President Biden cheered the report in a statement Thursday morning. “For months, doomsayers have been arguing that the U.S. economy is in a recession, and congressional Republicans have been rooting for a downturn,” he said. “But today we got further evidence that our economic recovery is continuing to power forward.”

By one common definition, the U.S. economy entered a recession when it experienced two straight quarters of shrinking G.D.P. at the start of the year. Officially, however, recessions are determined by a group of researchers at the National Bureau of Economic Research, who look at a broader array of indicators, including employment, income and spending.

Most analysts don’t believe the economy meets that more formal definition, and the third-quarter numbers — which slightly exceeded forecasters’ expectations — provided further evidence that a recession had not yet begun.

But the overall G.D.P. figures were skewed by the international trade component, which often exhibits big swings from one period to the next. Economists tend to focus on less volatile components, which have showed the recovery steadily losing momentum as the year has progressed. One closely watched measure suggested that private-sector demand stalled out almost completely in the third quarter.

Mortgage rates passed 7 percent on Thursday, their highest level since 2002.

“Housing is just the single largest trigger to additional spending, and it’s not there anymore; it’s going in reverse,” said Diane Swonk, chief economist at the accounting firm KPMG. “This has been a stunning turnaround in housing, and when things start to go really quickly, you start to wonder, what are the knock-on effects, what are the spillover effects?”

The third quarter was in some sense a mirror image of the first quarter, when G.D.P. shrank but consumer spending was strong. In both cases, the swings were driven by international trade. Imports, which don’t count toward domestic production figures, soared early this year as the strong economic recovery led Americans to buy more goods from overseas. Exports slumped as the rest of the world recovered more slowly from the pandemic.

Both trends have begun to reverse as American consumers have shifted more of their spending toward services and away from imported goods, and as foreign demand for American-made goods has recovered. Supply-chain disruptions have added to the volatility, leading to big swings in the data from quarter to quarter.

Few economists expect the strong trade figures from the third quarter to continue, especially because the strong dollar will make American goods less attractive overseas.

Jim Tankersley contributed reporting.

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Ellington Residential Mortgage REIT Announces Release Date of Third Quarter 2022 Earnings, Conference Call, and Investor Presentation

OLD GREENWICH, Conn.–(BUSINESS WIRE)–Ellington Residential Mortgage REIT (NYSE: EARN) (the “Company”) today announced that it will release financial results for the quarter ended September 30, 2022 after market close on Wednesday, November 9, 2022. The Company will host a conference call to discuss its financial results at 11:00 a.m. Eastern Time on Thursday, November 10, 2022. To participate in the event by telephone, please dial (800) 445-7795 at least 10 minutes prior to the start time and reference the conference code EARNQ322. International callers should dial (785) 424-1789 and reference the same code. The conference call will also be webcast live and can be accessed via the “For Our Shareholders” section of the Company’s website at www.earnreit.com. To listen to the live webcast, please visit www.earnreit.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software.

A dial-in replay of the conference call will be available on Thursday, November 10, 2022, at approximately 2 p.m. Eastern Time through Thursday, November 17, 2022 at approximately 11:59 p.m. Eastern Time. To access this replay, please dial (800) 925-9539. International callers should dial (402) 220-5389. A replay of the conference call will be archived on the Company’s website at www.earnreit.com.

In connection with the release of financial results, the Company will post an investor presentation to accompany the conference call on its website at www.earnreit.com under “For Our Shareholders—Presentations” after market close on Wednesday, November 9, 2022.

About Ellington Residential Mortgage REIT

Ellington Residential Mortgage REIT is a mortgage real estate investment trust that specializes in acquiring, investing in and managing residential mortgage- and real estate-related assets, with a primary focus on residential mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. government agency or a U.S. government-sponsored enterprise. Ellington Residential Mortgage REIT is externally managed and advised by Ellington Residential Mortgage Management LLC, an affiliate of Ellington Management Group, L.L.C.

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Tricon Completes the Sale of its Interest in U.S. Multi-family Portfolio for $315 Million of Proceeds

TORONTO–(BUSINESS WIRE)–Tricon Residential Inc. (“Tricon” or the “Company”) (NYSE: TCN, TSX: TCN), an owner and operator of single-family rental homes and multi-family rental apartments in the United States and Canada, confirmed today the closing of the previously announced sale of its 20% equity interest in a portfolio of 23 Sun Belt apartment buildings to a vertically integrated residential real estate investment and property management company, which will assume all asset and property management responsibilities for the portfolio after a customary transition period.

