Week of May 1st, 2023

Who run the world?

Many outlets have removed chairs and benches, potentially boosting profits. But some shoppers won’t stand for it.

Deregulation has allowed lenders to operate across state lines, making it easier for banks to merge when they’re in trouble.

Insurance is a growing field right now. Severe weather and widespread worry are among the reasons.

If you thought artificial intelligence would radically alter the world, would you change how you live? Plus, the jobs report that’s “defying gravity.”

Short selling’s legal. Misrepresenting a firm’s finances for profit isn’t.

For some who think artificial intelligence will rapidly transform society, saving for or staying in college feel pointless. So do 401(k)s.

We ran some of the statements Fed Chair Jerome Powell made at his press conference this week.

70 years and huge economic changes separate the crowning of the late Queen Elizabeth and of her son King Charles.

Today’s jobs report came in stronger than expected, another sign that the labor market is staying tight despite the Federal Reserve’s best efforts. We talk to Christopher Low, chief economist at FHN Financial, about how that affects the central bank’s calculus going forward. Plus, CEOs from some of the biggest tech companies convened at the White House yesterday to discuss the future of artificial intelligence. And, a look at how the upcoming coronation of King Charles III comes against a completely different economic backdrop than his mother’s more than 70 years ago. 

The AI revolution is underway, and as with basically every new technology, businesses are finding ways to leverage it to boost worker productivity. We chat with Marketplace senior economics contributor Chris Farrell about the implications of a recent study that showed a marked increase in productivity among call center workers who used chatbots to interact with customers. And, some mid-sized banks in California and Arizona are seeing stock price jitters following the collapse of First Republic Bank — we look into what’s likely behind the volatility. 

Workplace AI is coming, and one study of a Fortune 500 company found it can be a productivity boon.

From the BBC World Service: TikTok has admitted that two employees in China and two in the U.S. viewed Financial Times journalist Cristina Criddle’s user data from her personal account without knowledge or consent. The BBC spoke with Criddle about her experience. Plus, the first images have been released from a $5 billion project to upgrade weather forecasting supercomputers aimed at improving warnings of violent storms. And, as the Coronation of King Charles III approaches, new coins have started to circulate with his head on them.

Plus, why your credit score is so important!

An AI-generated song went viral. Trapital’s Dan Runcie says to navigate this new technology, the industry should look to the past.

Plus, a Star Wars Day nod.

Shares of multiple regional banks slid today amid new tremors in the industry following First Republic’s collapse. How can they manage the turmoil? Also, brutal winter weather hurts ranchers and calves.

Emily Flitter of The New York Times explains how the head of JPMorgan became one of the key people trying to shore up the banking system.

Because calves are born wet they have to get dry, get a drink of milk, and warm up quickly. And the brutal weather has made that tough.

Larger lenders and regulators step in for the good of the overall banking system. But confidence among depositors is key.

What matters here is how the Labor Department defines productivity.

It’s not easy to start a carmaker, especially with rivals like Tesla, GM, Ford and Toyota, which have market share and manufacturing experience.

But it needs Congress’s blessing.

The accounts certainly look traditional, except they also come from a non-banking global brand.

The Federal Reserve rose rates yesterday, but could that have been the last we’ve seen of hikes for a while if the market is to be believed. We consult Diane Swonk, chief economist at KPMG, about what the future could hold based on what Fed Chair Jerome Powell said yesterday. Plus, tourism in China is looking to be back in full swing as the summer starts and the country’s economy continues to rebound from COVID lockdowns. And, the BBC’s Jonny Tickle reports on how an off-brand KFC in Russia compares to its American counterpart, which exited the country amid the war in Ukraine. 

Apple’s recent forray into financial services got even more extensive earlier this month when the tech giant announced it would offer high-yield savings accounts in partnership with Goldman Sachs. So far, it’s looked like a winning prospect for the iPhone maker, with reports from Forbes saying that the company saw over $1 billion in deposits in the first four days after launch. Plus, Fed policymakers are changing their tone on future rate hikes after yesterday’s quarter-point increase. And, how a lawmakers in California are looking to encourage more diversity in the entertainment industry. 

