Market Daily

Market Daily

SEC criticized by crypto executives for lack of clarity

SEC – After the current events in the crypto field, some executives from crypto businesses have expressed their dissatisfaction with the US government.

Several have chastised them for a lack of understanding of the industry’s regulations.

Yet, the Securities and Exchange Commission is a key target of the crypto community’s fury owing to its aggressive efforts against crypto businesses.

US & crypto

While other countries are becoming receptive of Bitcoin, the United States is lagging behind.

The government has yet to adopt a complete set of legislation that would allow cryptocurrency and blockchain enterprises to operate without fear of being targeted by officials.

With the collapse of cryptocurrency exchange FTX in 2022, the US Securities and Exchange Commission (SEC) has taken the initiative to increase legal measures against firms.

The clash

The SEC issued a Wells notice to Coinbase, one of the leading cryptocurrency exchanges, on Wednesday.

It issued a warning to the corporation after discovering probable breaches of US securities law.

In addition, the SEC charged crypto entrepreneur Justin Sun with fraud and unregistered securities against celebrities who promoted digital currency he was advocating.

The SEC is now involved in a legal battle with numerous other cryptocurrency startups, including Gemini, Genesis, and Ripple.


“It feels uncollaborative,” said an anonymous crypto executive over the Paris Blockchain Week event.

“It’s very frustrating for players that have been doing right the whole time.”

Meanwhile, ConsenSys CEO and Ethereum co-founder Joe Lubin voiced alarm about the ecosystem.

“I think we’re sort of continuing to watch the SEC play this game of punishing the people that are still surviving,” said president Nicolas Cary.

“And it’s a little bit, you know, sort of frustrating thing to observe.”

The majority of the SEC’s activities include applying contemporary restrictions to the crypto business decades after the Howey Test.

The Howey Test is an important test for determining whether or not something is secure.

Yet, many in the cryptocurrency business believe that is not the best approach to go.

“Where I think you have less successful regulatory regimes is when you try to analyze crypto through the lens of traditional finance,” said Oliver Linch, the CEO of Bittrex Global.

“You say, ‘Well, is it a bit like a security? Is it a commodity?’ No, it’s kind of none of those things. It’s crypto.”

Read also: TikTok ban would be better for China than selling

Clarity & sympathy

The Paris Blockchain Week is one of Europe’s most famous crypto events, and the SEC’s actions were one of the most hotly debated subjects among guests.

Some executives asked US regulators for clarification.

“We’d love to have a little more clarity in regulation,” said Silvio Micali, the founder of blockchain company Algorand.

Some, on the other hand, were more sympathetic to SEC.

They said that the watchdog is following the regulations as they are, and that the US government has the authority to amend them.

“What are they supposed to do? If all you’re given is a hammer, the whole world looks like a nail,” said Linch.

However, Cary stated that the SEC is simply doing its job in order to safeguard customers.


In an editorial article published on The Hill this month, SEC Chair Gary Gensler addressed the issues, claiming that the agency was clear on the laws.

“I find the talking point that there’s a lack of clarity in the securities laws unpersuasive,” he said.

“Some crypto companies might message that the laws are unclearer rather than admitting that their platforms don’t have sufficient investor protection.”

Gensler also identified examples of crypto enterprises that are subject to traditional securities rules, such as when they provide loan products.

Furthermore, he stated that crypto middlemen are not lined up to register with the SEC and comply with Congress’ legislation.

Additionally, the SEC chair stated that enforcement proceedings are another tool in the regulator’s arsenal for weeding out noncompliance.

Falling behind

CEOs cautioned that the United States’ lack of effective regulation might cause the country to slip behind other countries and jurisdictions.

“It’s incumbent, I think, on Congress to actually create a legal regulatory framework that regulates crypto properly, because… crypto is here to stay,” said Linch.

Governments throughout the world are debating how to regulate bitcoin.

Dubai and Switzerland have both recognized themselves as crypto-friendly jurisdictions with favorable regulations.

Meanwhile, the European Union plans to implement the Markets in Crypto-Assets Regulation, or MiCA, in 2023.

It is intended to impose regulations on and around digital currency enterprises.

Ripple’s president, Monica Long, fears the United States may slip behind other jurisdictions in the crypto economy.

“Europe is really emerging as a leader in terms of setting really clear regulations and rules that allow crypto companies and also traditional finance to embrace crypto,” said Long.

Image source: The American Prospect

TikTok ban would be better for China than selling

TikTokYears ago, the Trump administration threatened to ban TikTok if its Chinese owners did not sell the firm to US investors.

While the corporation dodged such a threat, a similar catastrophe awaits it in 2023.

The news

Shou Zi Chew, the CEO of TikTok, will testify before US senators on Thursday, some of whom have called for the app to be banned in the US.

They reasoned that TikTok posed a national security concern, causing sales demands to increase once more.

Analysts and specialists, however, believe that an outright divestiture is not now feasible.

According to them, the Chinese government regards TikTok technology as sensitive.

They have also been taking efforts since 2020 to guarantee that the corporation may refuse possible transactions by its Beijing-based owner, ByteDance.

Another problem is the ownership of TikTok’s algorithms and the huge data acquired from the 150 million US customers that use TikTok.

Chinese officials

Advanced technology, such as content recommendation algorithms, is essential to the Chinese government’s national interests.

In December, officials suggested tighter controls on the sale of the technology to overseas bidders.

