The Week of March 22 depositors pulled another $126 billion from US banks

Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’  11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore

Important Takeaways:

  • Depositors drained another $126 billion from U.S. banks during the week ending March 22, according to new Federal Reserve data. This time the outflow came from the nation’s largest institutions.
  • The biggest 25 banks lost $90 billion on a seasonally adjusted basis, according to the Fed. The smaller banks, which suffered massive withdrawals the previous week as regulators seized regional lenders Silicon Valley Bank and Signature Bank, were able to stabilize their outflows.
  • The challenge the deposit outflows create for all banks is that if they raise rates on their deposits to keep customers, that could make them less profitable. But if they lose too many customers, as Silicon Valley Bank did, they give up critical funding and may have to sell assets at a loss to cover withdrawals.
  • Silicon Valley Bank customers withdrew $42 billion in one day, leaving the bank with a negative cash balance of $958 million.

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Breakdown of Washington’s spending on War in Ukraine as Americans wonder where $113 billion has gone

Revelations 6:3-4 “when he opened the second seal, I heard the second living creature say, “Come!” 4 And out came another horse, bright red. Its rider was permitted to take peace from the earth, so that people should slay one another, and he was given a great sword.

Important Takeaways:

  • $113 BILLION on a war with no end in sight: breaks down Biden’s enormous military package for Ukraine on the first anniversary of Putin’s invasion, the Republican audits, and what the taxpayers think
  • The last time the United States gave Europe such substantial financial backing, President Harry Truman was trying to rebuild a continent ravaged by the Second World War.
  • Seventy-five years on, the Biden administration and Congress have now set aside a similarly staggering $113 billion in American taxpayer funds for Ukraine in a conflict that has no end in sight.
  • The huge support package – three times more than what the U.S. spent in Afghanistan in a year – is dominated by the $46.6 billion in military equipment and support.
  • the UK in second giving $5.1 billion since the start of the invasion and the EU handing over $3.3billion
  • The American package has so far included 8,500 Javelin anti-armor systems, a Patriot air defense battery, 20 Mi-17 helicopters, 31 Abrams tanks and 700 Switchblade drones.
  • 109 Bradley infantry fighting vehicles, 75,000 sets of body armor and helmets, 38 High Mobility Artillery Rocket systems, and 4,000 Zuni aircraft rockets have also been sent over.
  • Military analysts believe the Western hardware has been essential in helping Ukrainian forces keep the Russians at bay.
  • And Zelensky wants more, including fighter jets. There has been a push from both Republicans and Democrats to provide F-16s.
  • ‘American taxpayers are rightly frustrated with over a hundred billion U.S. dollars that have been spent in Ukraine, especially given the lack of a clear vision or strategic objective in the conflict’ Heritage Action for America executive director Jessica Anderson told
  • ‘Before Congress even discusses the possibility of additional aid, the public must get answers to a number of important questions.
  • ‘This includes some kind of public disclosure of where and how the previous economic aid has been spent, and public disclosure of the impact of drawdown authority.
  • ‘Additionally, the Biden administration must articulate a plan on what ‘victory’ is, the American commitment to that ‘victory,’ and the American financial commitment in a post-conflict reconstruction phase.’
  • ‘President Biden has been complaining that the Republicans don’t care about the deficit or debt and here he is handing out billions of taxpayer dollars in additional aid to Ukraine.
  • ‘America can’t afford to keep on writing checks. If Biden is serious about avoiding a debt ceiling disaster, he needs to act like it and put away the taxpayers’ checkbook.’

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U.S. plans to invest billions in manufacturing COVID-19 vaccine

By Jeff Mason and Alexandra Alper

WASHINGTON (Reuters) -The United States plans to invest billions of dollars in expanding COVID-19 vaccine manufacturing capacity and make available an additional one billion doses per year, White House COVID-19 coordinator Jeff Zients said on Wednesday.

Activists have pressured President Joe Biden’s administration to increase vaccine supply to poorer countries.

Zients said the government was preparing to offer makers of the mRNA vaccines substantial help to expand infrastructure and capacity, including facilities, equipment, staff or training.

Pfizer/BioNTech and Moderna are the only makers of mRNA vaccines, though Zients said subcontractors of those companies would also be included.

