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Billionaire Bill Ackman on US Banking Crisis: 'I Fear We Are Heading for a Train Wreck' – Economics Bitcoin News

Billionaire Bill Ackman on US Banking Crisis: ‘I Fear We Are Heading for a Train Wreck’ – Economics Bitcoin News

Billionaire Bill Ackman has warned that the U.S. economy is “heading for a train wreck” if the government allows the current banking crisis to continue. “Trust and confidence are earned over many years, but can be wiped out in a few days,” he said. “Hopefully, our regulators will get this right.”

Bill Ackman’s Warning

Billionaire Bill Ackman, CEO and portfolio manager of Pershing Square Capital Management, has warned of an incoming train wreck. Pershing Square is a hedge fund management company with approximately $18.5 billion in assets under management. Ackman’s net worth is about $3.4 billion.

Commenting on the current banking crisis following the failures of major banks, including Silicon Valley Bank and Signature Bank, Ackman tweeted Wednesday:

Consider recent events impact on the long-term cost of equity capital for non-systemically important banks where you can wake up one day as a shareholder or bondholder and your investment instantly goes to zero.

Systemically important banks (SIBs) are banks that are considered to be so large or complex that their failure could have a significant impact on the financial system and the wider economy. On the Financial Stability Board’s (FSB) 2022 list, there are 30 systemically important banks, including JPMorgan Chase, Bank of America, Citigroup, HSBC, and the troubled Credit Suisse.

“When combined with the higher cost of debt and deposits due to rising rates, consider what the impact will be on lending rates and our economy,” Ackman continued, warning:

The longer this banking crisis is allowed to continue, the greater the damage to smaller banks and their ability to access low-cost capital. Trust and confidence are earned over many years, but can be wiped out in a few days. I fear we are heading for a train wreck. Hopefully, our regulators will get this right.

The billionaire believes the government should guarantee all bank deposits. On March 22, he tweeted explaining that Treasury Secretary Janet Yellen’s “reassuring comments” the previous day “led the market and depositors to believe that all deposits were now implicitly guaranteed.” He also referenced “a leak” suggesting that Yellen, the Treasury Department, and the Federal Deposit Insurance Corporation (FDIC) “were looking for a way to guarantee all deposits reassured the banking sector and depositors.”

However, Yellen then “walked back yesterday’s implicit support for small banks and depositors, while making it explicit that systemwide deposit guarantees were not being considered,” Ackman’s tweet adds.

“We have gone from implicit support for depositors to Secretary Yellen’s explicit statement today that no guarantee is being considered,” he further opined, noting that the Federal Reserve has raised the federal funds rate to 4.75%-5.00%. “5% is a threshold that makes bank deposits that much less attractive. I would be surprised if deposit outflows don’t accelerate effective immediately,” Ackman cautioned, elaborating:

A temporary systemwide deposit guarantee is needed to stop the bleeding. The longer the uncertainty continues, the more permanent the damage is to the smaller banks, and the more difficult it will be to bring their customers back.

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Do you agree with Bill Ackman? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Subscribe to read | Financial Times

What is included in my trial?

During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.

Standard Digital includes access to a wealth of global news, analysis and expert opinion. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. For a full comparison of Standard and Premium Digital, click here.

Change the plan you will roll onto at any time during your trial by visiting the “Settings & Account” section.

What happens at the end of my trial?

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For cost savings, you can change your plan at any time online in the “Settings & Account” section. If you’d like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial.

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Robert Kiyosaki Says Fed Rate Hikes Will Crash Stocks, Bonds, Real Estate, and US Dollar – Economics Bitcoin News

Robert Kiyosaki Says Fed Rate Hikes Will Crash Stocks, Bonds, Real Estate, and US Dollar – Economics Bitcoin News

The famous author of the best-selling book Rich Dad Poor Dad, Robert Kiyosaki, has warned that the Federal Reserve’s continued rate hikes will crash stocks, bonds, real estate, as well as the U.S. dollar. He expects the next crash to be the “$1 quadrillion derivatives market.”

Robert Kiyosaki on Interest Rate Hikes, Market Crashes

The author of Rich Dad Poor Dad, Robert Kiyosaki, reiterated his warnings of market crashes and the danger of the Federal Reserve raising interest rates this week. Rich Dad Poor Dad is a 1997 book co-authored by Kiyosaki and Sharon Lechter. It has been on the New York Times Best Seller List for over six years. More than 32 million copies of the book have been sold in over 51 languages across more than 109 countries.