The sale resulted in gross proceeds of approximately $315 million to Tricon. The Company intends to use the net sale proceeds primarily to repay outstanding debt on its corporate credit facility, enhancing its balance sheet flexibility to pursue future growth in its core single-family rental business. Tricon also intends to use a portion of the proceeds to repurchase common shares under the normal course issuer bid announced on October 13, 2022.

About Tricon Residential Inc.

Tricon Residential Inc. is an owner and operator of a growing portfolio of approximately 34,000 single-family rental homes and multi-family rental apartments in the United States and Canada with a primary focus on the U.S. Sun Belt. Our commitment to enriching the lives of our residents and local communities underpins Tricon’s culture and business philosophy. We strive to continuously improve the resident experience through our technology-enabled operating platform and innovative approach to rental housing. At Tricon Residential, we imagine a world where housing unlocks life’s potential. For more information, visit www.triconresidential.com.

Forward-Looking Information

This press release contains forward-looking statements and information relating to expected future events and the Company’s financial and operating results and projections that involve risks and uncertainties, including statements regarding the Company’s intentions, growth and investment opportunities, and performance goals and expectations. Such forward-looking information is typically indicated by the use of words such as “will”, “may”, “expects” or “intends”. The forward-looking statements and information contained in this press release include, without limitation, statements regarding: the Company’s use of the net transaction proceeds and the expected debt reduction and balance sheet impact of that use.

If unknown risks arise, or if any of the assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from management expectations as projected in such forward-looking statements. Examples of such risks and uncertainties include, but are not limited to, the inability to complete the transaction described herein due to the failure to satisfy its requisite conditions, and other risk factors described in the Company’s continuous disclosure materials from time to time, available on SEDAR at www.sedar.com. Accordingly, although we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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Ukrainians Struggle to Conserve Energy After Strikes Damage Power Stations

Credit…Ivor Prickett for The New York Times
Credit…Ivor Prickett for The New York Times
Credit…Ivor Prickett for The New York Times

DONETSK PROVINCE, Ukraine — After chasing retreating Russian troops across a stretch of rolling hills and forests for a month, Ukrainian troops in the eastern Donbas region have slowed almost to a halt. And in recent days, Russian reinforcements have rushed to the front line, attempting a counterattack to break Ukraine’s momentum.

Moscow is waging war on two fronts, one on the battlefield, where it has sustained steady losses, including in the Donbas region, the main focus of its invading force since April.

On another front, Russia has escalated its attacks with long-range weapons on civilian targets across Ukraine — including drone strikes far off in Kyiv, the capital, that left at least four people dead on Monday.

The military campaign in the east, meanwhile, has become a battle of shelling, positioning and surveillance where Russian and Ukrainian troops square off just a few hundred yards apart.

In a village near the front line on Sunday, a steady volley of mortars rained down on a Ukrainian position as a radio crackled in a small farmhouse, calling for assistance to find where the Russians were firing from.

“Let’s get to work,” one of the Ukrainian soldiers said, picking up a small drone and heading out the door near the border between Donetsk and Luhansk Provinces, which together make up the Donbas region.

He was part of a drone reconnaissance team from the National Guard’s Dnipro 1 battalion that was working close to the front line, sheltering from shelling while sending up drones to hunt for a range of Russian targets, from tanks to the elusive mortar team.

Russian troops had been grinding forward slowly until the Ukrainian Army mounted a successful counteroffensive at the beginning of September, sweeping across a large swath of northeastern Ukraine, recapturing strategic cities in Donetsk and threatening Russia’s hold on Luhansk.

The Russian side is trying to hang on to the important transport hubs of Svatove and Kreminna. If Ukraine can recapture those two towns, it could break Moscow’s grip on much of Luhansk Province.

But Russian troops seem to have regrouped after their headlong flight last month. They have tanks, artillery and mortars and hold positions on high ground across a valley. The men of Dnipro 1 also said there were signs of newly mobilized Russian soldiers on the ground.

Credit…Ivor Prickett for The New York Times

The villages now behind the Ukrainian front line are almost deserted; burned-out tanks and military trucks sit beside the road and in the pine forests.

