Tonight: PacWest shares take a dive. Plus: The Fed flirts with the end of rate hikes, and Hindenburg strikes again. Let's get into it. By Allison Morrow |
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| | Last updated May 3 at 7:43 PM ET | |
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Just as Nightcap was about to call it, um, a night, shares of PacWest Bancorp tumbled after Bloomberg reported that the bank is "exploring strategic options," including a sale. From CNN's David Goldman: "Exploring strategic options" is Wall Street lingo for "please help." The last bank to announce it was exploring strategic options was First Republic, which, of course, collapsed early Monday and was scooped up by JPMorgan Chase. PacWest Bank did not immediately respond to CNN's request for comment. Bloomberg, citing anonymous sources, said the bank has been looking to sell itself, but bidders aren't coming out of the woodwork. PacWest is considering splitting up the company or trying to raise capital to support itself, Bloomberg reported. Like many other regional banks, the value of PacWest's loans and bond holdings has crumbled as interest rates have surged. PacWest's stock has plunged 72% this year. The bank appeared to have stabilized in recent weeks since the March collapses of Silicon Valley Bank and Signature Bank. PacWest said last week that customers have stopped withdrawing their money and 73% of the bank's deposits were insured. But when First Republic failed earlier this week, investors started looking for the next shoe to drop. Other regional banks also tumbled in after-hours trading, including Western Alliance, which fell by nearly 30%. |
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All right, folks, that's a wrap on Fed Day. How's everyone doing? ICYMI: As expected, the central bank raised interest rates by a quarter of a percentage point, marking its tenth straight rate hike since it began its campaign to fight inflation over a year ago. The quarter-point increase brings the benchmark federal funds rate to between 5% and 5.25% — its highest level in more than 15 years. The big takeaway lies in what the Fed didn't say. Normally, its post-meeting statement includes a notation that "some additional policy firming may be appropriate," which is just code for, more hikes are coming. Today, the Federal Open Market Committee left that line out. "A decision on a pause was not made today," Powell noted at the press conference this afternoon. Instead, the FOMC will weigh various factors in the lead-up to the June meeting. "That's a meaningful change, that we were no longer saying that we anticipate" more rate hikes. After 10 rate hikes in a row, you might think the stock market would have cheered. Instead, Wall Street seemed unsure of what to do with the news. Stocks fluctuated during Powell's speech, and ended the day down, continuing losses from the day before. "The markets and our economy will continue to live in purgatory until inflation is closer to the Fed's target rate of 2%," said Eric Sterner, chief investment officer at Apollon Wealth Management. "I can't envision any sustainable market rally until inflation is tamed." RELATED: Here's what you need to know about the Fed's impact on your mortgage. |
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The tables turned on activist investor Carl Icahn this week as his own company became the target of a powerful short-seller's accusations. Hindenburg Research, the research firm whose reports have a tendency to gut companies it investigates, accused Icahn Enterprises this week of overvaluing its holdings and using a "Ponzi-like" structure to pay dividends. Shares fell 20% after Hindenburg released the report Tuesday. Icahn Enterprises stock continued its decline Wednesday, falling another 20%. |
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In the week-and-a-half since Fox News fired Tucker Carlson, the question no one seemed to be able to answer conclusively was: Why? Today, a report in the New York Times offered a clue in the form of a text message that, among other things, shows Carlson expressing deeply racist and violent ideas that went beyond the usual stream of racism that he regularly broadcast to his 3 million loyal fans. Just to set the scene: Imagine you're a Fox executive and your lawyer comes to you saying this text from your most popular host is potentially about to become public in a court of law, in the most closely watched media trial in a generation. What do you do? A couple of weeks ago, I was watching video of people fighting on the street in Washington. A group of Trump guys surrounded an Antifa kid and started pounding the living sh** out of him. It was three against one, at least. Jumping a guy like that is dishonorable obviously. It's not how white men fight. Yet suddenly I found myself rooting for the mob against the man, hoping they'd hit him harder, kill him. I really wanted them to hurt the kid. I could taste it. Then somewhere deep in my brain, an alarm went off: this isn't good for me. I'm becoming something I don't want to be. The Antifa creep is a human being. Much as I despise what he says and does, much as I'm sure I'd hate him personally if I knew him, I shouldn't gloat over his suffering. I should be bothered by it. I should remember that somewhere somebody probably loves this kid, and would be crushed if he was killed. If I don't care about those things, if I reduce people to their politics, how am I better than he is? The Times says that's why Fox chose to settle with Dominion for $787 million. To be honest, it was probably about a lot more than one text. But this diatribe could not have helped. Fox was clearly worried enough about it that the text remained redacted even when most other incredibly damaging dirty laundry was made public. Fox News declined to comment to CNN on the report. Tucker Carlson did not respond to CNN's request for comment. Obviously, the text is bad. But regular viewers of "Tucker Carlson Tonight" would hardly flinch at it. As my colleague Oliver Darcy notes: Carlson's show was notorious for its anti-immigrant and racist rants. He went to the fringes of the white supremacist corners of the internet and brought ideas such as the "Great Replacement" conspiracy theory, into the mainstream for prime-time consumption. "What's not news is the fact that Tucker Carlson is a white nationalist," ADL chief executive Jonathan Greenblatt tweeted. "What is news is the fact that this somehow is surprising to anyone." |
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Last updated May 3 at 4:00 PM ET | |
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