Kaiyuan Capital’s chief investment officer, Brock Silvers, issued a remark on Beijing and the sale of TikTok.

“Beijing will have no say in the US decision to mandate the sale of TikTok, but it will retain the ultimate approval authority over such a sale.”

“It also seems extremely unlikely that Beijing will accept any deal that removes TikTok’s algorithm[s] from its direct control and regulatory authority.”

The algorithm

TikTok’s algorithms are critical to the app’s success since they keep users engaged.

The system recommends videos based on the user’s interests and activity, pouring films they enjoy watching.

In August 2020, Chinese officials put the algorithms on the prohibited list of technology.

By then, the Trump government was attempting to prohibit TikTok unless it was sold.

Nonetheless, a statement from a trade professor at the University of International Business and Economics was published in Chinese official media.

Cui Fan, the professor, stated that the amended restrictions meant ByteDance would need a Beijing license to commercialize the technology.

“Some cutting-edge technologies might impact national security and public welfare, and need to be included in [export control] management,” said Cui Fan.

The proposed sale of TikTok to Oracle and Walmart in 2020 was stymied when Beijing placed the algorithm to its export restriction list.

The Trump-era decree targeting TikTok was eventually rescinded by the Biden administration.

Instead, they substituted a sweeping mandate on researching technologies linked to foreign rivals.

Read also: First Republic Bank rescued by large banks, $30 billion loaned

The spotlight again

While they were happy to be out of the political limelight, the corporation was caught up in the geopolitical conflict between Beijing and Washington.

The Hinrich Foundation’s Alex Capri stated:

“The TikTok hearings in the United States mark the beginnings of a regulatory meat-grinder facing all [Chinese] tech companies.”

A prominent Chinese regulator of digital and traditional media paid a visit to the ByteDance office last week.

According to the regulator’s website, he encouraged the corporation to enhance recommendation algorithms in order to disseminate good energy and improve online content review.

The centerpiece of the visit was Beijing’s ambition to keep its most powerful internet corporations near.

According to the corporate data website Qichacha, a Chinese government entity purchased a 1% golden share in ByteDance’s Beijing affiliate in April 2021.

The company has the operational rights for TikTok’s Chinese sibling app, Douyin, as well as Toutiao, a news aggregation app.

“TikTok’s algorithms make it truly unique in terms of data harvesting and strategic analytics,” said Capri.

“Therefore, I don’t see Beijing allowing it to fall into the hands of US interests.”

“Unless they can somehow still access TikTok’s data through other means and methods, including ongoing cyber intrusion and other forms of back-door access.”

A tighter grip on the technology

Recently, Chinese officials have tightened their hold and control over algorithm technology.

A legislation requiring enterprises to register recommendation algorithms with the Cyberspace Administration went into effect in March 2022.

The administration is a regulator of the internet that reports to President Xi Jinping.

Furthermore, laws governing deep synthesis algorithms went into force in early 2023, limiting the usage of AI-powered picture, audio, and text-generation software.

The legislative changes imply that the company’s recommendation algorithms might be susceptible to China’s export regulations, according to adjunct New York University School of Law professor Winston ma.


TikTok has taken the initiative to put in place technological and organizational safeguards to protect user data from unwanted access.

The Project Texas proposals would offer the US government and third-party corporations some control over the company’s data activities.

Project Clover, a similar strategy for the European Union, is being developed by the business.

Yet, US authorities are not completely satisfied since China may have sway over TikTok’s Chinese owners.

Capri stated that if TikTok was sold to an American buyer, the issues would remain.

“A change of TikTok’s ownership solves nothing,” he said.

“The real issue is general data security and who ultimately has access to that data, by whatever means, regardless of legal ownership.”

The actual test, according to Capri, is if user data can be sufficiently ring-fenced and whether privacy and security can be achieved by data segregation, encryption, and other methods.

Brock Silvers believes the two sides will reach an agreement in which American concerns are addressed but Beijing retains control of TikTok.

He believes that Beijing would rather TikTok abandon the American market than give up the algorithm.

“If any Chinese company is to have a chance of surviving increased scrutiny from Western governments, they have to entrust their data to third party security firms and endure rigorous third party audits and government intrusion, in addition to transferring ownership,” said Capri.

“This is really an existential crisis for Chinese firms operating in the west.

Image source: Business Insider

MapleStory set to be the next game to break into the Web3 space

MapleStory – As the Web3 space continues to evolve, developers have also taken the initiative to stay with the times.

Web3 gained a lot of attention in recent years, particularly with the NFT boom, which saw thousands of projects surface.

It has also attracted the attention of major brands, celebrities, and influencers, who have taken a keen interest in the new technology.

Nexon, a prominent name in game publishing from Asia, is the latest entity to dive into Web3 with a game within the space.

The news

Nexon is looking to catch up with the times by developing a new Web3 game based on MapleStory.

MapleStory is the company’s popular pixelated 2D role-playing project that was developed by South Korean firm Wizet and published by Nexon.

During the Game Developers Conference in San Francisco on Tuesday, Nexon announced the development of MapleStory Universe.

The Web3 game will be launched on a private Supernet on Polygon, showing the company’s determination to make its mark.

The game

MapleStory is one of the longest-running games, spanning over two decades after its launch in 2003.

According to a Nexon announcement earlier this year, the game has generated more than $4 billion in revenue.

It has also raked in more than 180 million registered users.

To gain a better perspective of MapleStory’s success, its Steam page boasts a large tally of over 260 million players total.