From the BBC World Service: Will the European Central Bank follow the Fed and raise interest rates for the EU? We ask Lena Komileva, from G+ Economics. Plus, the BBC’s Shingai Nyoka reports from Zimbabwe on former president Robert Mugabe’s family fortune after it was revealed in his daughter’s divorce papers. And, does Russia’s KFC copycat pass the taste test? BBC Moscow reporter Jonny Tickle has been to find out.

Some small production studios want to expand the presence of people of color among Hollywood directors and writers.

Many Americans get range anxiety when they contemplate buying an electric vehicle. Is the solution bigger car batteries or better charging and transit infrastructure?

Could AI soon rival crypto’s environmental repercussions?

Can rapid bank growth and consolidation be successfully regulated? Plus, pay gains are slowing, and inside a California recycling operation.

JPMorgan Chase’s purchase of First Republic includes its brick-and-mortar locations. In-person interaction is still a key part of the business.

Three major bank failures in two months. What happened to all those regulations?

We tour a materials recovery facility in California, where the stuff consumers toss into recycling bins is sorted.

The moderation in pay growth is part of more balanced and stable economic conditions, some economists say.

The Fed’s rate increases over the past 14 months, aimed at quelling inflation, have elevated the cost of loans and heightened the risk of a recession.

The Fed is expected to announce later today that it will continue its recent interest-rate-hiking trend, which comes amid a strong jobs report from the private payroll company ADP. We turn to Susan Schmidt, head of public equity at the State of Wisconsin Investment Fund, to break down what Jerome Powell and Co. could decide. Plus, the Fed’s inflation fight has hinged on raising rates to slow a tight labor market, and some signs like high-profile layoffs are pointing in that direction. And, we speak with Duke law professor Jennifer Jenkins about the court case playing out between Ed Sheeran and Marvin Gaye for alleged copyright infringement.

If it’s anything like the last writers strike, it could halt production for 100 days.

Screenwriters for TV and film went on strike yesterday after studios and the writers guild failed to come to a new contract deal. We look at how the work stoppage is affecting the industry further afield from Hollywood, particularly in the Atlanta metro area. Plus, bank stocks took a tumble yesterday after the announcement by federal regulators that First Republic Bank had failed and been acquired by JPMorgan Chase. Also, the collapse is likely to bring more regulation — and consolidation — to the banking industry. And, how the education field will change signficantly as generative AI explodes onto the scene.

It’s yet the latest case of where to draw the line between the building blocks of music and intellectual property.

From the BBC World Service:  The Chief Executive of UK regulator, the Financial Conduct Authority, has told the BBC they’ll relax rules around Initial Public Offerings in the UK after a 40% decline on the London Stock Exchange in 15 years. Also, we hear from a Professor of Business after educational stocks take a hit with the advancement of AI, and finally, BBC Sport Correspondent Alex Capstick explains why the Women’s Soccer World Cup is at risk of not being shown across Europe.

Ruthe Farmer, founder and CEO of the Last Mile Education Fund, says the process of applying for and securing an internship in tech often excludes low-income students who are educated at lesser-known colleges.

Think industry consolidation and new regulations. Plus, the risks of interest-only mortgages and an examination of the March job openings report.

It’s the consequence of multiple systemic failures.

Dave Montejano talks about the rising cost of his passion and building a film photography community online.

These mortgages were key to the economic climate that led to the 2008 financial crisis. First Republic had a lot of them.

New regulation and industry consolidation will be key. Loans may be scarcer for new businesses and in low-income and rural communities.

It takes more than trends and nostalgia to become popular a second or third time around. It can take years of hard work.

The number of openings decreased for the third straight month in March, but it’s still historically high.

A proposed merger between two of the largest grocery chains in the country, Kroger and Albertsons, is under review by the Federal Trade Commission for antitrust violations. If it goes through, rural communities fear that the union could mean store closures and layoffs. We examine how past mergers play into fears today. Plus, a look ahead to tomorrow’s Federal Reserve interest-rate-setting announcement with Michael Pugliese, senior economist at Wells Fargo Corporate & Investment Banking. And, the nominee to assume the World Bank presidency is looking to retool the Bank’s programs to further emphasize the fight against climate change. 

