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Tag Archives: investments
Inflation Reduction Act spurs $500 billion in investments — and much is going to underserved communities, Treasury says – CNBC
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Goldman Sachs announces reduction in asset management investments
Goldman Sachs head of personal finance management Joe Duran provides his 2023 market outlook and discusses the firm’s ‘tough decision’ to cut 3,200 jobs on ‘Varney & Co.
Goldman Sachs Group Inc’s asset management section will make significant cuts to the $59 billion of alternative investments that impacted its earnings.
Alternative assets can include private equity or real estate instead of traditional investments like stocks and bonds.
The firm will divest its positions over the next few years and replace some of those funds on its balance sheet with external capital, according to Julian Salisbury, chief investment officer of asset and wealth management at Goldman Sachs.
“I would expect to see a meaningful decline from the current levels,” Salisbury told Reuters. “It’s not going to zero because we will continue to invest in and alongside funds, as opposed to individual deals on the balance sheet.”
FEDERAL RESERVE INVESTIGATING GOLDMAN SACHS’ CONSUMER BUSINESS
Goldman Sachs Group Inc’s asset management section will make significant cuts to the $59 billion of alternative investments that impacted its earnings. (Reuters Photos)
Goldman Sachs had a poor fourth quarter, when it missed Wall Street profit targets by a substantial margin. The bank is firing more than 3,000 employees in its biggest round of job cuts since the 2008 financial crisis.
The bank’s asset and wealth management posted a 39% drop in net revenue to $13.4 billion in 2022, with its revenue from equity and debt investments declining 93% and 63%, respectively, according to earnings announced last week.
The $59 billion of alternative investments held on the balance sheet dipped from the prior year’s $68 billion, according to the results. The positions included $15 billion in equity investments, $19 billion in loans and $12 billion in debt securities, as well as other investments.
“Obviously, the environment for exiting assets was much slower in the back half of the year, which meant we were able to realize less gains on the portfolio compared to 2021,” Salisbury said.
Salisbury expects to see “a faster decline in the legacy balance sheet investments” if the environment for asset sales improves.
CONCERNS OVER A ‘WHITE COLLAR RECESSION’ GROW AS GOLDMAN SACHS, MORGAN STANLEY, AMAZON AND OTHERS CUT JOBS
The firm will divest its positions over the next few years and replace some of those funds on its balance sheet with external capital. (REUTERS/Andrew Kelly/File Photo / Reuters Photos)
“If we would have a couple of normalized years, you’d see the reduction happening” during that period, he said.
He also said clients are showing interest in private credit because of poor capital markets.
“Private credit is interesting to people because the returns available are attractive,” Salisbury said. “Investors like the idea of owning something a little more defensive but high yielding in the current economic environment.”
Goldman Sachs’ asset management arm closed a fund of more than $15 billion earlier this month to make junior debt investments in private equity-backed businesses. Private credit assets in the industry have more than doubled to more than $1 trillion since 2015, according to data provider Preqin.
Investors are also growing interested in private equity funds and are trying to purchase positions in the secondary market when existing investors sell their stakes, Salisbury said.
The bank is firing more than 3,000 employees in its biggest round of job cuts since the 2008 financial crisis. (Getty Images)
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The U.S. investment-grade primary bond market began the new year with a number of new deals.
Salisbury said the market rally has “more legs” because investors are willing to buy bonds with longer maturities while also looking for higher credit quality due to the uncertain economic environment.
Goldman Sachs economists predict the Federal Reserve will raise interest rates by 25 basis points each in February, March and May before holding steady for the rest of the year, Salisbury said.
Reuters contributed to this report.
Tom Brady, Gisele Bundchen, Robert Kraft ‘will lose ENTIRE investments in FTX’s $32BILLION collapse’
Clobbered by crypto! Tom Brady, Gisele Bundchen, and Patriots owner Robert Kraft ‘are among investors who will lose their ENTIRE investments in FTX’s $32BILLION collapse’
Tom Brady, his ex-wife Gisele Bundchen, and former employer Robert Kraft are being counted among stakeholders who lost their entire investment in FTX’s $32 billion collapse.
Bankruptcy documents filed Monday show that the Tampa Bay Buccaneers quarterback owns more than 1.1 million common shares of FTX trading, while Bundchen has another 680,000 shares. Kraft, the billionaire New England Patriots owner, has 479,000 common shares and 43,545 preferred shares through one of his companies, KPC Venture Capital LLC.