Production will start in the second half of 2022, he said.

The investment in vaccine production is part of a private-public partnership to address vaccine needs at home and around the world and to prepare for future pandemics, he said. It will be paid for with funds from the American Rescue Plan Biden signed into law in March.

In the short term, the program would make a significant amount of COVID-19 vaccine doses available at cost for global use. In the long term, it would help establish sustained domestic manufacturing capacity to rapidly produce vaccines for future threats, Zients said.

Zients said 80% of Americans 12 and older have received at least one COVID-19 vaccine dose, highlighting a milestone in efforts to curb the spread of the deadly virus.

He also said 2.6 million kids aged 5-11 will have received their first shot of the COVID-19 vaccine by the end of Wednesday.

(Reporting by Jeff Mason and Alexandra Alper, Additional reporting by Doina Chiacu and Ahmed Aboulenein; Editing by Chizu Nomiyama, Bernadette Baum and David Gregorio)

Saudi Arabia says it has seized over $100 billion in corruption purge

A view shows the Ritz-Carlton hotel's entrance gate in the diplomatic quarter of Riyadh, Saudi Arabia, January 30, 2018.

By Stephen Kalin and Katie Paul

RIYADH (Reuters) – Saudi Arabia’s government has arranged to seize more than $100 billion through financial settlements with businessmen and officials detained in its crackdown on corruption, the attorney general said on Tuesday.

The announcement appeared to represent a political victory for Crown Prince Mohammed bin Salman, who launched the purge last November and predicted at the time that it would net about $100 billion in settlements.

Dozens of top officials and businessmen were detained in the crackdown, many of them confined and interrogated at Riyadh’s opulent Ritz-Carlton Hotel.

Well over 100 detainees are believed to have been released.

Billionaire Prince Alwaleed bin Talal, owner of global investor Kingdom Holding, and Waleed al-Ibrahim, who controls influential regional broadcaster MBC, were freed last weekend.

“The estimated value of settlements currently stands at more than 400 billion riyals ($106 billion) represented in various types of assets, including real estate, commercial entities, securities, cash and other assets,” Sheikh Saud Al Mojeb said in a statement.

The huge sum, if it is successfully recovered, would be a big financial boost for the government, which has seen its finances strained by low oil prices. The state budget deficit this year is projected at 195 billion riyals.

In total, the investigation subpoenaed 381 people, some of whom testified or provided evidence, Mojeb said, adding that 56 people had not reached settlements and were still in custody, down from 95 early last week.

The government has generally declined to reveal details of the allegations against detainees or their settlements, making it impossible to be sure how much corruption has been punished or whether the $100 billion figure is realistic.

The only settlement disclosed so far was a deal by senior prince Miteb bin Abdullah to pay more than $1 billion, according to Saudi officials. Miteb was once seen as a leading contender for the throne, so his detention fueled suspicion among foreign diplomats there might be political motives behind the purge.

Although officials said both Prince Alwaleed and Ibrahim reached financial settlements after admitting unspecified “violations”, Prince Alwaleed continued to insist publicly he was innocent, while MBC said Ibrahim had been fully exonerated.

Economy minister Mohammed al-Tuwaijri told CNN this month that most assets seized in the purge were illiquid, such as real estate and structured financial instruments. That suggested the government may not have gained large sums of cash to spend.

In another sign that the investigation was winding down, a Saudi official told Reuters on Tuesday that all detainees had now left the Ritz-Carlton. The hotel, where the cheapest room costs $650 a night, is to reopen to the public in mid-February.

Some detainees are believed to have been moved from the hotel to prison after refusing to admit wrongdoing and reach financial settlements; they may stand trial.

Bankers in the Gulf said the secrecy of the crackdown had unsettled the business community and could weigh on the willingness of local and foreign businesses to invest.

“It’s reassuring if this situation is finally at an end, as the process was not clear from the start and at least if it is now ended, that provides some clarity and closure,” said a banker who deals with Saudi Arabia.

But Prince Mohammed appears to have won widespread approval for the purge among ordinary Saudis, partly because the government has said it will use some of the money it seizes to fund social benefits.

“What has happened is great, it will be counted as a win for the government. Whoever the person is, he is being held accountable, whether a royal or a citizen,” said Abdullah al-Otaibi, drinking at a Riyadh coffee shop on Tuesday.