Svetlana, who was sitting near the road on Sunday afternoon selling mushrooms gathered from the woods behind her house, said she had come back home as soon as Ukrainian troops recaptured her village. She had been jobless and found it hard to survive as a refugee. “For two weeks now, we have been feeling some relief,” she said.

Closer to the front line, fresh craters from mortar fire pocked the road.

The Ukrainian reconnaissance team’s confidence was buoyed by recent successes. Five days earlier, the Russians had attacked with a large force of 50 to 60 men but were repelled, said one of the officers, Filin, who gave only his code name in keeping with military protocol. The next day, they tried again with a smaller force but also were pushed back, said Filin, 32.

Then the Dnipro 1 team carried out an improvised attack, dropping a grenade from a small commercial drone onto a Russian armored vehicle where a group of soldiers was gathered. The next day they surveilled the area and saw one man dead on the ground where the grenade had hit, apparently abandoned by his comrades.

“After that they stopped the attacks,” said another member of the team, who uses the code name Kon. “They don’t like the sound of drones.”

The Russians have resumed their incessant artillery and mortar strikes but have not tried to advance again, the soldiers said.

Some of the Russian soldiers seemed poorly trained and inexperienced, they said. But others were skilled operators: They have jamming devices that interfere with the drones and can maneuver their tanks to avoid Ukrainian attacks — hiding in the forest and moving out to fire before swiftly disappearing, according to the reconnaissance team’s leader, who goes by Android.

Still, after a month on the move, the Ukrainians said they were confident that they would keep advancing.

“For us, every meter of recaptured land, gives us power,” said Duke, the team’s company commander.”

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AG Mortgage Investment Trust, Inc. Provides Update to Shareholders

NEW YORK–(BUSINESS WIRE)–AG Mortgage Investment Trust, Inc. (NYSE: MITT) (the “Company”) announced today an update on its portfolio and liquidity position, including certain preliminary estimated financial information as of and for the quarter ended September 30, 2022.

In light of sustained market volatility and to enhance transparency to shareholders, the Company has elected to provide the following preliminary updates on its business and financial performance:

Book Value Per Common Share. The Company estimates that Book Value per share as of September 30, 2022 was between $10.97 and $11.07, as compared to $11.48 per share as of June 30, 2022. In addition, Adjusted Book Value per share as of September 30, 2022 was estimated to be between $10.63 and $10.73, as compared to $11.15 per share as of June 30, 2022.(1)

Liquidity Position. The Company’s liquidity position remains strong, with total liquidity as of September 30, 2022 estimated to be $79.7 million, consisting of $77.6 million of cash and $2.1 million of unencumbered Agency RMBS.

Investment Portfolio. The Company’s Investment Portfolio as of September 30, 2022 was estimated to be $4.3 billion as compared to $4.1 billion as of June 30, 2022. (2)

Leverage. The Company’s Economic Leverage Ratio is estimated to be 2.0x as of September 30, 2022 compared to 2.7x as of June 30, 2022. (3) Non-recourse and recourse financing as of September 30, 2022 is estimated to be $3.0 billion and $1.0 billion, respectively, as compared to $2.5 billion and $0.9 billion, respectively, as of June 30, 2022.

The Company continues to execute its disciplined financing strategy, focused on reducing warehouse exposure. During the quarter ended September 30, 2022 and through the date of this press release, the Company executed three rated Non-Agency and Agency-Eligible Loan securitizations, representing an aggregate of $1.3 billion of unpaid principal balance (including one securitization that priced in October 2022, representing $0.5 billion unpaid principal balance, which is subject to closing).

Warehouse Capacity. The Company had approximately $1.9 billion in available capacity under its warehouse facilities as of September 30, 2022. Following the completion of the recently priced securitization in October 2022, the Company’s available warehouse capacity will increase to $2.2 billion.

Stock Repurchases. During the third quarter 2022 and through the date of this press release, the Company repurchased 0.5 million shares of its common stock at a cost of $2.7 million.