The previous value of their respective investments remains unclear, but the company itself was once valued at $32 billion after founder Sam Bankman-Fried raised $400 million in investments.
Tom Brady (pictured), his ex-wife Gisele Bundchen , and former boss Robert Kraft are being counted among stakeholders who lost their entire investment in FTX’s $32 billion collapse
Bundchen went so far as to appear with Bankman-Fried at the Salt Crypto Bahamas Conference, where they discussed the sustainability of the cryptocurrency industry
Bankrupt companies rarely refund investors’ money because federal laws dictate creditors be repaid first and shareholders last.
‘At the end of the day, we’re not going to be able to recover all of the losses here,’ John J. Ray III, an executive specializing in recovering lost assets from failed companies, announced last month.
Brady’s agent, Don Yee, and a spokesman for Robert Kraft did not immediately respond to DailyMail.com’s request for comment.
FTX was a high-profile cryptocurrency exchange that made major inroads with investors, thanks to celebrity endorsements, including advertisements featuring Brady and Bundchen. The pair also received equity stakes in exchange for endorsing FTX.
Bankruptcy documents from the defunct crypto exchange show that the Tampa Bay Buccaneers quarterback owns more than 1.1 million common shares of FTX trading, while Bundchen has another 680,000 shares
Bundchen went so far as to appear with Bankman-Fried at the Salt Crypto Bahamas Conference, where they discussed the sustainability of the cryptocurrency industry.
Since then, FTX has collapsed, and last month, the US government filed criminal and civil charges against Bankman-Fried, the exchange’s 30-year-old founder of FTX, accusing him of widespread financial fraud.
Brady and Bundchen are also defendants in a class-action lawsuit filed by FTX investors who feel the former power couple duped them into substantial losses. The 45-year-old Brady even deleted old tweets in which he promoted FTX.
Other investors to lose money in FTX include Sequoia Capital, Tiger Global Management, and the Ontario Teachers’ Pension Plan, which previously owned the NHL’s Toronto Maple Leafs, NBA’s Toronto Raptors, MLS’ Toronto FC and CFL’s Toronto Argonauts.
Bankman-Friend faces eight federal charges, including accusations of overseeing massive fraud. He has pleaded not guilty on all counts.
Kraft, the billionaire New England Patriots owner, has 479,000 common shares and 43,545 preferred shares through one of his companies, KPC Venture Capital LLC
Investments could flow back into China as companies avoid U.S. delisting
Chinese e-commerce giant Alibaba was one of the 100 over companies that had faced the risk of delisting in the U.S. in 2024 if their audit information was not made available to PCAOB inspectors.
Budrul Chukrut | Sopa Images | Lightrocket | Getty Images
Investors could regain the confidence to put their money in Chinese tech stocks as these companies avoid delisting from U.S. stock exchanges and the Chinese government pledges policy support, according to one investment manager.
Last week, U.S. accounting watchdog the Public Company Accounting Oversight Board said it gained full access to inspect and investigate Chinese companies for the first time, after China finally granted the U.S. access in August.
More than 100 Chinese tech companies such as Alibaba, Baidu and JD.com had faced the risk of delisting in the U.S. in 2024 if their audit information was not made available to PCAOB inspectors.
Investors often grapple with a lack of transparency into Chinese stocks.
“It will allow institutional investors to come back. Professional investors were very scared about this delisting risk which was why they have stayed on the sidelines,” Brendan Ahern, chief investment officer at U.S.-based investment manager KraneShares, told CNBC’s “Squawk Box Asia” on Wednesday.
As of Sept. 30, there were 262 Chinese companies listed on U.S. exchanges with a total market capitalization of $775 billion, according to the United States-China Economic and Security Review Commission.
“With that risk going away based on the PCAOB announcement, you are going to see investment dollars flow back into these names,” said Ahern.
“These internet giants are really where investors want to invest when it comes to China,” said Ahern.
But he also caveated that it is still “early days, weeks, months to see that capital return back into the space.”
But he also noted policy support will help to boost growth for these companies. Last week, China pledged to raise domestic consumption next year, as the country moves toward boosting growth after exiting its zero-Covid policy.
“2023 is a year where we are going to have a lot of government policy support such as raising domestic consumption,” said Ahern. “About 25% of all retail sales goes through the companies.”
“The Chinese government actually needs these internet companies, which explains why we have seen a backing off on some of the regulatory scrutiny we experienced in 2021,” said Ahern.