An international financier visiting the region said authorities’ tough approach might ultimately prove effective.

“There are many different ways to fight corruption and not all of them are effective. Ukraine tried to do it by creating institutions, but that hasn’t really worked as that approach doesn’t change behavior,” he said.

“Saudi’s approach stands a better chance of being effective as it’s more direct.”

(Additional reporting by Sarah Dadouch in Riyadh and Tom Arnold in Dubai; Reporting by Andrew Torchia and Angus MacSwan)

Insurers to pay out record $135 billion for 2017 after hurricanes

The company logo of German reinsurer Munich Re is seen before the company's annual news conference in Munich, Germany, March 16, 2016.

By Tom Sims and Alexander Hübner

FRANKFURT/MUNICH (Reuters) – Insurers will have to pay claims of around $135 billion for 2017, the most ever, following a spate of hurricanes, earthquakes and fires in North America, according to a report published on Thursday.

German reinsurer Munich Re , in its annual natural catastrophe review, also said last year’s total losses, including those not insured, were $330 billion, the second-worst in history after 2011 when an earthquake and tsunami wreaked havoc in Japan.

Although individual events could not be linked directly to climate change, global warming is playing a role, Munich Re said. It expected more frequent extreme events in future.

“We have a new normal,” said Ernst Rauch, head of Munich Re’s Corporate Climate Center, which monitors climate change risks.

“2017 was not an outlier,” he said, noting insured losses have surpassed $100 billion multiple times since 2005. “We must have on our radar the trend of new magnitudes.”

Last year’s hurricanes Harvey, Irma and Maria in the United States and Caribbean, wildfires in California and earthquakes in Mexico destroyed homes, infrastructure and numerous lives.

The disasters also rocked global insurers. Munich Re and Hannover Re both issued profit warnings.

That dealt a blow to a sector already struggling with thin margins, stiff competition and falling prices.

Munich Re’s tally for the industry comes on the back of other estimates that underscored the severity of 2017.

In December, Swiss Re estimated global insured losses from catastrophes would hit $136 billion in 2017, the third-highest on record for the sector, with the United States hardest hit. That figure is not directly comparable to Munich Re’s estimates as it includes man-made disasters.

Reinsurers, which are in the business of insuring insurance, are experts in managing risk and rarely get caught off guard. Analysts have said reinsurers may need to take a fresh look at their risk models as the planet warms and storms become more intense.

A big question for the industry has been whether the run of catastrophes would allow them to achieve higher prices for their coverage, which have been in decline for years.

Early indications suggest modest increases. Global property reinsurance prices rose less than expected in the key Jan. 1 renewal season, with strong competition limiting increases to single digit percentages, brokers said this week.

A turnaround in prices would be the first major reversal since Hurricane Katrina in 2005.

(Editing by Maria Sheahan and Mark Potter)

Exclusive: At least $23 billion of property affected by Hurricane Harvey – Reuters analysis

A house is seen submerged by flood waters from Tropical Storm Harvey in Orange, Texas, U.S., August 30, 2017. REUTERS/Jonathan Bachman

By Ryan McNeill and Duff Wilson

(Reuters) – At least $23 billion worth of property has been affected by flooding from Hurricane Harvey just in parts of Texas’ Harris and Galveston counties, a Reuters analysis of satellite imagery and property data shows.

The number represents market value, not storm damage, and is but a small fraction of the storm’s reach, as satellite images of the flooding are incomplete. Satellite imagery compiled by researchers at the University of Colorado shows flooding across 234 square miles (600 sq km)of Harris County and 51 square miles (132 sq km) of Galveston County, about one-eighth of each county’s land area.

It is impossible to discern damage amounts from the data, as the satellite imagery does not reveal the depth of the floodwaters; nor does it reveal the impact of wind. But even this partial tally signals that the storm will rank among the most damaging in U.S. history.

Reuters overlaid the flood imagery on property parcel maps and found floodwaters had encroached on at least 30,000 properties in the two counties, with a total market value of $23.4 billion.

Of that, 26 percent is land value; the rest is buildings and other improvements. In Harris County, where Reuters was able to determine the property’s use, about 18 percent of the affected property is residential.

