion At An Estimated Valuation Of $32 Billion, In Line With Its Previous Round

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According to sources with knowledge of the discussions, Sam Bankman-Fried’s crypto conglomerate FTX is currently in talks with investors to raise up to $1 billion in new capital, which would keep the company’s valuation at approximately $32 billion. Negotiations are ongoing, and the terms may change, according to the sources who requested anonymity, as the discussions are confidential. After FTX’s last capital raise in January, Coindesk previously reported on an upcoming investment at a flat valuation. Existing investors include Singapore’s Temasek, SoftBank’s Vision Fund 2, and Tiger Global. An FTX spokesperson declined to comment.

FTX has portrayed itself as the market consolidator, swooping in to acquire distressed assets at a discount, while its competitors have been battered by this year’s “crypto winter.” As a private company, FTX has not suffered the stock meltdown of Coinbase, which has lost three-quarters of its value since June 2022. Sources indicated that a portion of the new capital, in addition to the $400 million round from January, would be used to facilitate more deal-making. FTX signed a deal in July that gives it the option to acquire South Korean lender BlockFi, and the company is in talks to acquire South Korean mobile payment service Bithumb. FTX also offered to buy bankrupt crypto brokerage Voyager Digital in August but was turned down for what was called a “low ball bid.” In June, Bloomberg reported that FTX was also interested in purchasing Robinhood, but Bankman-Fried denies any active discussions at this time.

President Joe Biden to nominate Michael Barr as Fed bank regulator in second attempt to fill the post

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President Joe Biden will nominate former Treasury Department official, Michael Barr, to be the Federal Reserve’s top regulator in charge of big banks. Barr is the White House’s frontrunner for the top regulatory job. If appointed, the financial law author perhaps becomes the most powerful U.S. bank regulator: the Fed Vice chair supervision.

Barr helped design the 2010 Dodd-Frank Act during his service as assistant Treasury secretary for financial institutions during the Obama administration. That law became one of the most extensive overhauls of financial regulation in U.S. history and came on the heels of the 2008-2009 financial crisis. Among its many provisions to protect the economy from future calamity, Dodd-Frank produced both the Consumer Financial Protection Bureau (CFPB) and the Fed’s vice chair for supervision. Biden said in a statement Friday morning accompanying the formal White House announcement. “He was instrumental in the passage of Dodd-Frank, to ensure a future financial crisis would not create devastating economic hardship for working families.” “He understands that this job is not a partisan one, but one that plays a critical role in regulating our nation’s financial institutions to ensure Americans are treated fairly and to protect the stability of our economy.”

U.S. Stocks suffer their largest weekly outflow in 11 weeks

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As central bankers’ hawkish messaging fueled fears of a deeper economic downturn, investors withdrew billions of dollars from U.S. equity funds over the past week. According to strategists at BofA Global Research, citing EPFR Global data in their weekly report, U.S. stock funds recorded their largest weekly outflow in 11 weeks from September 7. The exodus was largely from technology stocks, which booked withdrawals of $1.8 billion. The data showed that the materials and financial sectors witnessed outflows of $1.4 million. Meanwhile, global equity funds saw outflows of $14.5 billion, with $5.5 billion withdrawn from exchange-traded funds. Government and treasury bonds gained $6.1 billion in the past three weeks. According to BofA Global strategists led by Michael Hartnett, chief investment strategist, the inflow to stocks between the November 2020 and February 2022 period has already ended, and there have been no net inflows to stocks over the past six months. “Bonds hate inflation, equities hate recession, and risk sentiment is appalling,” wrote the analysts. 

On Thursday, Federal Reserve Chair Powell said the central bank remained strongly committed to fighting inflation and that politics or other distractions wouldn’t deter it. “I can also assure you that we never take into consideration external political considerations,” Powell said. The hawkish stance has been echoed by many senior Fed officials this week. On Friday, Fed Governor Christopher Waller said they might have to raise the benchmark interest rate “well above 4%” if inflation does not moderate or rises further this year. U.S. stocks finished sharply higher on Friday, notching weekly gains after three consecutive weeks of losses. The S&P 500 SPX, +1.53% gained 61.18 points, or 1.5%, to finish at 4,067.36. The Dow Jones Industrial Average DJIA, +1.19%, advanced 377.19 points, or 1.2%, ending at 32,151.71. The Nasdaq Composite COMP, +2.11% rose 250.18, or 2.1%, to 12,112.31.