Elon Musk says disgraced FTX CEO set his ‘bulls–t meter off’
Elon Musk says he knew disgraced FTX founder and former CEO Sam Bankman-Fried was full of it.
Back in March, Bankman-Fried offered via intermediaries to help Musk buy Twitter, according to texts leaked Friday by Twitter user Internal Tech Emails.
The texts show that Musk’s banker Michael Grimes told Musk that Bankman-Fried was offering “at least $3 billion” to help Musk fund the Twitter deal and wanted to talk about the potential for “social media blockchain integration.”
Musk was skeptical. He asked Grimes, “Does Sam actually have $3B liquid?”
After the texts were leaked, Musk replied on Twitter, “Accurate. He set off my bs detector, which is why I did not think he had $3B.”
At least $1 billion of customer funds — and possibly as much as $2 billion — have gone missing in the shocking implosion of the crypto currency exchange FTX, according to reports.
Musk’s take on Bankman-Fried, known in the industry as “SBF,” comes as FTX imploded late last week with reports that he secretly funneled $10 billion of customer funds into his trading company, Alameda Research
At least $1 billion of customer funds — and possibly as much as $2 billion — have gone missing in the shocking implosion of the crypto currency exchange FTX, according to reports.
‘This is our peak year’ for network investments
Verizon (VZ) doesn’t plan to moderate its network infrastructure investment, even as recession concerns loom.
“I think the last six, seven years, we have planned exactly how we’re going to invest in the network,” Verizon CEO Hans Vestberg told Yahoo Finance Live (video above). “This is our peak year. We’re going to do somewhere around $22 billion in capex, that’s our guidance. And one portion is our business as usual, and then the other is that the new spectrum we bought last year is actually coming to execution right now, and we’re doing that as fast as we can.”
In order to help offset the rise in capital expenditures as Verizon continues to invest heavily in its network infrastructure, the company announced select price increases this year, which vary across subscription plans.
These service fee adjustments arrived as consumers continue to juggle higher prices with inflation remaining near 40-year highs.
Verizon stock fell more than 4% on Friday after the company reported a decline in subscribers. Vestberg noted that the drop in subscribers was expected after the price changes were rolled out and maintained that it should ease over time.
“We took a deliberate decision in the second quarter to do price adjustment in certain consumer segments,” Vestberg said. “I think it was important for us to also do that because our industry has not done price adjustments on wireless ever, so this was the time to do it.”
Verizon’s calculated decision to raise some fees for customers knowing some subscribers might balk at higher prices isn’t unusual in the industry as telecommunication giants spend to compete over latency levels and network reliability.
On Thursday, AT&T Chief Financial Officer Pascal Desroches told Yahoo Finance that the company plans to invest in its network. Desroches also expressed confidence in AT&T’s ability to continue spending on improving network speed and reliability in the event of an economic downturn.
Despite the present risk of a Federal Reserve-induced recession, communication services executives share the expectation that their core product is resilient.
“We all read what’s happening in the macro economy with higher inflation and the interest rates coming up, so it’s a little bit mixed,” Vestberg said. “But clearly, we are in the fundamental product. Everybody needs mobility, everybody needs to be connected.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.
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New Trump super PAC adds investments in five key Senate battlegrounds
CNN
—
Former President Donald Trump is wading deeper into the midterms as several key Senate battlegrounds tighten, with his new super PAC pouring nearly $4 million into several races on Wednesday.
The latest spending spree by MAGA Inc. comes on the heels of contentious debates between Senate candidates in Ohio, Arizona and Georgia that saw Trump-endorsed candidates battle with their Democratic opponents over topics ranging from abortion and guns to the economy and election integrity.
According to AdImpact, the former President’s group has placed another $3.8 million in television ad buys in Ohio, Pennsylvania, Georgia, Nevada and Arizona, all home to Trump-backed Senate candidates.
A person familiar with the matter said Trump’s group may make additional investments before the November 8 election if public and internal polls show different races tightening further over the three remaining weeks until Election Day.
Trump has spent the past several months facing intense pressure from fellow Republicans to boost his financial investments in critical midterm races amid frustrations that he was sitting on a mountain of unused cash that could make a difference in races that are likely to be won on the margins. It wasn’t until his new super PAC released a series of campaign ads earlier this month that GOP allies finally had their wish granted.
All together, Trump’s allies expect his midterm spending to stretch into the tens of millions by Election Day, including the $8.4 million his Save America leadership PAC has previously given to candidates and committees this cycle.