The tally omits much of Houston’s dense urban center because a satellite specializing in urban imagery has not yet taken enough images there. Floodwaters have inundated the area, like surrounding regions, and thousands of homes are damaged. Many roads, including vital highways and parkways, were submerged and businesses flooded and shuttered.

Ultimately, storm damage totals will come from estimates of insured and uninsured losses and disaster assistance payments, not from tallying property assessment values.

And real estate is only part of the equation in the rapidly rising toll as Harvey moves from Texas to Louisiana. Federal damage estimates will also include the vast cost of business interruptions, ruined vehicles and other personal possessions, repairs to roadways and other public infrastructure, and disaster aid like the money used to feed and house tens of thousands of displaced people.

Adam Smith, a lead scientist for the federal agency that compiles storm damage costs, said it is “very possible” Harvey’s costs may surpass the record $160 billion from Hurricane Katrina.

“But it will take some time to understand the magnitude of Harvey’s devastation, which is still unfolding,” Smith said in an email Wednesday to Reuters. “It is very unclear if Harvey’s costs will ultimately surpass Katrina. However, since this is an unprecedented extreme precipitation event over a major city, in addition to the damage to other cities (and) regions from wind, storm surge and flooding, it’s very possible.”

Hurricane Katrina in 2005 caused about $160 billion in damage, Hurricane Sandy in 2012 caused $70 billion, and Hurricane Ike in 2008 caused $34 billion, according to research by the National Oceanic and Atmospheric Administration. The damage figures are adjusted for inflation to 2017 dollars.

Harvey, a category 4 storm with 130 mph winds, came ashore Friday in Rockport, Texas. It churned slowly over the next five days, dropping about 50 inches of rain on Harris County, more than any tropical storm recorded in the continental U.S. since 1950.

Rob Moore, a senior policy analyst for water issues at the nonprofit Natural Resources Defense Council, said it’s “anybody’s guess” how much damage Harvey has wreaked.

“Because of the extent of flooding, a lot of insurance companies are expecting to see very high numbers of complete losses of residential properties,” said Moore, who monitors government and insurance industry reports. “And large proportions of those properties are going to be uninsured. A lot of people have dropped flood insurance policies the last few years.”

Homeowners who live outside the 100-year-flood hazard zone or don’t have mortgages are not required to buy flood insurance. Because there hasn’t been major flooding in Houston in 16 years, many homeowners have dropped coverage to save money.

Asked what would happen to them, Moore said, “They’re left in a situation nobody wants to be in. They’re not going to have very many options for repairing their homes. And a lot of forms of federal disaster assistance aren’t available if you don’t have flood insurance.”

Many of the neighbors who returned Wednesday to Oak Knoll Lane in Northeast Houston find themselves in that predicament. One of them, Valerie Stephens, 32, abandoned her house on Saturday, when about nine inches of water rushed into the house over half an hour. She has no flood insurance, and she said her house, valued at $79,000 on Zillow just before the storm, is worth “much less than that” now.

Up and down the street, water had topped mailboxes and left behind puddles of dirty water, a festering stink and a faint line of grime inside each house where the water had stagnated, usually a couple of feet off the floor.

That’s much less water than some areas have reported, but it was enough that residents began piling furniture on the curb and ripping open walls and floors to stop mold from creeping in and making the situation even worse.

Many did the same thing in 2001 after Tropical Storm Allison swamped the street.

“We’ve already pulled out the doors, the door frames. Then we’ll start with the sheetrock and the floors,” Stephens said. She expects to live with concrete floors and bare sheetrock while she finds the money to pay for all the damage.

(Reporting by Ryan McNeill and Duff Wilson in New York; Additional reporting by Peter Henderson and Ernest Scheyder in Houston; Editing by Janet Roberts and Marla Dickerson)

Senate clears way for $1.15 billion arms sale to Saudi Arabia

battle tank

By Patricia Zengerle

WASHINGTON (Reuters) – The U.S. Senate cleared the way for a $1.15 billion sale of tanks and other military equipment to Saudi Arabia on Wednesday, defending a frequent partner in the Middle East recently subject to harsh criticism in Congress.

The Senate voted 71 to 27 to kill legislation that would have stopped the sale.