The Company has not yet completed its quarterly financial close process for the three months ended September 30, 2022. The preliminary financial information set forth above reflects the Company’s estimates with respect to such information, based on information currently available to management, and may vary materially from the Company’s actual financial results as of and for the periods noted above. Further, these estimates are not a comprehensive statement or estimate of the Company’s financial results or financial condition. These estimates should not be viewed as a substitute for financial statements prepared in accordance with U.S. GAAP, and they are not necessarily indicative of the results to be achieved in any future period. Accordingly, a reader should not place undue reliance on these estimates.

These estimates, which are the responsibility of the Company’s management, were prepared by the Company’s management and are based upon a number of assumptions. Additional items that may require adjustments to these estimates may be identified and could result in material changes to these estimates. These estimates are inherently uncertain and the Company undertakes no obligation to update or revise this information.

About AG Mortgage Investment Trust, Inc.

AG Mortgage Investment Trust, Inc. is a residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market. AG Mortgage Investment Trust, Inc. is externally managed and advised by AG REIT Management, LLC, a subsidiary of Angelo, Gordon & Co., L.P., a leading privately-held alternative investment firm focusing on credit and real estate strategies.

Additional information can be found on the Company’s website at www.agmit.com.

About Angelo, Gordon & Co., L.P.

Angelo, Gordon & Co., L.P. (“Angelo Gordon”) is a privately-held alternative investment firm founded in November 1988. The firm currently manages approximately $52 billion with a primary focus on credit and real estate strategies. Angelo Gordon has over 600 employees, including more than 200 investment professionals, and is headquartered in New York, with associated offices elsewhere in the U.S., Europe and Asia. For more information, visit www.angelogordon.com.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond our control, and may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that may cause such a difference, include, without limitation, the Company’s ability to achieve the anticipated benefits of its origination and securitization strategy, the Company’s ability to grow at the pace anticipated or at all, the impact of uncertainty and volatility in the markets on the Company’s business and strategy, the Company’s pipeline, the Company’s liquidity, the Company’s financing strategy, including the ability to execute securitizations (including whether the securitization in October 2022 will close as anticipated or at all), the availability of capacity under the Company’s warehouse facilities which are uncommitted, the ability and timing of any stock repurchases, the Company’s management and resources, the Company’s ability to navigate challenging market conditions and harness MITT’s earnings power, including the ability to enhance shareholder value, and other risks and uncertainties, including those detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and its other reports filed from time to time with the U.S. Securities and Exchange Commission. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. The Company cautions investors not to unduly rely on any forward-looking statements.

The forward-looking statements speak only as of the date of this press release. The Company is under no duty to update any of these forward-looking statements after the date of this press release, nor to conform prior statements to actual results or revised expectations, and the Company does not intend to do so.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures. Management believes that this non-GAAP information, when considered with our GAAP financial statements, provides supplemental information useful for investors to help evaluate our financial performance. Our presentation of non-GAAP financial information may not be comparable to similarly-titled measures of other companies, who may use different calculations. This non-GAAP financial information should not be considered a substitute for, or superior to, the financial measures calculated in accordance with GAAP. Our GAAP financial results and the reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with GAAP should be carefully evaluated.

The below table provides a reconciliation of the Company’s preliminary estimated range of its Book Value to its preliminary estimated range of Adjusted Book Value ($ in thousands, except per share data):

 

 

Low

 

High

Book Value per share(1)

 

$

10.97

 

 

$

11.07

 

Net proceeds less liquidation preference of preferred stock per share

 

 

(0.34

)

 

 

(0.34

)

Adjusted Book Value per share(1)

 

$

10.63

 

 

$

10.73

 

Footnotes

(1) Book Value per share is calculated using stockholders’ equity less net proceeds of our cumulative redeemable preferred stock divided by the total common shares issued and outstanding. Adjusted Book Value per share is calculated using stockholders’ equity less the liquidation preference of our cumulative redeemable preferred stock divided by the total common shares issued and outstanding. Estimated Book Value per share and estimated Adjusted Book Value per share as of September 30, 2022 are based on 22,117,486 common shares outstanding on that date. Adjusted Book Value per share is a Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information.

(2) The Investment Portfolio at period end consists of the net carrying value of our Residential Investments, Agency RMBS, and, where applicable, any long positions in TBAs, including mortgage loans and securities owned through investments in affiliates, exclusive of AG Arc LLC. Our Residential Investments and Agency RMBS are held at fair value.