MapleStory Universe Group Leader Hwang Sun-Young released a statement expressing his enthusiasm for the project’s development saying:

“We are looking forward to expanding the NFT ecosystem envisioned by MapleStory Universe by building on Polygon.”

“We will work closely with the team at Polygon Labs to develop and market the game.”

The Supernets

Polygon is widely renowned as an Ethereum scaling network, enabling faster and cheaper transactions compared to the Ethereum mainnet.

Nexon’s upcoming PC game uses Polygon Supernet that will allow it to have its own dedicated app chain, according to Polygon Labs VP, Global Games and Platform Business Development Urvit Goel.

“They have the ability to scale in a way that you can’t scale on a shared blockchain,” said Goel regarding Nexon and its planned Supernet.

“They have a very broad vision of how many transactions they think they’ll do daily, because the game and the IP is so large.”

The Polygon Supernets have a similar approach 

For example, they provide a dedicated sub-network that individual projects can use.

In addition, the Supernets provide creators with customization options and insulate decentralized apps (dapps) and games from possible performance issues on the broader public network.

Read also: Alameda payments gave SBF bulks of cash

Early announcements

In 2022, MapleStory Universe was announced, but until today, it doesn’t have a release date confirmed yet.

However, Goel said there would be no NFT presales.

Instead, players would have to earn items as NFTs by playing the game.

“They’re not pushing for in-app purchases,” said Goel, referring to the typical microtransactions in mobile games.

The MapleStory Universe

The upcoming MapleStory Universe is an NFT-centric game, which means tokenized assets are an integral part of the game that can be traded or transferred through the game’s marketplace.

According to Nexon, the MapleStory Universe will have a crypto token in the long run.

However, the details have yet to be finalized.

“We plan on issuing our unique coin, and specific details about this will be revealed later with our tokenomics,” said the game studio.

South Korean companies diving into Web3

Nexon is a South Korean and Japanese company that takes most of its revenue from the South Korean market.

With its strong roots with the South Korean market, Polygon Labs’ Urvit Goel assured that it’s not the only South Korean studio diving into the Web3 world.

“Korea has been by far the leader from a developer standpoint,” he said.

“If you look at the top 10 gaming companies in Korea, 8 out of 10 have publicly stated that they’re building something on the blockchain, which is very unique globally.”

Other major South Korean game developers and publishers trying their hand on Web3 projects include NCSoft and Netmarble.

The two companies are building an upstart blockchain network called Sui.

Krafton, the creator of the popular first-person shooter games PUBG: Battlegrounds, is also collaborating with Solana Labs to launch various blockchain initiatives.

Ryan Wyatt, the president of Polygon Labs, released a statement emphasizing the importance of South Korea as a market in Web3 gaming.

Image source: NFT Insider

First Republic Bank rescued by large banks, $30 billion loaned

First Republic BankThe banking industry has entered a crisis as numerous banks confront diminishing customer and investor trust.

Silicon Valley Bank and Signature collapsed late last week, and Credit Suisse in Europe is also in trouble.

This week, First Republic Bank is grappling with fragile investor and consumer trust.

Unlike other institutions, however, there is still hope for the bank, since it is due to get a lifeline from some of America’s most important banks.

The news

While First Republic Bank faces a credibility crisis, many American central banks are offering it a $30 billion lifeline.

Some of the banks that are assisting include:

  • Bank of America
  • Citigroup
  • JPMorgan Chase
  • Truist
  • Wells Fargo

The Treasury Department issued the following statement on Thursday:

“This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system.”

The help

The $30 billion will provide the ailing San Francisco bank with the funds it requires to satisfy consumer withdrawals.

It also helps the US banking sector in the midst of a widespread lender crisis.

The banks issued the following statement:

“This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes.”

“[And] it demonstrates their overall commitment to helping banks serve their customers and communities.”

“Regional, midsize, and small banks are critical to the health and functioning of our financial system.”

“The banking system has strong credit, plenty of liquidity, strong capital, and strong profitability. Recent events did nothing to change this.”

“Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most,” they continued.

“America’s larger banks stand united with all banks to support our economy and all of those around us.”

Liquidity problems

First Republic Bank’s shares were stopped three times on Thursday due to volatility.

Yet, it ended the day at more than 10%.

The bank’s issues highlighted the ongoing concerns about the banking industry following the failures of Silicon Valley and Signature Bank.

Concerns were raised on Wednesday about depositors’ capacity to withdraw their funds.

As a result, First Republic Bank’s credit rating was reduced by Fitch Ratings and S&P Global Ratings.

First Republic Bank is one of the regional banks having a large number of uninsured deposits in excess of the $250,000 FDIC limit.

While it does not compare to Silicon Valley Bank’s large 94% uninsured deposits, S&P Global reports that First Republic has a sizable 68% of total deposits that are uninsured.

Nonetheless, many clients chose to quit the bank and deposit their funds elsewhere, posing a challenge for First Republic Bank.

As a result, the bank has two options: borrow money or sell assets in order to pay consumers in cash for their deposits.

Banks generate money by lending parts of their customers’ deposits to other customers.

Even so, First Republic Bank has an extraordinary liability-to-deposit ratio of 111%, according to S&P Global.

The ratio implies that the bank lent more money than it had in client deposits, indicating that it is a hazardous investment for investors.