The overwhelming vote stopped an effort led by Republican Senator Rand Paul and Democratic Senator Chris Murphy to block the deal over concerns including Saudi Arabia’s role in the 18-month-long war in Yemen and worries that it might fuel an ongoing regional arms race.

The Pentagon announced on Aug. 9 that the State Department had approved the potential sale of more than 130 Abrams battle tanks, 20 armored recovery vehicles and other equipment to Saudi Arabia.

The Defense Security Cooperation Agency said General Dynamics Corp would be the principal contractor for the sale.

Paul, Murphy and other opponents of the arms deal were sharply critical of the Riyadh government during debate before the vote, citing Yemen, the kingdom’s human rights record and its international support for a conservative form of Islam.

“If you’re serious about stopping the flow of extremist recruiting across this globe, then you have to be serious that the … brand of Islam that is spread by Saudi Arabia all over the world, is part of the problem,” Murphy said.

The criticism came days before lawmakers are expected to back another measure seen as anti-Saudi, a bill that would allow lawsuits against the country’s government by relatives of victims of the Sept. 11 attacks.

President Barack Obama has promised to veto that bill, but congressional leaders say there is a strong chance that lawmakers will override the veto and let the measure become law. Overriding a presidential veto requires a two-thirds vote in both the House and Senate.

In Yemen, where a Saudi-led coalition is battling Iranian-allied Houthis, the Houthis have accused the United States of arming and supporting the Saudis, who intervened on the side of Yemen’s exiled government.

The war has killed over 10,000 people and displaced more than 3 million.

But backers of the deal said Saudi Arabia is an important U.S. ally in a war-torn region, deserving of U.S. support.

“This motion comes at a singularly unfortunate time and would serve to convince Saudi Arabia and all other observers that the United States does not live up to its commitments,” Senator Majority Leader Mitch McConnell said.

(Reporting by Patricia Zengerle; Editing by Grant McCool and Sandra Maler)

Italy’s Renzi signs potentially huge business deals in Iran

Iran and Italy Leaders

ROME (Reuters) – Italy and Iran signed deals potentially worth billions on Tuesday when Prime Minister Matteo Renzi visited Tehran seeking a strong Italian foothold in a nation hungry for infrastructure investment as it emerges from financial isolation.

Renzi was accompanied by a delegation of some 60 business leaders in sectors including, energy, railways and defense, and by Italy’s export agency and state lender which pledged billions of euros in credit lines and guarantees.

Three months ago President Hassan Rouhani made Italy his first stop in Europe as he sought to drum up investment in the Iranian economy, which rejoined the global trading system in January following a deal to lift crippling sanctions in exchange for limiting its nuclear activities.

“The end of sanctions is a historic step not only for Iran but for the whole region,” Renzi told reporters in Tehran with Rouhani standing by his side.

“We are committed to making sure the efforts of the international community are accompanied by mutual trust and by the immediate relaunch of economic links.”

Business delegations from other European countries are expected in Tehran in coming weeks, but Italy is well positioned to win contracts that could deliver a much needed export boost for its chronically sluggish economy.

Enel said it signed a memorandum of understanding with the National Iranian Gas Export Company on possible future cooperation in natural gas, liquefied natural gas and related infrastructure, that could lead to long-term gas supplies for its power stations.

The Enel deal was one of seven signed by Renzi and Rouhani, Iranian state television said. Renzi was due to return to Rome on Wednesday.

Oil major Eni has an agreement that allows it to take oil from Iran in payment for previous investments while oil service group Saipem, expected to clinch a new deal on Tuesday, had already signed preliminary deals in January that a source said at the time could be worth $4-5 billion.

Italy’s state railways company, Ferrovie dello Stato, said it signed a “framework of cooperation” agreement to build two high-speed lines in Iran. The contract could be worth some 3 billion euros, a source close to the matter said.

Italy’s state-run lender Cassa Depositi e Prestiti will offer credit lines of 4 billion euros to companies building oil and gas infrastructure, while export agency SACE will guarantee loans and offer trade financing of 4.8 billion euros, a SACE statement said.

($1 = 0.8758 euros)

(Reporting by Steve Scherer and Stephen Jewkes, additional reporting by Sam Wilkin in Dubai, Isla Binnie in Rome and Francesca Landini in Milan, editing by Isla Binnie and Robin Pomeroy)