Kiyosaki tweeted Thursday:

Raising interest rates will crash stocks, bonds, real estate, & $ U.S. dollar. Next crash: $1 quadrillion derivatives market. $1 quadrillion is $1 thousand trillion.

The Federal Reserve raised interest rates by 25 basis points (bps) on Wednesday. While a number of people expect the Fed to start cutting rates soon, Fed Chair Jerome Powell said that rate cuts are not in the Fed’s base case.

This was not the first time Kiyosaki has warned about stocks, bonds, real estate, and the U.S. dollar crashing. Last week, the famous author discussed a “crash landing ahead” as bank bailouts began following the collapse of major banks, including Silicon Valley Bank and Signature Bank. He also predicted the end of the U.S. dollar, calling the USD “fake money.”

The renowned author also recently predicted that the world economy is on the verge of collapse, expecting bank runs, frozen savings, and bail-ins. In February, he said that everything will crash. Earlier this year, he said we are in a global recession, warning of soaring bankruptcies, unemployment, and homelessness.

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What do you think about Rich Dad Poor Dad author Robert Kiyosaki’s crash warnings? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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SEC targets Coinbase, Do Kwon arrested and FTX sells $95M in Mysten Labs: Hodler’s Digest, March 19-25

SEC targets Coinbase, Do Kwon arrested and FTX sells $95M in Mysten Labs: Hodler’s Digest, March 19-25

Top Stories This Week

Coinbase could face SEC enforcement action for ‘potential violations of securities law’

Crypto exchange Coinbase received a Wells notice from the United States Securities and Exchange Commission (SEC) suggesting an upcoming enforcement action. According to Coinbase, the “legal threat” could potentially target its staking program, listed digital assets, wallet or Coinbase Prime services. The exchange’s chief legal officer, Paul Grewal, said the warning “comes after Coinbase provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to.” Coinbase CEO Brian Armstrong renewed calls for crypto users to “elect pro-crypto candidates” after the development.

FTX debtors agree to $95M sale of stake in Mysten Labs

As bankruptcy proceedings for FTX move forward, debtors of the defunct crypto exchange have approved an agreement seeking to sell $95 million worth of its preferred stock in Mysten Labs, the company behind the Sui blockchain. Court approval is still pending, as is the potential for other bids on the stocks. In a related headline, FTX is seeking to recover $460 million of allegedly misappropriated customer funds from venture capital firm Modulo Capital, which received a sizeable investment from Alameda Research last year. The investment was reportedly directed by Sam Bankman-Fried, who faces multiple counts in federal court related to alleged fraud during his time as CEO.

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Do Kwon faces fraud charges from US prosecutors hours after arrest

Just hours after being arrested in Montenegro, Terraform Labs CEO Do Kwon was charged with eight separate counts by United States prosecutors in New York, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation. According to reports, Kwon is also facing criminal charges in Montenegro for allegedly forging travel documents. Prosecutors in South Korea issued an arrest warrant for Kwon in September last year, followed by a red notice listing from Interpol weeks later. The charges laid against him are in relation to his alleged role in the collapse of the $40 billion Terra Luna Classic token and TerraClassicUSD stablecoin in May 2022.

Mastercard to settle transactions for stablecoin wallet in APAC

Mastercard is launching a stablecoin digital wallet integration to allow retail customers in the Asia-Pacific region to spend U.S. dollar-pegged stablecoins anywhere Mastercard is accepted. The international payment company plans to convert the USDC stablecoin into fiat and settle on its network by partnering with Australian stablecoin platform Stables. The service will be initially available for users based in Australia before expanding to Europe, the United States, the United Kingdom and most of the Asia-Pacific.

Celsius custody account holders can receive 72.5% of their crypto, says bankruptcy judge

The judge overseeing the bankruptcy case for crypto lending firm Celsius Network has approved a settlement plan that allows custody account holders to get back 72.5% of their crypto assets. Holders will have 30 days to review the terms. If they opt in, the assets will be returned in two distributions — 36.25% up front and 36.25% upon plan resolution (or at end of year). The defunct platform announced in February that NovaWulf Digital Management would act as a sponsor for its restructuring plan, claiming that more than 85% of Celsius customers would recover roughly 70% of their crypto..