Read also: Credit Suisse takes up Swiss National Bank’s loan offer after 30% shares crash

Private meeting

Treasury Secretary Janet Yellen met privately with JP Morgan CEO Jamie Dimon on Thursday, according to two persons familiar with the matter.

They met before agreeing to put $30 billion in First Republic Bank to keep it solvent.

The meeting was the culmination of two days of meetings between Yellen and other US authorities as well as heads of the country’s top banks.

The two sides worked together to find a solution for the bank’s problems.

Janet Yellen led the government effort, while Dimon urged bank CEOs to support the influx of deposits.

According to a source, Yellen proposed gathering together the top US banks to make direct deposits for First Republic Bank.

The action was crucial in terms of preserving the bank’s deposit base.

That was also an important signal to the financial market about the bank and the American financial system.

Loan system

Following the fall of Silicon Valley Bank, the Federal Reserve established a lending system to avoid regional banks from failing.

The program permits banks to provide the Fed with Treasury bonds as security for one-year loans.

The Fed would then reimburse banks for the value of the Treasuries, which fell in value when the Fed raised interest rates last year.

The federal assistance looks insufficient to keep investors happy.

On Sunday, First Republic Bank unveiled a partnership with JPMorgan to fast access liquidity if needed.

Furthermore, the bank stated that it has $70 billion in idle assets that it will utilize to cover consumer withdrawals if necessary.

Image source: CNBC

Credit Suisse takes up Swiss National Bank’s loan offer after 30% shares crash

Credit SuisseWith the demise of Silicon Valley Bank last week, another big issue has surfaced.

The Swiss National Bank wrote to Credit Suisse to express its willingness to provide financial assistance.

Hours later, the megabank accepted the offer in order to persuade investors that it had enough money to be sustainable.

The news

Credit Suisse obtained a loan of 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank.

Investors in the failing megabank decreased their stakes by 30% on Wednesday.

The loan was made with the purpose of progressively expanding liquidity, according to Credit Suisse.

They made the following official statement:

“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.”

Credit Suisse said it repurchased billions of dollars in debt in addition to the central bank loan to limit commitments and interest payments.

The loan package includes $2.5 billion worth of US bonds and €500 million (or $529 million) in euro bonds.

The bank

Credit Suisse, founded in 1856, is usually regarded as one of the most prominent financial institutions.

It is one of 30 organizations identified as a “globally systemically significant bank,” including Bank of America, Bank of China, and JP Morgan Chase, to name a few.

Asian stocks fell dramatically early Thursday.

They have rebounded from the lows produced by Credit Suisse’s behavior so far, encouraged by the bank’s perseverance and determination to restore public trust.

According to a joint statement published early Wednesday by the Swiss National Bank and Swiss financial market regulator FINMA, Credit Suisse met the strict capital and liquidity standards for banks critical to the broader financial system.

“If necessary, the SNB will provide CS with liquidity,” the statement said.

SVB’s impact

After the collapse of Silicon Valley Bank in the United States late last week, investors were on edge.

Credit Suisse shares were then sold by investors, driving the bank to a new low as its most prominent sponsor appeared to rule out further investment.

According to Swiss officials, the troubles of “some” US banks do not pose an urgent threat to Swiss financial markets.

“There are no indications of a direct risk of contagion for Swiss institutions due to the current turmoil in the US banking market,” the authorities said.

No stake increase

After a capital increase in October, the Saudi National Bank has become Credit Suisse’s largest shareholder.

On Wednesday, Saudi National Bank Chairman Ammar Al Khudairy announced that the bank’s stake will not be raised.

“The answer is absolutely not, for many reasons,” said Al Khudairy. “I’ll cite the simplest reason, which is regulatory and statutory.”

“We now own 9.8% of the bank – if we go above 10% all kinds of new rules kick in, whether it be by our regulator or the European regulator or the Swiss regulator.”

“We’re not inclined to get into a new regulatory regime.”

Read also: Silicon Valley Bank collapse kicks off blame game

What happened?

Credit Suisse was a big Wall Street participant prior to recent blunders and compliance issues.

As a result of the errors, the bank’s image among clients weakened, and many key employees lost their jobs.

In the fourth quarter of 2022, customers withdrew 123 billion Swiss francs ($133 billion) from the bank.

Credit Suisse later announced a net loss of around 7.3 billion Swiss francs ($7.9 billion), suggesting that the firm was experiencing its biggest financial crisis since 2008.

In October, the bank announced a drastic reorganization plan that would result in the loss of 9,000 full-time employment.

The concept also included a part of its investment bank devoted to wealth management.

Others were suspicious of the reorganization, with the exception of Al Khudairy, who argued that the bank did not require extra cash.

Credit Suisse may not have enough capital to bear losses in 2023, according to Morningstar banking analyst Johann Scholtz, as funding costs rise.

“To stem client outflows and ease the concern of providers of wholesale funding, we believe Credit Suisse needs another rights [share] issue,” said Scholtz.

“We believe the alternative would be a break-up… with the healthy business – the Swiss bank, asset management, and wealth management and possibly some parts of the investment banking business – being sold off or separately listed.”


S&P Global Market Intelligence reported that the bank’s shares plunged 24% in Zurich on Wednesday.

They also said that the cost of acquiring credit Suisse default insurance had hit all-time highs.

The downturn expanded to other European financial equities, producing issues for banks in France, Germany, Italy, and the United Kingdom, among others.

  • BNP Paribas
  • Societe Generale
  • Commerzbank
  • Deutsche Bank

The stock fell 8% to 12%.