Goldman Sachs To Lift Vaccination, Covid-19 Requirements In Most Offices Next Month

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In response to new guidance from federal health officials, Goldman Sachs said Tuesday it would lift all Covid-19 requirements in most offices beginning September 6. According to a memo received by CNBC on Tuesday, the bank will no longer require its employees to be vaccinated or wear face coverings when entering its offices. The policy covers most offices, except those in Lima and New York City. The memo states that unvaccinated employees in New York City are still required to obtain a religious or medical exemption to enter the bank’s offices. According to Goldman, the policy reflects updated guidance from the Centers for Disease Control and Prevention, which no longer distinguishes vaccinated people from those who are not. Additionally, the company stated that treatments, testing, and vaccinations had reduced the likelihood of severe illness from Covid-19.

According to the memo, the bank intends to continue its contact tracing efforts but will cease distributing free antigen test kits at its offices by the end of 2022. However, employees who purchase tests may be able to obtain reimbursement through their insurance policy. The latest developments in the pandemic have resulted in companies adapting their protocols. The majority of workers are also working to return in person to their workplaces after more than two years of lockdowns. Goldman’s memo didn’t specifically mention its return to office policy. The bank first asked employees to return to the office in June 2021. There was a brief pause of this policy amid an omicron surge during the winter. The company reported to CNBC in May that 50% and 60% of its employees had returned to work. In the Tuesday memo, Goldman encouraged employees who have not come into the office regularly to speak with their managers to ensure they conform to “current return to office expectations.”

Cryptocurrency Prices Crash Again – Bitcoin Drops Below $22,000

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Cryptocurrencies opened in a sea of red on Friday morning, and little improvement was seen throughout the day. The price of Bitcoin fell below $21,400 again last week, wiping out its gains from better-than-expected inflation data. Bitcoin miners Marathon Digital (MARA), Riot Blockchain (RIOT), and Hut 8 Mining (HUT) were all down more than 12% on the day. Crypto exchange Coinbase (COIN) dropped 11.3% by the closing bell as its SEC investigation heats up. And heavy bitcoin investor MicroStrategy (MSTR) saw its stock drop nearly 13% by the end of Friday. In the wake of July’s softer-than-expected CPI data, bitcoin almost reached $25,000 last week. It fell back to $21,300 by early Friday, its lowest level since the end of July, due to Fed plans for continued rate hikes and discussions regarding crypto risk and regulations found in Wednesday’s minutes.

The world’s largest cryptocurrency dragged the rest of the digital asset markets along with it. By Friday afternoon, Ethereum, which is ranked No. 2 by market capitalization, had lost its gains from last week and was trading around $1,700. Despite this, Ethereum has been holding above its July level due to its anticipated merging to a proof-of-stake consensus by the end of this month.

How Detroit Moved On From Its Legendary Bankruptcy

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Downtown Detroit is experiencing a new wave of development. “Walking around Detroit in 2008 or 2009 is not the same as walking around in 2022,” said Ramy Habib, a local entrepreneur. “It is absolutely magnificent what happened throughout those 15 years.“ The Southeast Michigan Council of Governments reports that only 708 new housing structures were built in Detroit between 2010 and 2019. Many of the new construction projects are the result of philanthropic efforts by large local businesses. Ford Motor Company, for example, is in the process of constructing a 30-acre mixed-use development at Michigan Central Station. As the city fell into bankruptcy, the station sat abandoned for years.

Economists believe Detroit’s decline into insolvency is the result of globalization in the auto industry during the 20th century. During the most recent but controversial count by the United States Census, the city’s population decreased from 1.8 million to 639,000. “With the population leaving, with the infrastructure staying in place, it meant strains on the city. Cumulatively, they started to mount over time,” said Raymond Owens III, a former senior economist at the Federal Reserve Bank of Richmond. The Great Recession of 2007-2008 left scores of homes in foreclosure in the city. Since then, the U.S. Treasury Department has funded the removal of 15,000 blighted structures in the city. “A lot of Black people are leaving the city. So sometimes that identity can change and shift in certain communities,” said Alphonso Carlton Jr, a lifelong Detroit resident. Tax and spending policies have been used by local leaders to promote economic development downtown.

Fed Governor Bowman Sees ‘Similarly Sized’ Rate Hikes Ahead After Three-Quarter Point Moves

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According to Fed Governor Michelle Bowman, the central bank will likely continue raising interest rates until inflation is under control. In its last two policy meetings, the Federal Reserve raised benchmark borrowing rates by 0.75 percentage points, the largest increase since 1994. The moves were intended to reduce inflation at its highest level in more than four decades. In addition to the hikes, the rate-setting Federal Open Market Committee indicated that “ongoing increases … will be appropriate,” a view Bowman said she endorses. “My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” she added in prepared remarks in Colorado for the Kansas Bankers Association.