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $27,157, Ether (ETH) at $1,734 and XRP at $0.41. The total market cap is at $1.15 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Mask Network (MASK) at 24.22%, Flare (FLR) at 22.23% and XRP (XRP) at 11.89%.

The top three altcoin losers of the week are Arbitrum (ARB) at -89.76%, Immutable (IMX) at -25.82% and Toncoin (TON) at -15.12%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

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Most Memorable Quotations

“What is happening in these months is just demonstrating that the Bitcoiners and Bitcoin maxis were right all along.”

Paolo Ardoino, chief technology officer of Tether

“It’s not crypto versus Goldman Sachs or crypto versus institutions. It’s a race to who can do crypto better.”

Oliver Linch, CEO of Bittrex

“Stablecoins will play a pivotal role in the new financial system and will be core to bridging the worlds of traditional and decentralized finance.”

Daniel Li, chief operating officer of Stables

“What the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans.”

Ron DeSantis, governor of the U.S. state of Florida

“Bitcoin was designed in reaction to Lehman Brothers in the 2008 crisis. It was designed because you can’t trust central authorities.”

Pascal Gauthier, CEO of Ledger

“We are in serious risk of seeing an entire strategic technology arena slip away from US leadership.”

Jeremy Allaire, CEO of Circle

Prediction of the Week 

Bitcoin likely to outperform all crypto assets following banking crisis, analyst explains

The banking crisis could be the spark that will kick off the next crypto bull run, in which Bitcoin is likely to outperform all other cryptos, according to Mike McGlone, senior commodity strategist at Bloomberg Intelligence.

According to McGlone, the United States Federal Reserve’s unwillingness to ease monetary policy despite the banking crisis is driving the U.S. economy into a recession. This macro environment will ultimately favor Bitcoin, which is going to outperform all other cryptocurrencies. 

“The more the Bitcoin can sustain above $25,000, then the more the S&P 500 potentially pressures below 4,000, you’re going to have an indication that Bitcoin is going to take off,” McGlone pointed out. “I think Bitcoin will outperform virtually all cryptos, including Ethereum,” he concluded.

FUD of the Week 

US Senator Ted Cruz tries again with new bill to block CBDC

U.S. Senator Ted Cruz has introduced a bill to block the Federal Reserve from launching a “direct-to-consumer” central bank digital currency as it “could be used as a financial surveillance tool by the federal government.” According to Cruz, the federal government has “no authority to unilaterally establish” the digital dollar. A similar bill was introduced by Cruz with other senators on March 30, 2022, seeking to prohibit the Fed from issuing a CBDC directly to individuals. Nearly 12 months later, the bill still hasn’t moved past the introduction phase.

Hindenburg Research reports Block short position, claiming fraud facilitation and inflated metrics

A report following a two-year investigation from Hindenburg Research claims digital payments company Block has “systematically taken advantage” of its users, alleging the firm inflated its user metrics and facilitated fraud. According to the report, Block’s practices allowed users to set up fraudulent accounts, catering to many criminals who used the platform to steal funds. Block labeled the report “factually inaccurate and misleading,” declaring it intends to take legal action against the research firm.

European banks head into another weekend of uncertainty as default risks surge

European banks faced another weekend of renewed fears surrounding their future, as shares of Deutsche Bank plunged on the New York Stock Exchange on March 24, after a down day on Frankfurt’s markets. Shares of the German bank were impacted by an increase in the cost of insuring against its potential default risk, with its five-year credit default swaps climbing during the week and closing at 222 basis points on Friday. Fears about European banks are not limited to Deutsche Bank. European shares of Commerzbank, Société Générale, and UBS also fell in European trading.

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Resident tax expert Elias Ahonen looks at the best and worst countries in the world for crypto taxes. Where do the U.S. and U.K. rank?

Creating ‘organic’ generative art from robotic algorithms: Emily Xie, NFT Creator

When creating generative art, the world just disappears for this Harvard graduate living in New York.