Although Credit Suisse’s problems are widely known, its assets of almost 530 billion Swiss francs ($573 billion) pose a higher risk.

Andrew Kenningham, Capital Economics’ chief European economist, wrote:

“[Credit Suisse] is much more globally interconnected, with multiple subsidiaries outside Switzerland, including in the US. Credit Suisse is not just a Swiss problem but a global one.”

More problems

Despite its many problems, the Swiss bank is still being investigated.

On Tuesday, Credit Suisse suspended top executives’ bonuses after admitting to “material weaknesses” in financial reporting.

According to the bank’s annual report, the group’s internal control over financial reporting was unsatisfactory owing to a failure to anticipate potential risks to financial statements.

The bank is putting together a regulatory tightening plan.

Image source: CNBC

Masatoshi Ito passed away at 98, Seven & I Holdings confirmed

Masatoshi ItoJapanese billionaire Masatoshi Ito died last week at the age of 98.

Ito was a driving force behind the internationalization of 7-Eleven convenience stores.

His death puts the saga of one of Asia’s most successful retail entrepreneurs to a close.

The news

Seven & I Holdings (SVNDF), which owns 7-Eleven, revealed Matasoshi Ito’s death in a statement made on Monday.

They announced that Ito died of old age on March 10.

“We would like to express our deepest gratitude for your kindness and friendship during his life and respectfully inform you of his passing,” the statement reads.

The business

Masatoshi Ito was the entrepreneur who revolutionized Japanese retail and turned a US-based firm into a global brand.

With his involvement with the corporation, 7-Eleven stores have become a norm throughout Asia, with a store within a few minutes’ walk in many cities.

Seven & I Holdings today has over 83,000 locations worldwide.

Their influence extends to 7-Eleven outlets in 19 different states and countries.

The company also controls the Speedway convenience store network in the United States.

Japanese-owned convenience store chains Lawson and FamilyMart are among Seven & I Holdings’ key rivals.

Yet, they have not acquired the same degree, scale, or global reach as the 7-Eleven empire.

Ito’s influence

Masatoshi Ito’s business potential would not have been appreciated if he had not known the late management consultant Peter Drucker.

Drucker described Ito as one of the world’s top entrepreneurs and business founders.

Masatoshi Ito revealed in an interview with The Journal of Japanese Trade and Industry in 1988 that he visited the United States in 1960.

He expressed surprise at how prosperous everyone seemed, especially given that Japan was still recuperating from the tragedy of World War II.

“I became particularly conscious of the sheer size of America’s consumer society and the distribution techniques that made it all possible,” he said.

“It then occurred to me that people in different cultures still have basically the same desires, assuming that they are at the same stage of development.”

“[And] I thought that Japan’s distribution system would become more like America’s as the Japanese consumer society grew bigger.”

“Ever since, I have visited America every year without fail, learning as much as I possibly could about distribution,” Ito continued.

“There were even years when I made several trips to America. These business trips reinforced my belief that Japan and America are moving in the same general direction.”

Read also: Silicon Valley Bank collapse kicks off blame game

The chain’s origins

The company that is now known as 7-Eleven began humbly.

Jefferson Green, often known as “Uncle Johnny,” began selling milk, bread, and eggs from the ice house of Southland Ice Company in Dallas, Texas, in 1927.

He noticed a need to carry the items for customers in need, so he started selling them on weekends and evenings when grocery shops closed early.

According to Joe C. Thompson Jr., a co-founder of The Southland Company, Uncle Johnny’s concept has promise.

They started selling the same things at several ice-dock sites, establishing the framework for convenience commerce.

Because of its extended hours of operation, the company was known as 7-Eleven, and it was open from 7am to 11pm

7-Eleven and Japanese Culture

Despite its American origins, Masatoshi Ito has identified 7-Eleven with Japanese convenience shop culture.

Masatoshi Ito is the postwar entrepreneur most responsible for the chain’s success in selling anything from yogurt to ready-made meals and medications.

Between the 1970s and the 1990s, he was able to do this through a series of purchases and expansions.

According to NHK, Japan’s national broadcaster, Masatoshi Ito began his career in 1958.

He ascended to the presidency of his family’s little Tokyo clothes store.

Ito eventually began selling food and home supplies.

He finally renamed the firm Ito Yokado and operated it in the manner of an American supermarket.

The first 7-Eleven opened in Tokyo, Japan, in 1974, following a contract formed between Ito Yokado and 7-Eleven owner, the Southland Corporation.

Masatoshi Ito’s company obtained a controlling stake in Southland in March 1991.

Ito resigned as president of Ito Yokado, according to NHK, to assume responsibility for alleged payoffs to racketeers of company executives.

In 2005, Seven & I Holdings was established as the holding company for 7-Eleven Japan and Ito Yokado.

Until his death, Ito served as the company’s honorary chairman.

In an interview in 1988, Masatoshi Ito was cited as saying regarding 7-Eleven’s success:

“I am frequently asked if I succeeded because of hard work or because I was just lucky. The answer is some of both.”

Image source: People

Silicon Valley Bank collapse kicks off blame game

Silicon Valley BankThe initial shock of the SVB collapse has worn off, and the blame game has begun as people look for those to blame.

The tech sector is blaming Silicon Valley Bank CEO Greg Becker.

Many blame Becker for the corporation’s status as the second-largest American financial catastrophe in history.

According to an alleged SVB employee, Becker publicly highlighted the bank’s financial problems before covertly providing cash assistance to weather the storm.

