More EVs to qualify for tax credit following Treasury changes

BMO's 2022 audited annual consolidated financial statements and accompanying Management Discussion and Analysis (MD&A) are available online at www.bmo.com/investorrelations and at www.sedar.com. Financial Results Highlights Fourth Quarter 2022 Compared with Fourth Quarter 2021: Net income of $4,483 million, compared with $2,159 million; adjusted net income1,3,4 of $2,136 million, compared with $2,226 million Reported earnings per share (EPS)2 of $6.51, compared with $3.23; adjusted EPS1,2,3,4 of $3.04, compared with $3.33 Provision for credit losses (PCL) of $226 million, compared with a recovery of the provision for credit losses of $126 million Return on equity (ROE) of 27.6%, compared with 16.0%; adjusted ROE1,3,4 of 12.9%, compared with 16.5% Common Equity Tier 1 Ratio5 of 16.7%, compared with 13.7% Fiscal 2022 Compared with Fiscal 2021: Net income of $13,537 million, compared with $7,754 million; adjusted net income1,3,4 of $9,039 million, compared with $8,651 million Reported EPS2 of $19.99, compared with $11.58; adjusted EPS1,2,3,4 of $13.23, compared with $12.96 Provision for credit losses of $313 million, compared with a provision of $20 million ROE of 22.9%, compared with 14.9%; adjusted ROE1,3,4 of 15.2%, compared with 16.7% TORONTO, Dec. 1, 2022 /CNW/ - For the fourth quarter ended October 31, 2022, BMO Financial Group (TSX:BMO) (NYSE:BMO) recorded net income of $4,483 million or $6.51 per share on a reported basis, and net income of $2,136 million or $3.04 per share on an adjusted basis. "This year, we continued to execute on our strategy to strengthen and grow each of our diversified businesses. Against the backdrop of a rapidly changing macroeconomic environment, we delivered on our commitments to positive operating leverage, improved efficiency and achieved above-target return on equity. Our strong performance was supported by targeted investments in technology and talent which delivered award winning customer and employee experiences. Very good revenue performance was driven by robust, high-quality growth in loans and deposits and expanding net interest margins, all underpinned by our leading risk management approach," said Darryl White, Chief Executive Officer, BMO Financial Group. "Looking ahead to 2023, the economic environment remains uncertain, with inflation and higher interest rates expected to slow the economy in the near term. We have a proven track record of sustained performance and remain well positioned to deliver in any environment. We will continue to dynamically manage capital and resources to grow our businesses and support our customers while finalizing preparations for the natural next step in our North American growth strategy, the approval, closing and integration of Bank of the West. "BMO has a long-standing, deep sense of purpose, and we are leveraging our position as a leading financial services provider to make progress for a thriving economy, sustainable future and an inclusive society, while targeting continued top-tier returns for our shareholders," concluded Mr. White. Concurrent with the release of results, BMO announced a first quarter 2023 dividend of $1.43 per common share, an increase of $0.04 from the prior quarter, and an increase of $0.10 or 8% from the prior year. The quarterly dividend of $1.43 per common share is equivalent to an annual dividend of $5.72 per common share. Caution The foregoing sections contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements. (1) Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excluded the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed for all reported periods in the Non-GAAP and Other Financial Measures section. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms. (2) All EPS measures in this document refer to diluted EPS, unless specified otherwise. EPS is calculated using net income after deducting total dividends on preferred shares and distributions payable on other equity instruments. (3) Reported net income included revenue related to the announced acquisition of Bank of the West, with revenue in Q4-2022 of $3,336 million ($4,541 million pre-tax) resulting from the management of the impact of interest rate changes between the announcement and closing on its fair value and goodwill, as well as acquisition and integration costs of $143 million ($191 million pre-tax). Fiscal 2022 net income included revenue of $5,667 million ($7,713 million pre-tax) and expenses of $237 million ($316 million pre-tax). Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items. (4) Q4-2022 reported net income included a legal provision of $846 million ($1,142 million pre-tax) related to a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, comprising interest expense of $515 million pre-tax and non-interest expense of $627 million pre-tax, including legal fees of $22 million. These amounts were recorded in Corporate Services. For further information, refer to the Provisions and Contingent Liabilities section in Note 24 of the audited annual consolidated financial statements in BMO's 2022 Annual Report. (5) The Common Equity Tier 1 (CET1) Ratio is disclosed in accordance with the Office of the Superintendent of Financial Institutions' (OSFI's) Capital Adequacy Requirements (CAR) Guideline. Note: All ratios and percentage changes in this document are based on unrounded numbers.   Significant Events During the first quarter of 2022, we completed the sale of our EMEA Asset Management business to Ameriprise Financial, Inc., including the transfer of certain U.S. asset management clients, and on April 30, 2021, we completed the sale of our Private Banking business in Hong Kong and Singapore to J. Safra Sarasin Group. Collectively, we refer to these transactions as "divestitures". The divestitures reduced net revenue and expenses by approximately 3% and 4%, respectively, on both a reported and an adjusted basis, compared with the prior year. On December 20, 2021, we announced the signing of a definitive agreement with BNP Paribas to acquire Bank of the West and its subsidiaries. Under the terms of the agreement, we will pay a cash purchase price of US$16.3 billion, or US$13.4 billion net of an estimated US$2.9 billion of excess capital (at closing) at Bank of the West. The transaction, which is expected to close by the end of the first calendar quarter of 2023, is subject to customary closing conditions, including regulatory approvals. We expect to fund the transaction primarily with excess capital, reflecting our strong capital position, including the added impact of the 20,843,750 common shares issued for $3,106 million on March 29, 2022, and anticipated capital