(3) Economic Leverage Ratio is calculated by dividing total Economic Leverage, including any net TBA position, by our GAAP stockholders’ equity at quarter end. Total Economic Leverage at quarter end includes recourse financing arrangements recorded within “Investments in debt and equity of affiliates” exclusive of any financing utilized through AG Arc LLC, plus the payable on all unsettled buys less the financing on all unsettled sells and any net TBA position (at cost). Total Economic Leverage excludes any non-recourse financing arrangements. Non-recourse financing arrangements include securitized debt, as well as financing on certain Non-QM Loans. Our obligation to repay our non-recourse financing arrangements is limited to the value of the pledged collateral thereunder and does not create a general claim against us as an entity.

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How Credit Suisse Became a Meme Stock

“Credit Suisse is probably going bankrupt.”

It was Saturday, Oct. 1, and Jim Lewis, who frequently posts on Twitter under the moniker Wall Street Silver, made that assertion to his more than 300,000 followers. “Markets are saying it’s insolvent and probably bust. 2008 moment soon?”

Mr. Lewis was among hundreds of people — many of them amateur investors — who had been speculating about the fate of Credit Suisse, the Swiss bank. It was in the middle of a restructuring and had become an easy target after decades of scandals, failed attempts at reform and management upheavals.

There seemed to be no immediate provocation for Mr. Lewis’s weekend tweet other than a memo that Ulrich Körner, the chief executive of Credit Suisse, had sent employees the day before, reassuring them that the bank was in good financial health.

But the tweet, which has been liked more than 11,000 times and retweeted more than 3,000 times, was one of many that helped ignite a firestorm on social media forums like Twitter and Reddit. The rumor that Credit Suisse was in trouble ricocheted around the world, stumping bank executives and forcing them to call shareholders, trading partners and analysts to reassure them that everything was fine before markets reopened on Monday.

prop up the shares of GameStop, the video game retailer, determined to outsmart hedge funds that had bet the company’s shares would fall.

But what started as a spontaneous effort to take down Wall Street has since become an established presence in the market. Millions of amateur investors have embraced trading, including more sophisticated strategies such as shorting. As the Credit Suisse incident shows, their actions highlight a new source of peril for troubled companies.

Founded in Switzerland in 1856 to help finance the expansion of railroads in the tiny European nation, Credit Suisse has two main units — a private wealth management business and an investment bank. However, the bank has often struggled to maintain a pristine reputation.

It has been the repository of funds from businesspeople who are under sanctions, human rights abusers and intelligence officials. The U.S. government has fined it billions of dollars for its role in helping Americans file false tax returns, marketing mortgage-backed securities tied to the 2008 financial crisis and helping customers in Iran, Sudan and elsewhere breach U.S. sanctions.

In the United States, Credit Suisse built its investment banking business through acquisitions, starting with the 1990 purchase of First Boston. But without a core focus, the bank — whose top bosses sit in Switzerland — has often allowed mavericks to pursue new revenue streams and take outsize risks without adequate supervision.

collapsed. Credit Suisse was one of many Wall Street banks that traded with Archegos, the private investment firm of Bill Hwang, a former star money manager. Yet it lost $5.5 billion, far more than its rivals. The bank later admitted that a “fundamental failure of management and controls” had led to the debacle.

surveillance of Credit Suisse executives under his watch. He left the bank in a stable and profitable condition and invested appropriately across its various divisions, his spokesman, Andy Smith, said.

Credit Suisse replaced Mr. Thiam with Thomas Gottstein, a longtime bank executive. When Archegos collapsed, the bank kept Mr. Gottstein on the job, but he started working with a new chairman, António Horta-Osório, who had been appointed a few months earlier to restructure the bank.

resigned after an inquiry into whether he had broken quarantine rules during the pandemic. But he made swift changes in his short tenure. To reduce risk taking, Mr. Horta-Osório said, the bank would close most of its prime brokerage businesses, which involve lending to big trading firms like Archegos. Credit Suisse also lost a big source of revenue as the market for special purpose acquisition companies, or SPACs, cooled.

By July, Credit Suisse had announced its third consecutive quarterly loss. Mr. Gottstein was replaced by Mr. Körner, a veteran of the rival Swiss bank UBS.