Individuals withdrew their cash as a result of the activities, which created a fearful atmosphere.

“That was absolutely idiotic,” said the employee. “They were being very transparent.”

“It’s the exact opposite of what you’d normally see in a scandal. But their transparency and forthright-ness did them in.”

The buildup

Greg Becker and his leadership team indicated last Wednesday night that they projected to raise $2.25 billion in cash from $21 billion in asset sales, resulting in a $1.8 billion loss.

Despite its best efforts, SVB has yet to make any firm pledges.

The news shook Silicon Valley, where the bank has been a crucial lender to tech startups.

Many business owners were terrified.

According to California regulator records, several corporations withdrew $42 billion on Thursday, while Silicon Valley Bank’s shares fell 60%.

As Silicon Valley Bank closed that day, it had a negative cash position of around $958 million.

“People are just shocked at how stupid the CEO is,” said the SVB employee.

“You’re in business for 40 years and you are telling me you can’t raise $2 billion privately? Get on a jet and fly to Kuwait like everyone else and give them control of one-third of the bank.”

Silicon Valley Bank has yet to comment, but CEO Greg Becker is claimed to have apologized to employees in a video statement.

“It’s with an incredibly heavy heart that I’m here to deliver this message,” said Becker.

“I can’t imagine what was going through your head and wonder, you know, about your job, your future.”

Read also: Mortgage rates still on 5-week trajectory


Silicon Valley Bank officials, according to Jeff Sonnenfeld, CEO of Yale School of Management’s Chief Executive Leadership Institute (CELI), deserve to be admonished for their “tone-deaf, bungled execution.”

In a joint statement, Sonnenfeld and CELI’s research director, Steven Lian, noted:

“Someone lit a match and the bank yelled, ‘Fire!’ – pulling the alarms in earnest out of genuine concern for transparency and honesty.”

Sonnenfeld and Tian claimed on Wednesday night that it was unnecessary to publicize the $2.25 billion unsubscribed capital offering.

They noted that Silicon Valley Bank had sufficient capital to fulfill regulatory requirements.

They also stated that reporting the $1.8 billion shortfall was superfluous.

The one-two blow, according to Sonnenfeld and Tian, generated a massive frenzy, culminating in a rush to withdraw deposits.

They speculated that the bank may have spaced the statements by at least one or two weeks, reducing the impact.

On Sunday, President Joe Biden’s administration unveiled a proposal to assist Silicon Valley bank clients.

Biden also emphasized that the US government will investigate all parties involved in the SVB catastrophe thoroughly.

He released a statement saying:

“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

The Fed’s involvement

According to Jeff Sonnenfeld and Steven Lian, Jerome Powell, the Chairman of the Federal Reserve and Biden’s choice to lead the Feds, and his colleagues bear some of the blame.

“There should be no mistaking that Silicon Valley Bank’s collapse was a direct result of the Fed’s persistent and excessive interest rate hike,” they wrote.

They stated that the Fed’s efforts to reduce inflation had two effects:

  • The value of the bonds Silicon Valley Bank was relying on for capital
  • The value of the tech startups SVB catered

Silicon Valley Bank, on the other hand, had over a year to prepare for and deal with the problems.

The unnamed SVB employee called the bank’s balance-sheet manipulation “stupidity,” casting doubt on the CEO and CFO’s strategy.

But, the employee, who is also a Wall Street veteran, believes the bank’s downfall was caused by mistakes and “naivety” rather than illegal activity.

“The saddest thing is that this place is Boy Scouts,” they said.

“They made mistakes, but these are not bad people.”

Image source: Reuters

Norfolk Southern evades calls to compensate East Palestine residents

Norfolk SouthernIn early February, a terrible tragedy hit the people of East Palestine, Ohio.

Toxic compounds were released into the air and nearby water when a Norfolk Southern train derailed.

After being evacuated, residents returned with trepidation, but the damage had already been done.

While Norfolk Southern has contributed to the restoration of normalcy in East Palestine, many individuals have voiced anger and frustration.

Jim Stewart

James Stewart is one of numerous East Palestine locals who have expressed dissatisfaction with the train transit company.

He was prepared to sell his property and retire when the Norfolk Southern train collapsed and spilled dangerous goods.

Stewart is now anxious about the value of his property.

He and his wife intended to offer the house in the spring, when prices were still climbing and inventory was scarce.

They also discussed his son’s family purchasing their own property across the street from them.

“Since the derailment, I lost all those options,” said Stewart. “Who is going to buy contaminated land?”

“The older people are willing to stay and live it out. The younger bunch, they are smarter. They’re thinking of their families.”

“I wouldn’t want my grandchildren here. We don’t know if the ground is going to be good enough to grow grass. There are too many unknowns.”

During a Town Hall meeting on February 22, James Stewart voiced his frustrations with the derailment.

“You burned me,” he told Norfolk Southern CEO, Alan Shaw.

“We were going to sell our house. Our value went phoom.”

Shaw said when asked if Norfolk Southern planned to acquire Stewart’s house: “We’re going to do what’s right for this community.”

James Stewart works at a commercial baking business as a manager.

“I worked hard. I’m still working,” he reportedly told Shaw. “I’m in the 44th year at my job. I wanted to get out. Now I’m just stuck.”

When Stewart bought the house in 2016, it was worth $85,000.

He believes the incident has cost him a large amount of money.

