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Treasury secretary rules out bailout for Silicon Valley Bank | CNN Politics

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Treasury secretary rules out bailout for Silicon Valley Bank | CNN Politics


Washington
CNN
 — 

Treasury Secretary Janet Yellen on Sunday dominated out a federal bailout for Silicon Valley Financial institution following its spectacular collapse final week.

“Let me be clear that throughout the monetary disaster, there have been buyers and homeowners of systemic giant banks that had been bailed out, and we’re definitely not trying,” Yellen informed CBS Information when requested if there might be a bailout. “And the reforms which were put in place signifies that we’re not going to try this once more.”

Additionally Sunday, Shalanda Younger, the director of the White Home Workplace of Administration and Finances, burdened in an interview with CNN’s Kaitlan Collins on “State of the Union” that the US banking system at giant was “extra resilient” now.

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“It has a greater basis than earlier than the [2008] monetary disaster. That’s largely because of the reforms put in place,” Younger mentioned on “State of the Union.”

Yellen mentioned she’s been listening to from depositors all weekend, a lot of whom are “small companies” and make use of 1000’s of individuals. “I’ve been working all weekend with our banking regulators to design acceptable insurance policies to deal with this example,” the Treasury secretary mentioned, declining to supply additional particulars.

SVB collapsed Friday morning after a shocking 48 hours wherein a financial institution run and a capital disaster led to the second-largest failure of a monetary establishment in US historical past.

The chaos instigated by excessive rates of interest led to an old style financial institution run on Thursday, wherein depositors yanked $42 billion from SVB.

When the FDIC took management of the financial institution Friday, it mentioned it might pay prospects their insured deposits on Monday, which solely covers as much as $250,000. However there’s some huge cash – and affect – at stake.

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SVB offered financing for nearly half of US venture-backed know-how and well being care corporations. On the finish of 2022, the financial institution mentioned it had $151.5 billion in uninsured deposits, $137.6 billion of which was held by US depositors.

Although some huge cash could have come out throughout the financial institution run and prospects might obtain some uninsured funds as the federal government liquidates SVB, they’re nonetheless uncertain if they’ll recuperate all their money.

Whereas comparatively unknown exterior Silicon Valley, SVB was among the many high 20 American industrial banks, with $209 billion in whole property on the finish of final 12 months, in keeping with the FDIC. It’s the biggest lender to fail since Washington Mutual collapsed in 2008.

Regardless of preliminary panic on Wall Avenue over the run on SVB, which prompted its shares to crater, analysts mentioned the financial institution’s collapse is unlikely to set off the form of domino impact that gripped the banking business throughout the monetary disaster.

However the collapse has prompted a bailout debate in Washington as lawmakers assess the fallout.

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Republican Rep. Nancy Mace of South Carolina informed Collins in a separate interview on “State of the Union” that she doesn’t assist a bailout “right now” however cautioned, “It’s nonetheless very early.”

“We can not maintain bailing out non-public corporations, as a result of there’s no penalties to their actions. Individuals, after they make errors or break the legislation, need to be held accountable on this nation,” she mentioned.

Home Speaker Kevin McCarthy informed Fox Information on Sunday he has spoken with Yellen and Federal Reserve Chair Jerome Powell in regards to the collapse of SVB and believes “they do have the instruments to deal with the present state of affairs.”

“They do know the seriousness of this, and they’re working to attempt to come ahead with some announcement earlier than the markets open,” the California Republican mentioned.

One other Californian, Democratic Rep. Ro Khanna, who represents a lot of Silicon Valley, mentioned the Treasury Division must be extra aggressive in ensuring all depositors in SVB can have entry to their cash.

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“The precept must be that every one depositors might be protected and have full entry to their accounts Monday morning,” Khanna informed CBS Information.

Khanna additionally made clear that buyers and shareholders in SVB, which is headquartered in his district, shouldn’t be bailed out.

“I’ve no sympathy for the executives, no sympathy for the individuals who have inventory there. However the depositors are protected,” he mentioned.

Democratic Rep. Josh Gottheimer of New Jersey, a member of the Home Monetary Companies Committee, despatched a letter Sunday to Yellen, Powell, FDIC Chairman Martin Gruenberg and Michael Hsu, the performing head of the Workplace of the Comptroller of the Forex, calling on them to “act swiftly.”