Mr. Körner and the chairman, Axel Lehmann, who replaced Mr. Horta-Osório, are expected to unveil a new restructuring plan on Oct. 27 in an effort to convince investors of the bank’s long-term viability and profitability. The stock of Credit Suisse has dipped so much in the past year that its market value — which stood around $12 billion — is comparable to that of a regional U.S. bank, smaller than Fifth Third or Citizens Financial Group.

appeared on Reddit.

Mr. Macleod said he had decided that Credit Suisse was in bad shape after looking at what he deemed the best measure of a bank’s value — the price of its stock relative to its “book value,” or assets minus liabilities. Most Wall Street analysts factor in a broader set of measures.

But “bearing in mind that most followers on Twitter and Reddit are not financial professionals,” he said, “it would have been a wake-up call for them.”

The timing puzzled the bank’s analysts, major investors and risk managers. Credit Suisse had longstanding problems, but no sudden crisis or looming bankruptcy.

Some investors said the Sept. 30 memo sent by Mr. Körner, the bank’s chief executive, reassuring staff that Credit Suisse stood on a “strong capital base and liquidity position” despite recent market gyrations had the opposite effect on stock watchers.

Credit Suisse took the matter seriously. Over the weekend of Oct. 1, bank executives called clients to reassure them that the bank had more than the amount of capital required by regulators. The bigger worry was that talk of a liquidity crisis would become a self-fulfilling prophecy, prompting lenders to pull credit lines and depositors to pull cash, which could drain money from the bank quickly — an extreme and even unlikely scenario given the bank’s strong financial position.

“Banks rely on sentiment,” Mr. Scholtz, the Morningstar analyst, said. “If all depositors want their money back tomorrow, the money isn’t there. It’s the reality of banking. These things can snowball.”

What had snowballed was the volume of trading in Credit Suisse’s stock by small investors, which had roughly doubled from Friday to Monday, according to a gauge of retail activity from Nasdaq Data Link.

Amateur traders who gather on social media can’t trade sophisticated products like credit-default swaps — products that protect against companies’ reneging on their debts. But their speculation drove the price of these swaps past levels reached during the 2008 financial crisis.

Some asset managers said they had discussed the fate of the bank at internal meetings after the meme stock mania that was unleashed in early October. While they saw no immediate risk to Credit Suisse’s solvency, some decided to cut trading with the bank anyway until risks subsided.

In another private message on Twitter, Mr. Lewis declined to speak further about why he had predicted that Credit Suisse would collapse.

“The math and evidence is fairly obvious at this point,” he wrote. “If you disagree, the burden is really on you to support that position.”

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Democrats Spent $2 Trillion to Save the Economy. They Don’t Want to Talk About It.

“We in Georgia found ourselves trying to claw back from a historic pandemic, the likes of which we haven’t seen in our lifetime, which created an economic shutdown,” he said. “And now, seeing the economy open up, we’ve experienced major supply chain issues, which have contributed to rising costs.”

Direct pandemic payments were begun under Mr. Trump and continued under Mr. Biden, with no serious talk of another round after the ones delivered in the rescue plan. Most Democrats had hoped the one-year, $100 billion child credit in the rescue plan would be made permanent in a new piece of legislation.

But the credit expired, largely because Senator Joe Manchin III, Democrat of West Virginia and a key swing vote, opposed its inclusion in what would become the Inflation Reduction Act, citing concerns the additional money would exacerbate inflation.

Senator Michael Bennet, Democrat of Colorado, was one of the Senate’s most vocal cheerleaders for that credit and an architect of the version included in the rescue plan. His campaign has aired Spanish-language radio ads on the credit in his re-election campaign, targeting a group his team says is particularly favorable toward it, but no television ads. In an interview last week outside a Denver coffee shop, Mr. Bennet conceded the expiration of the credit has sapped some of its political punch.

“It certainly came up when it was here, and it certainly came up when it went away,” he said. “But it’s been some months since that was true. I think, obviously, we’d love to have that right now. Families were getting an average of 450 bucks a month. That would have defrayed a lot of inflation that they’re having to deal with.”

Mr. Biden’s advisers say the rescue plan and its components aren’t being deployed on the trail because other issues have overwhelmed them — from Mr. Biden’s long list of economic bills signed into law as well as the Supreme Court decision overturning Roe v. Wade that has galvanized the Democratic base. They acknowledge the political and economic challenge posed by rapid inflation, but say Democratic candidates are doing well to focus on direct responses to it, like the efforts to reduce costs of insulin and other prescription drugs.