The outgoing World Bank president has been accused of downplaying the risks of fossil fuels.

JPMorgan acquired First Republic’s assets and customers, but also a lot of outstanding debt.

The pressure is now on for the White House and House Republicans to strike a deal to raise the nation’s debt ceiling by the end of the month. Yesterday, Treasury Secretary Janet Yellen announced that the U.S. could run out of money to pay its bills as soon as June 1. We look at what the deadline means for negotiators in Washington. Plus, JPMorgan Chase’s deal to acquire the failed First Republic Bank means that the megabank will bring in a bevy of assets and new customers, but also a load of debt and restructuring headaches. And, the BBC’s Elizabeth Hotson reports on how confectioners are dealing with higher prices for producing candy. 

The companies’ plans have drawn skepticism from trade unions, consumer advocate groups and Colorado’s attorney general.

From the BBC World Service: Geoffrey Hinton, one of the pioneers of Artificial Intelligence, quit his job at Google and has issued a stark warning to the BBC about the technology he helped create. Additionally, HSBC’s profits tripled in Q1 after acquiring Silicon Valley Bank UK. And Marketplace’s Leanna Byrne visits companies in the UK that are gearing up for the King’s coronation this weekend.

Mexico is in the middle of a tech boom after U.S. tech companies laid off thousands of workers.

Time is running out

For one, the Federal Deposit Insurance Corp. will absorb much of First Republic’s losses. Then, Federal Trade Commission Chair Lina Khan on regulating artificial intelligence and taking on some of the biggest companies in our economy.

Streaming is still king, but vinyl sales continue to grow.

For one, help from the FDIC, which will absorb up to 80% of the losses coming from First Republic’s residential and commercial loans.

The treasury secretary urges Congress to protect nation’s “full faith and credit” by raising the government’s borrowing authority.

Main Street banks, often more diversified and risk-averse than Wall Street banks, are largely shrugging off First Republic’s meltdown.

The resilience of this usually interest rate-sensitive sector makes the Fed’s goal of taming inflation that much harder.

“We need to make sure the market knows that there is no exemption for AI,” says Lina Khan of the Federal Trade Commission.

The failure and subsequent sale of First Republic Bank is the latest episode in the continuing fallout from the Silicon Valley Bank collapse in March. Yet there may be cause for cautious optimism this could be one of the final dominos to fall in the banking crisis. Julia Coronado, president of MacroPolicy Perspectives, tells us more about what could lay ahead. Plus, a deeper look into what exactly happened when financial regulators sprung into action overnight Monday. And, how Homeboy Industries, an LA-based nonprofit that rehabilitates formerly incarcerated and gang-affiliated people, is taking on the challenge of recycling clothing. 

The reverberations of the Silicon Valley Bank collapse have taken down First Republic. What’s next for the financial industry?

The embattled First Republic Bank, one of the institutions caught in the wake of Silicon Valley Bank’s collapse, was acquired overnight by federal regulators and sold to JPMorgan Chase. It’s a massive, multi-billion dollar deal that makes America’s largest bank even larger. Erik Gordon, professor at the University of Michigan, explains what the collapse says about the financial industry. Plus, we look at how the construction industry is dealing with an ever-present shortage of workers. 

From the BBC World Service: Overnight, First Republic Bank was taken under the stewardship of regulators, who then immediately sold it on to JPMorgan Chase, making it the second biggest bank in American history to fail. Banking analyst Frances Coppola talks us through the ramifications. Plus the BBC Business Editor in India, Arunoday Mukharji, reports on India becoming the world’s most populous country.

Diverting textiles from landfills is more difficult and more expensive than doing so for paper and glass. A group of formerly incarcerated workers is paving the way.

Artificial intelligence requires semiconductors with powerful graphics processing units — chips that very few companies are able to make.