Gottheimer advisable the FDIC prioritize discovering a purchaser for SVB “that has the assets to supply a seamless transition for the financial institution’s depositors and debtors,” in keeping with a replica of the letter obtained by CNN.

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Senate Banking Committee member Kevin Cramer mentioned he hopes the collapse of SVB is “very localized and we are able to tackle it in that method.”

“The issue is we reside in a really emotional time, the place markets are emotional. The reference to social media as being an accelerator, if you’ll, of a few of that emotion, I believe, might be problematic,” the North Dakota Republican informed NBC Information. “However I hope with the weekend got here some calm and definitely some technique as effectively.”

This story has been up to date with extra response.

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Stick-Wielding Man Kills 2 Homeless People in Miami and Injures 2 Others

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Stick-Wielding Man Kills 2 Homeless People in Miami and Injures 2 Others

A man with a stick attacked four homeless people in downtown Miami early Thursday morning, killing two and injuring two others in what the police called a horrible “display of unprovoked violence.”

The man was seen attacking the people with a stick at 6 a.m., the Miami Police Department said in a statement. The police responded soon after calls came in and saw a man who matched the description that had been given. He ran off but was arrested after a brief foot chase, the police said.

Two of the homeless people died at the scene of the attack. The two people who were injured were taken to a nearby trauma center for treatment, the police said. Their conditions were not available.

The authorities did not immediately release the name of the man who was arrested, who is in his 30s. They said that they would disclose his identity and the charges he faces once the charges had been confirmed. The motive for the attack was not immediately clear, the police said.

The suspect does not have an arrest history in Miami, but he has had “minor criminal run-ins with the police” in New York, Manuel A. Morales, the chief of police for the Miami Police Department, said at a news conference on Thursday. The man’s place of residence was not immediately clear.

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“This is a horrible incident,” Chief Morales said.

The Miami-Dade County Homeless Trust, the county’s leading homeless outreach group, said in a statement that it was grieving the “senseless loss of these lives.” and thanked the police for their swift response.

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Rio Tinto and Glencore held talks about combining their businesses

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Rio Tinto and Glencore held talks about combining their businesses

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Rio Tinto and Glencore held talks last year about combining part or all of their businesses, in an indication of how the push by mining companies to secure metals needed for the energy transition has focused executives on large-scale deals.

The London-listed companies engaged in early-stage talks as recently as October, according to people familiar with the matter, but the discussions did not progress to a deal.

A full-blown merger between Rio and Glencore — which have market capitalisations of $103bn and $55bn, respectively — would rank among the largest-ever transactions in the mining industry.

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The talks between the two companies followed BHP’s failed £39bn bid for Anglo American last year, which prompted rivals to review strategic options.

BHP was interested in Anglo’s copper mines, among other assets, because the metal is used in renewable energy projects and electric vehicles.

Glencore and Rio declined to comment. Bloomberg first reported the companies had discussed combining their businesses.

Rio has been looking to boost its exposure to commodities including lithium and copper to offset weakness in the iron ore market as demand from China slows.

Glencore owns stakes in two significant copper mines — Collahuasi in Chile and Antamina in Peru — that would boost its production of the metal by almost 1mn tonnes a year and offer substantial expansion capacity, according to analysts.

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A potential deal with Glencore would be complicated by the Swiss-based company’s heavy exposure to thermal coal, a commodity Rio has abandoned in recent years.

Matthew Haupt, a portfolio manager at Wilson Asset Management, which owns shares in Rio, said the deal “didn’t make a lot of sense” given Rio’s efforts to get out of coal and invest in renewable energy to power its operations.

Glencore, which has a large commodity trading business and mining operations, has been debating the future of its coal business.

The company said in 2023 it would spin out its coal mines into a separate listed business but changed its mind last year and decided to retain them. 

Glyn Lawcock, an analyst with investment bank Barrenjoey, said coal assets could be spun out as a separate company as part of any agreement. He added there was little overlap between the two companies, meaning there were few synergy benefits from a merger and a deal would need to be justified by asset diversification and creating more scale.