Recent high-profile indictments by the Department of Justice and collaborative agencies suggest that the federal government intends to aggressively go after alleged crypto criminals in the United States and abroad.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Credit Suisse, UBS, Other Banks Facing Russia Sanctions Probe in US, Report – Bitcoin News

Credit Suisse, UBS, Other Banks Facing Russia Sanctions Probe in US, Report – Bitcoin News

Switzerland’s troubled Credit Suisse and its rescuer, USB, are subject to an investigation into whether bankers helped Russian oligarchs evade Western sanctions, according to a media report. Some major U.S. banking institutions are also under scrutiny within the probe initiated by the Justice Department, sources say.

Credit Suisse, US Banks Investigated for Suspected Sanctions Violations Favoring Russia’s Rich

Switzerland-based global investment banks and financial services firms, Credit Suisse and UBS, are under scrutiny by the U.S. Department of Justice (DOJ), Bloomberg revealed, quoting knowledgeable sources who remained anonymous.

According to the report, the department has been trying to establish if financial professionals working for these and other banks have supported sanctioned wealthy Russians in attempts to circumvent restrictions imposed by Western governments.

U.S. authorities have sent out a number of subpoenas to employees of the two Swiss giants as well as some major U.S. banks, two people familiar with the inquiries told the publication. They want to identify the bankers and advisers who worked with such clients over the past several years and find out whether any laws were broken.

The DOJ requested information on the matter before the recent crisis at Credit Suisse erupted. Earlier in March, its shares dropped to a record low amid loss of investor confidence. The bank borrowed $54 billion from the Swiss National Bank and UBS came to its rescue with a state-backed acquisition proposal.

Russia’s invasion of Ukraine led to a massive expansion of sanctions against the government in Moscow and influential people allied with the Kremlin, including oligarchs. Before that, Credit Suisse was well-known for catering to rich Russians, the report notes.

At some point, it managed over $60 billion for them that generated up to $600 million in annual revenue. When it ended its business relations with individual Russian clients in May, 2022, the bank held about $33 billion of their funds, 50% more than UBS.

Tags in this story
Bank, Bankers, Banking Crisis, banks, credit suisse, Crisis, DOJ, evasion, invasion, Investigation, justice department, probe, restrictions, Russia, russian, Sanctions, swiss, Switzerland, U.S., UBS, Ukraine, US, War

Which other banks do you think may be investigated for facilitating sanctions evasion for Russians? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.




Image Credits: Shutterstock, Pixabay, Wiki Commons, Pierre-Olivier / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Euler Finance exploiter returns over 58,000 stolen Ether

Euler Finance exploiter returns over 58,000 stolen Ether

The hacker behind the $196 million exploit on lending protocol Euler Finance has returned the majority of the stolen assets, according to on-chain data. 

In a transaction on March 25, the exploiter returned 51,000 Ether (ETH) worth around $88 million at the time of writing. A second transfer of 7,737 ETH was made on the same day, worth over $13 million. Previously, on March 18, the hacker sent 3,000 ETH to the protocol, worth nearly $5.4 million at the time. The exploiter still controls some of the stolen assets.

On March 13, the hacker carried out multiple transactions stealing nearly $196 million from the protocol in a flash loan attack, dubbed the largest DeFi hack of 2023 so far. Stolen assets include 8.8 million DAI, 849,000 wBTC, 85 million stETH, and 34 million USDC stablecoin.

Funds stolen from Euler Finance. Source: BlockSec.

A few days after the hack, the exploiter sent an on-chain message to Euler calling for an agreement with the protocol. “We want to make this easy on all those affected. No intention of keeping what is not ours. Setting up secure communication. Let us come to an agreement,” they said.

Related: Euler attack causes locked tokens, losses in 11 DeFi protocols, including Balancer

The protocol had previously tried to negotiate with the exploiter, requesting that they return 90% of the funds they stole within 24 hours, and otherwise they would face legal action. No response was received, and 24 hours later Euler offered a $1 bounty reward for any information leading to the capture of the exploiter.

Other transactions have been made by the hacker, including a transfer of 1,000 nETH, approximately $1.65 million at the time, through sanctioned crypto mixer Tornado Cash.

According to blockchain analytics firm PeckShield, around 100 ETH was sent to a wallet address likely owned by one of the victims. An on-chain message sent by the wallet address had earlier pleaded for the attacker to return their “life savings.”