According to Zillow, the property was appraised at $135,000 in February, but due to a lack of transactions, a current assessment is difficult to come up with.

“I’ll never get that. I’ll be lucky to get what I paid for it, if that,” Stewart said regarding the estimate.

He also believes that the improvements and testing needed to ensure the house’s safety would be too expensive.

Read also: Bank stocks investment spikes from recession fears

Senate hearing

Alan Shaw and Norfolk Southern have let many people down, including Jim Stewart.

Neither the CEO nor the firm has agreed to make up the difference in the property’s value.

At last Thursday’s Senate session, Sen. Ed Markey asked Shaw four times to commit to paying homeowners.

Shaw, on the other hand, just responded to much frustration, saying: “Senator, I’m committed to do what’s right.”

Markey rejected his response, stating:

“Will you commit to ensuring that these families, these innocent families do not lose their life savings in their homes and small businesses? The right thing to do is to say, ‘Yes, we will.'”

“These families want to know long term, are they just going to be left behind. Once the cameras move on, once the national attention dies down, where will these families be?”

“I think they’re going to be in the crosshairs of the accountants of Norfolk Southern saying ‘We’re not going to pay full compensation.'”


Compensation for homeowners and businesses is not difficult for a company the size of Norfolk Southern.

East Palestine is home to around 5,000 people and 2,600 residential buildings.

The average property value in January 2023, according to Attom, will be $146,000.

The total value of all residential real estate in town, including single-family homes and multi-family constructions, is roughly $380 million.

The figures reflect a minor fraction of Norfolk Southern’s revenue.

The company made $4.8 billion in operating income and $3.3 billion in net income in 2022, up 9% over the previous year.

As of December 31, Norfolk Southern has $456 million in cash on hand.

In 2022, the firm planned to return earnings to shareholders by repurchasing $3.1 billion in shares and paying $1.2 billion in dividends.

Several days before the disaster, Norfolk Southern declared a 9% dividend increase.

The board of directors of the firm approved a $10 billion share repurchase plan in 2022, with the authority to acquire $7.5 billion of the remaining funds as of December 31.

Senator Jeff Merkley questioned the firm during the hearing on Thursday:

“Will you pledge to no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?”

Alan Shaw, on the other hand, sidestepped the question by saying, “I will commit to continuing to invest in safety.”

According to, Norfolk Southern also spends a lot of money on lobbying, spending $1.8 million last year.

Senators questioned the lobbying expenditures throughout the session, primarily because Shaw declined to commit to supporting the Senate’s bipartisan plan to improve railway safety in the aftermath of the catastrophe.

When asked about the bill’s provisions, Alan Shaw declined to endorse them.

Instead, he answered: “We are committed to the legislative intent to make rail safer.”

Image source: The Colombus Dispatch

Mortgage rates still on 5-week trajectory

Mortgage Despite the new year, the fight against inflation continues due to it being stubbornly unpredictable.

Mortgage rates fell below 7% for the seventh week in a row, although the Federal Reserve said rates may increase higher.

Fixed-rate average

According to Freddie Mac data issued on Thursday, the 30-year fixed-rate mortgage averaged 6.73% in the week ending March 9.

A week ago, the fixed-rate mortgage was at 6.65%.

Last year, the 30-year fixed rate was 3.85%.

It soared around 7.08% in November before declining.

Despite the positive indicators, interest rates started to increase again in February.

In the previous month, the fixed-rate mortgage has climbed by half a percentage point.

The solid economic data indicates that the Federal Reserve still has work to do in combating inflation and will most likely continue to raise the benchmark lending rate.

“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” noted Sam Khater, a chief economist from Freddie Mac.

“Overall, consumers are spending in sectors that are not interest rate-sensitive, such as travel and dining out.”

“However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”

The average mortgage rate is derived by Freddie Mac using mortgage applications received from scores of lenders across the United States.

It is only available to individuals with excellent credit and a 20% down payment.

Rate hikes confirmed to continue

Inflation looked to be reducing as 2023 approached.

So far, strong employment growth and a rising Consumer Price Index revealed that inflation was still present and continuously high.

On Tuesday, Federal Reserve Chairman Jerome Powell testified before Congress, suggesting that the central bank will most likely raise interest rates more aggressively than originally projected.

Jiayi Xu, an economist at, stated:

“While last month Fed officials said that a smaller increase in the federal funds rate would help create a soft landing for the economy, Powell’s testimony on Tuesday made it clear that the central bank is prepared to return to a faster pace of rate increases if the incoming February economic indicators remain strong.”

She feels that the outcome shows that investors were not fully prepared since they are anxious about the Federal Reserve’s upcoming activities.

On March 21-March 22, the Fed will convene another rate-setting meeting, with another half-point rate rise probable.

Read also: Bank stocks investment spikes from recession fears

“Uncertainty about how high rates will go and how long they will remain elevated makes it challenging for investors to make well-informed decisions,” said Xu.

“Therefore, it’s crucial to keep a close eye on the latest developments from the Federal Reserve.”

Although the Fed does not set mortgage interest rates directly, its actions have an influence on them.

Mortgage rates are frequently associated with 10-year US Treasury bond yields.

It reacts to the Fed’s activity, what it really does, and how investors react to it.

Mortgage rates climb when Treasury yields rise, while mortgage rates fall when yields fall.

Housing market

Rising mortgage rates have impacted the spring selling season.

Mortgage applications climbed modestly last week, following three weeks of reductions, according to the Mortgage Bankers Association.