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Ray David, a portfolio manager at Blackwattle Investment Partners, which owns Rio’s UK-listed shares, said Rio could fund an acquisition of Glencore by issuing shares in Australia, which would rebalance Rio’s share structure and close the value gap between its Australian and London listings.

Activist investors, including Blackwattle, have urged Rio to move its primary listing to Sydney — where its stock trades at a premium — to simplify share-based deals.

Rio’s Australia-quoted shares fell 1.8 per cent in early trading in Sydney on Friday, before climbing back to be down 0.5 per cent.

Demand for commodities required to decarbonise the global economy — such as copper, lithium and aluminium — has triggered a flurry of dealmaking activity in the mining industry over the past year.

Rio last year announced a $7bn deal to acquire Arcadium Lithium to increases its presence in metals used in batteries for electric vehicles. People close to the company said it was still digesting that transaction. 

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Rio previously rejected a takeover bid by Glencore in 2014.

Lawcock said the reaction from some Rio investors in Australia was one of unease given Glencore’s reputation for smart dealmaking.

“Shareholders have said I don’t want any of my companies sitting across the table from Glencore,” he said.

Blackwattle’s David said the fact talks had ended showed Rio remained cautious in a consolidating market.

“I suspect Glencore wants a high premium,” he said. “It is a positive sign [that talks ceased] as it shows Rio is being disciplined and aware of not destroying shareholder value. It would be easy to panic.”

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ICE estimates it would need $26.9 billion to enforce GOP deportation bill

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ICE estimates it would need .9 billion to enforce GOP deportation bill

Detainees do a virtual visit with their attorneys or asylum officers at the Port Isabel Detention Center hosted by U.S. Immigration and Customs Enforcement Harlingen Enforcement and Removal Operations center on June 10, 2024 in Los Fresnos, Texas.

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The Homeland Security Department is warning lawmakers in Congress that a proposed immigration enforcement bill would cost $26.9 billion to implement in its first year and “would be impossible for [Immigration and Customs Enforcement] to execute within existing resources.”

The Senate is currently weighing amendments on the Laken Riley Act, which would direct federal immigration enforcement to detain and deport anyone in the U.S. without legal status if they have been charged, arrested or convicted of burglary, theft, larceny or shoplifting.

The bill passed the House last week with more Democratic support than the previous time the body voted on it. The bill has been broadly seen as a marker emphasizing Washington’s focus on immigration and border security as President-elect Donald Trump is about to be inaugurated.

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Some Senate Democrats are giving the measure a chance. This week, a bipartisan set of procedural votes opened up the measure to further debate and changes.

But the agency in charge of carrying out the potential new law warns that it may physically not be able to.

New estimates from an internal ICE document obtained and verified by NPR show that the agency would need 110,000 more detention beds and over 10,000 enforcement and removal operations personnel to increase apprehensions, detentions and removals. More than 7,000 additional attorneys and support personnel would also be needed to handle immigration proceedings, according to the estimates.

The document notes that a figure of $3.2 billion “has been shared widely as a cost estimate,” but calls that number incorrect because it “does not represent the full cost of implementation.” The document says the previous estimate — outlined in a three-page memo from ICE sent in response to questions from one of the bill’s House sponsors — was based “on only 60,000 beds.”

Sen. Katie Britt, R-Ala., who introduced the measure in the Senate, did not respond to a request for comment. The measure that passed in the House does not include funding for additional ICE staff or resources. ICE declined to comment on its ability to enforce the bill.

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Senate Democrats and Republicans are working through several proposed amendments to the measure. There is not a timeline yet for a final floor vote.

The bill is named after a Georgia nursing student who was killed last year by a Venezuelan man who was in the U.S. without legal status. Her death became a rallying cry for Republicans, who criticized the Biden administration’s approach to border security. Her assailant, Jose Ibarra, was convicted in November and sentenced to life in prison without parole. Ibarra had previously been charged with shoplifting in New York, leading Republicans to argue that if the law had been in place, Riley may still be alive.

The bill’s critics have said it could lead to innocent people being thrown into detention without due process, and note that research shows that immigrants commit less crimes than those born in the U.S.

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