Ms. Lake, the Democratic pollster, said talking more about the child credit could help re-energize Democratic voters for the midterms. Mr. Warnock’s speech in Dunwoody — an admittedly small sample — suggested otherwise.

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Energy subsidies merely delay high inflation, ECB’s Villeroy warns

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WASHINGTON, Oct 15 (Reuters) – Europe’s energy subsidies may reduce the current rate of inflation but only at the expense of future higher readings, potentially complicating the task of monetary policy, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Saturday.

Fearing that high energy prices sap household purchasing power, governments are now rolling out copious support and some have already warned that excessive spending could bring fiscal and monetary policy into conflict as one is easing while the other is tightening.

“We should not be under the illusion that price caps reduce underlying inflation,” Villeroy said in Washington on Saturday, addressing a meeting of the G30, a group of private and public financial officials.

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“They may only help to reduce the risk of second round effects,” he added. “Price caps, if temporary, only reduce current measured inflation at the expense of future measured inflation.”

The ECB has been tightening policy quickly this year and Villeroy argued that governments should also play their part by reestablishing fiscal discipline because the fiscal and monetary policies are misaligned.

Instead of broader spending increases which add to already high inflation pressures, governments should focus help on those in the greatest need of help, Villeroy argued.

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Reporting by Balazs Koranyi; editing by Clelia Oziel

Our Standards: The Thomson Reuters Trust Principles.

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Global finance leaders single out China as barrier to faster debt relief

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WASHINGTON, Oct 14 (Reuters) – Western countries this week ratcheted up their criticism of China, the world’s largest bilateral creditor, as the main obstacle to moving ahead with debt restructuring agreements for the growing number of countries unable to service their debts.

U.S. Treasury Secretary Janet Yellen said on Friday that high inflation, tightening monetary policies, currency pressures and capital outflows were increasing debt burdens in many developing countries, and more progress was urgently needed.

She said she discussed those issues during a dinner with African finance ministers and in many other sessions. The Group of Seven rich nations also met African finance ministers, who worry that the focus on the war in Ukraine is draining resources and attention from their pressing concerns.

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“Everyone agrees Russia should stop its war on Ukraine, and that would address the most significant problems that Africa faces,” Yellen told reporters at the International Monetary Fund and World Bank annual meetings in Washington.

But she said a more effective debt restructuring process was also needed, and China had a big role to play.

“Really, the barrier to making greater progress is one important creditor country, namely China,” she said. “So there has been much discussion of what we can do to bring China to the table and to foster a more effective solution.”

As China is the missing piece in the puzzle of a number of debt talks under way in developing markets, the Group of 20 launched in 2020 a Common Framework to bring creditors such as China and India to the negotiation table along with the IMF, Paris Club and private creditors.

Zambia, Chad and Ethiopia have applied to restructure under this new, yet-to-be tested mechanism. Sri Lanka is set to start talks with bilateral creditors including China after a $2.9 billion staff level agreement with the IMF under a similar platform. The Paris Club creditor nations last month reached out to China and India seeking to coordinate closely on Sri Lanka’s debt talks, but are still awaiting a reply.

The world’s poorest countries face $35 billion in debt-service payments to official and private-sector creditors in 2022, with more than 40% of the total due to China, according to the World Bank.

Spanish Finance Minister Nadia Calvino, who chairs the IMF’s steering committee, told Reuters in an interview on Thursday that there was increasing concern about China not participating fully in debt relief efforts, noting that China had not sent officials to participate in person at this week’s IMF and World Bank meetings.

“China is a necessary partner. It’s indispensable that we have them in the room and in the discussions when it comes to debt relief,” Calvino said, adding that many heavily indebted countries were also being hit hard by inflation and climate shocks.

German Finance Minister Christian Lindner also joined the growing criticism of China’s lack of timely participation in debt restructuring for lower-income countries. China has argued it would not take part in some cases unless the IMF and World Bank also took a haircut.

Lindner told reporters he regretted that China had not accepted his invitation to participate in the G7 roundtable with African countries.

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Reporting by Andrea Shalal; Editing by Paul Simao

Our Standards: The Thomson Reuters Trust Principles.

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