However, that would still be a fraction of what other Republican groups have committed to spending in the 2022 cycle. For contrast, the Senate Leadership Fund, a group linked to Senate Minority Leader Mitch McConnell, is on track to spend more than $196 million in digital and television advertising this cycle, according to data from AdImpact.
Tesla, Ford attract new investments from George Soros’s fund
Billionaire investor George Soros’s investment fund has bought stakes in Tesla Inc. and Ford Motor Co. and added to existing stakes in EV makers Lucid Group Inc. and Nio Inc., according to a filing late Friday.
The fund acquired 29.5 million shares of Ford
F,
+2.21%
in the reporting period ended in June, the filing showed. It snapped up nearly 30,000 Tesla shares
TSLA,
+4.68%
in a new position as well.
New positions for the fund also included bets on Twitter Inc.
TWTR,
+0.73%,
the social-media company in the middle of a dispute with Tesla Chief Executive Elon Musk over their soured deal.
The Soros fund offloaded some of its holdings in Rivian Automotive Inc.
RIVN,
-0.13%,
however, ending the reporting period with slightly less than 18 million shares, down from a previous holding of around 20 million shares.
See also: Rivian loses nearly $2 billion in second quarter as expenses mount
New stakes for the fund also included Las Vegas Sands Corp.
LVS,
+2.60%
and Uber Technologies Inc.
UBER,
+0.71%.
The fund sold all of its shares of Bank of America Corp.
BAC,
+1.09%
and Citigroup Inc.
C,
+0.70%
as well as gaming company Take Two Interactive Inc.
TTWO,
+2.05%,
among others.
Warren Buffett’s Berkshire reports $44B loss as value of investments falls
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Warren Buffett’s Berkshire Hathaway reported a $43.76 billion loss in the second quarter as the value of the company’s investments plummeted, in what was a tumultuous quarter for the markets.
Berkshire said Saturday that a largely unrealized $53 billion decline in the value of its investments forced it to report a loss of nearly $44 billion, or $29,754 per Class A share. That is down from $28.1 billion, or $18,488 per Class A share, a year ago.
Buffett has long said he believes Berkshire’s operating earnings are a better measure of the company’s performance because they exclude investment gains and losses, which can vary widely quarter to quarter.
WARREN BUFFETT’S BERKSHIRE HATHAWAY TAKES CITIGROUP STAKE
By that measure, Berkshire’s earnings were up significantly to $9.28 billion, or $6,312.49 per Class A share from last year’s $6.69 billion, or $4,399.92 per Class A share.
Berkshire Hathaway CEO Warren Buffett (FBN)
Analysts covering Berkshire expected the company to report operating earnings per Class A share of $4,741.64.
Berkshire said its revenue grew more than 10% to $76.2 billion in the quarter as many of its businesses increased prices.
Berkshire’s many companies still performed well, suggesting the overall economy is weathering the pressure from inflation and rising interest rates.
BUFFETT-BACKED NUBANK BEATS REVENUE ESTIMATES ON STRONG CLIENT ADDITIONS
It was a rough quarter for shares of three of Berkshire’s biggest investments — Apple, American Express and Bank of America.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 165.35 | -0.23 | -0.14% |
| AXP | AMERICAN EXPRESS CO. | 157.51 | +0.64 | +0.41% |
| BAC | BANK OF AMERICA CORP. | 33.96 | +0.56 | +1.68% |
They all fell significantly during the second quarter, but rebounded during the third quarter, boosting the value of Berkshire’s portfolio since the end of the quarter.
A BNSF freight train with 76 container cars and FedEx freight trailers travels from Seattle to points east. ( (Photo by William Campbell/Getty Images) / Getty Images)
Besides investments, Berkshire owns more than 90 companies outright. Berkshire said operating profits were up at all of its major units, including its insurance companies, major utilities and BNSF railroad.
BUFFETT’S BERKSHIRE HATHAWAY BUYS EVEN MORE OCCIDENTAL SHARES
Berkshire did report a $487 million pretax underwriting loss at Geico, which reported bigger auto claims losses because of the soaring value of vehicles and ongoing shortages of car parts.
In this photo illustration, the Government Employees Insurance Company (GEICO) logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
Berkshire is often seen as a microcosm of the broader economy because its collection of manufacturing, retail, insurance, utility and service businesses touches so many different industries, and Berkshire’s profits tend to follow whatever the economy is doing.
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Berkshire said it was sitting on $105.4 billion cash at the end of the quarter, which was little changed from the $106 billion it reported at the end of the first quarter.
The Associated Press contributed to this report.