As a result, activity decreased.

Bob Broeksmit, MBA’s president and CEO, stated:

“Even with this jump in activity, both purchase and refinance applications remain well below year-ago levels when rates were much lower.”

“The recent increase in mortgage rates, right at the start of the busy spring buying season, could cause prospective buyers to delay decisions until rates moderate.”

Homebuyer confidence fell to a new low in February, according to a Fannie Mae survey.

Mood dipped after three months of improvement, pushing the indicator closer to its all-time survey low from October.

The greatest substantial drops were associated with employment security and home-selling situations.

“While the current housing market may not look promising for sellers due to factors such as an increasing number of unsold homes, longer time on market, and decelerating price growth driven by high mortgage rates, there are still opportunities to be found,” said Xu.

For example, she said that recent sales numbers show that the percentage of first-time homebuyers is higher than previous year.

“As a result, sellers with starter homes may see robust demand and retain some bargaining power.”

Additionally, Xu remarked that the long-term presence of hybrid working models allows greater options for homeowners when picking where to stay.

Buyers will relocate away from work if they do not commute to work every day, rather than contending for a house in congested, central districts.

“This trend could make homes with easy access to public transportation systems more attractive to home buyers, which, in turn, enhances bargaining power for the sellers,” said Xu.

She also remarked that sellers who are also buyers may benefit from their record-high equity, even if they have to adjust their expectations to lower asking prices.

Image source: Money

Bank stocks investment spikes from recession fears

Bank stocks According to analysts, major economies may well stall or suffer a recession.

As a result, in 2023, investors are breaking with tradition and flocking to large bank stocks.


From January and late February, the Stoxx Europe 600 Banks index, which comprises 42 major European banks, surged by 21%.

It surpassed its bigger benchmark index, the Euro Stoxx 600, to set a five-year high.

Yet, the KBW Bank, which monitors 24 of the top American banks, gained by 4% in 2023, outperforming the S&P 500 by a wide margin.

Since their lows in October, the two bank-specific indexes have climbed.

The economy

So far, the economic condition is less advantageous.

Compared to last year, the main economies in the United States and the European Union are predicted to grow slightly.

However, output in the United Kingdom is expected to decline.

Former Treasury Secretary Lawrence Summers feels that a quick recession is dangerous for the United States at some point.

But, as a result of widespread economic weakness and unsustainable inflation, central banks were forced to raise interest rates.

In any event, it has helped banks by allowing them to generate bigger profits on consumer and business loans as savers deposit more money into savings accounts.

While rate hikes have kept major banks’ stocks steady, fund managers and analysts believe investor and analyst confidence in their ability to weather economic storms since the financial crisis of 2008 has also played a role.

“Banks are, generally speaking, much stronger, more resilient, more capable to [withstand] a recession than in the past,” said Roberto Frazzitta, the global head of banking at Bain & Company.

Interest rate increases

When major countries’ interest rates climbed last year, governments launched steps to curb growing inflation.

The significant hikes followed a period of low borrowing costs that began in 2008.

The financial crisis wreaked havoc on the economy, prompting central banks to lower interest rates to historic lows in order to spur consumption and investment.

For more than a decade, central banks have done nothing.

In an environment where lower interest rates suggest fewer lender earnings, investors seldom bet on banks.

According to Capital Economics’ senior markets economist, Thomas Matthews:

“[The] post-crisis period of very low interest rates was seen as very bad for bank profitability, it squeezed their margins.”

But, the rate rise cycle starting in 2022, as well as a few signs of weakening, shifted investors’ expectations.

On Tuesday, Fed Chair Jerome Powell warned that interest rates may rise quicker than expected.

Read also: Mary Daly says more rate hikes is needed, gold price paused

Returning investors

Investors have been attracted to the higher possibility for shareholder profits.

The average dividend yield for European bank equities is currently 7%, according to Ciaran Callaghan, Amundi’s director of European market research.

According to Refinitiv data, the S&P 500 dividend yield is at 2.1%, while the Euro Stoxx 600 yield is 3.3%.

Additionally, European bank stocks have surged in the recent six months.

Capital Economics outperformed its American rivals, according to Thomas Matthews, because interest rates in countries that use euros are closer to zero than in the US, meaning that investors have more to gain from increasing rates.

He also stated that it may be ascribed to Europe’s unexpected turn of events.

Wholesale natural gas prices in the region hit a record high in August of last year, but have since returned to pre-Ukraine war levels.

“Only a few months ago, people were talking about a very deep recession in Europe compared to the US,” said Matthrew.

“As those worries have unwound, European banks have done particularly well.”

Structural changes

The European economy is still struggling at the moment.

As economic activity slows, bank stocks are harder to hit since bank revenues are related to borrowers’ ability to repay loans and fulfill consumers’ and businesses’ appetite for additional credit.

Banks, on the other hand, are better positioned than they were in 2008 to withstand loan defaults.

Authorities proactively established legislation requiring institutions to keep a strong capital buffer against possible losses during the global financial crisis.

Lenders must also have enough cash (or quickly convertible assets) to pay back depositors and other creditors.

Banks have undergone structural changes in the recent decade, according to Luc Plouvier, senior portfolio manager at Dutch asset management firm Van Lanschot Kempen.

“A lot of the regulation that’s been put in place [has] forced these banks to be more liquid, to have much more [of a] capital buffer, to take less risk,” he noted.

Image source: Stock Market Walk