Bowman’s remarks are the first by a member of the Board of Governors since the FOMC approved the latest rate increase last week. According to multiple regional presidents, rates will continue to rise aggressively until inflation falls from its current rate of 9.1% annually. Based on Friday’s jobs report, which showed a 528,000 increase in jobs in July and a 5.2% rise in wages, both higher than expected, markets are pricing in a 68% chance of a third consecutive move of 0.75 percentage points in September, according to CME Group data. Bowman stated that she would closely monitor inflation data in the coming weeks to determine the precise amount at which rates should be raised. Despite this, she noted that the recent data cast doubt on hopes that inflation has peaked.

JPMorgan Hires Scientist Charles Lim To Help Protect Financial System From Quantum-Supremacy Threat

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According to a memo obtained by CNBC, JPMorgan Chase has hired a Singapore-based quantum-computing expert to be its global head for quantum communications and cryptography. The memo from Marco Pistoia, head of the bank’s global technology applied research group, states that Charles Lim, an assistant professor at the National University of Singapore, will explore next-generation computing technology in secure communications. Pistoia describes Lim as a “recognized world leader” in quantum-powered communication networks.

Hired from IBM in early 2020, Pistoia established a JPMorgan team focused on quantum computing and other nascent technologies. Unlike today’s computers, which store information as either zeros or ones, quantum computing hinges on quantum physics. Instead of binary, qubits can simultaneously be a combination of zero and one, as well as any value in between. He added that dramatically advanced computing would transform drug development, materials science for batteries, and other areas. If advanced computing technology becomes a reality, the encryption techniques that are the foundation of global communications and financial networks could be rendered ineffective almost immediately. That has spurred the study of next-generation quantum-resistant communication networks, Lim’s area of expertise.

Goldman Sachs Is Considering Reinstating Job Cuts At Year-End In Light Of A Dimming Economic Outlook

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In preparation for tougher times, Goldman Sachs has slowed its hiring and is looking to reduce vendor fees. However, according to a person with knowledge of the matter, Goldman has another tool in its arsenal to control expenses: a possible return to year-end job cuts. It has long been a practice of Wall Street firms to weed out those they deem to be underperformers, often at the end of the year when they prepare to award their annual bonuses. Due to the pandemic, this annual exercise was paused as banks hired furiously to take advantage of a boom in deal activity. According to figures disclosed Monday, Goldman’s headcount increased by 15% to 47,000 employees in the past year alone. These workers may have been acquired, but they still represent a significant increase.

Wall Street’s leading investment bank is contemplating a return to its year-end ritual following a sharp decline in revenue related to debt and equity issuance. Employees often make up the single biggest line item regarding expenses at an investment bank. As of June 30, Goldman had set aside $7.78 billion for workers’ compensation and benefits, or half of its overall operating expenses. In a conference call with analysts on Monday, Denis Coleman, the firm’s Chief Financial Officer, stated that the firm would slow its hiring to replace those who leave and would “probably” reinstate performance reviews by the end of the year. That is “something that we suspended during the period of the pandemic for the most part,” he said.

Fed Governor Waller Expects A 0.75 Percentage Point Hike But Is Open To A Larger Increase

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At the central bank’s meeting later this month, Governor Christopher Waller said he is willing to consider what would be the most aggressive interest rate hike in decades. It is expected that Waller will support a 75 basis point hike at the meeting on July 26-27. However, he will be monitoring data and remaining open-minded regarding what the Fed should do to control inflation, which has been running at its fastest pace since 1981. The rate-setting Federal Open Market Committee approved a 75 basis point move in June, the largest one-month increase since 1994.

“I support another 75-basis point increase” at the next FOMC meeting, Waller said in remarks at an event in Victor, Idaho. “However, my base case for July depends on incoming data,” he added. “We have important data releases on retail sales and housing coming in before the July meeting. If that data comes in materially stronger than expected, it would make me lean towards a larger hike at the July meeting to the extent it shows demand is not slowing down fast enough to get inflation down.” Worries are mounting that the U.S. is headed for or already in a recession, but Waller said the strength of the jobs market has him “feeling fairly confident that the U.S. economy did not enter a recession in the first half of 2022 and that the economic expansion will continue.” Even with the Fed tightening, he said he thinks the economy can achieve a “soft landing” that won’t include a recession. U.S. GDP contracted 1.6% in the first quarter, and the Atlanta Fed’s GDPNow tracker indicates a 1.2% decline in Q2, meeting the rule-of-thumb definition of a recession.