generation. On closing, the acquisition is expected to add approximately US$92 billion of assets, US$59 billion of loans and US$76 billion of deposits to our consolidated balance sheet. These amounts are based on the financial position and results of Bank of the West as at the period ended September 30, 2022. This acquisition aligns with our strategic, financial and cultural objectives, and meaningfully accelerates our U.S. growth. Building on the strength of our performance and our integrated North American foundation, the acquisition will bring nearly 1.8 million customers to BMO and will further extend our banking presence through an additional 503 branches and commercial and wealth offices in key U.S. markets. After closing, our footprint will expand to 32 states, including an immediate scaled entry into the attractive California market, where we expect to deliver a highly competitive offering to new growth markets, combining the strength of our digital banking platform and our strong banking team to generate good customer growth. A signature strength of Bank of the West is the deep relationships formed between its customers, its employees, and the communities they have served for over 100 years. As part of this transaction, we do not plan to close Bank of the West branches, and we are committed to retaining front-line Bank of the West branch employees. Leveraging our deep integration experience and proven track record in U.S. expansion, we remain confident that we can achieve annual pre-tax cost synergies of approximately US$670 million (C$860 million) through operational efficiencies across our combined businesses. Integration planning is underway and is being overseen by a dedicated joint integration management office. Under IFRS, the purchase price will be allocated to the identifiable assets and liabilities of Bank of the West at closing, on the basis of their relative fair values, with the difference recorded as goodwill. The fair value/par value differences, referred to as the fair value mark, will be amortized to income over the estimated life of an underlying asset (liability). Intangible assets identified, including the core deposit intangible related to non-maturity deposits, will be amortized over their estimated life. The fair value of fixed rate loans, securities and deposits is largely dependent on interest rates. If interest rates increase, the fair value of the acquired fixed rate assets (in particular, loans and securities) will decrease, resulting in higher goodwill. If interest rates decrease, the opposite would be true. Conversely, the fair value of floating rate assets (liabilities) and non-maturity deposits approximate par, providing no natural fair value change offset. Changes in goodwill relative to our original assumptions announced on December 20, 2021 will impact capital ratios at closing, because goodwill is treated as a deduction from capital under the Office of the Superintendent of Financial Institutions (OSFI) Basel III rules. In addition, given that the purchase price of the acquisition is in U.S. dollars, any change in foreign exchange translation between the Canadian dollar relative to the U.S. dollar between the announcement and the closing of the acquisition will result in a change to the Canadian dollar equivalent goodwill. We are proactively managing exposure to capital from changes in fair value of the assets and liabilities of Bank of the West at closing. As part of our fair value management actions, we entered into interest rate swaps that increase in value as interest rates rise, resulting in mark-to-market gains recorded in trading revenue. These swaps were largely offset from an interest rate risk perspective through the purchase of a portfolio of matched-duration U.S. treasuries and other balance sheet instruments that generate net interest income. Together, these transactions aim to mitigate the effects of any changes in goodwill arising from changes in interest rates between the announcement and closing of the acquisition, with the associated revenue (loss) treated as an adjusting item. In addition, BMO entered into forward contracts, which qualify as accounting hedges, to mitigate the effects of changes in the Canadian dollar equivalent of the purchase price on closing. Changes in the fair value of these forward contracts are recorded in other comprehensive income (OCI) until closing of the transaction. The impact of the fair value management actions on our results was treated as an adjusting item. The current quarter included $4,541 million pre-tax ($3,336 million after-tax) revenue related to the management of interest rate changes, comprising $4,698 million of mark-to-market gains on certain interest rate swaps as at October 31, 2022, recorded in non-interest revenue, as well as a loss of $157 million on a portfolio of primarily U.S. treasuries and other balance sheet instruments recorded in net interest income. Fiscal 2022 results included $7,713 million pre-tax ($5,667 million after-tax) revenue, comprising $7,665 million recorded in non-interest revenue and $48 million recorded in net interest income. The impact on our Common Equity Tier 1 Ratio related to these fair value management actions was approximately 95 basis points in the fourth quarter of 2022, and the cumulative impact was approximately 150 basis points in fiscal 2022. In addition, the changes in the fair value of the forward contracts increased OCI by $706 million in the current quarter and increased OCI by $638 million in the current year. This Significant Events section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements. Fourth Quarter 2022 Performance Review The order in which the impact on net income is discussed in this section follows the order of revenue, expenses and provision for credit losses, regardless of their relative impact. Adjusted results and ratios in this Fourth Quarter 2022 Performance Review section are on a non-GAAP basis and discussed in the Non-GAAP and Other Financial Measures section. Adjusted results in the current quarter excluded the impact of the announced acquisition of Bank of the West, comprising revenue of $3,336 million ($4,541 million pre-tax) related to the management of the impact of interest rate changes between the announcement and closing of the acquisition on its fair value and goodwill, as well as acquisition and integration costs of $143 million ($191 million pre-tax). In addition, current quarter adjusted results excluded the impact of a legal provision of $846 million ($1,142 million pre-tax) related to a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, comprising interest expense of $515 million pre-tax and non-interest expense of $627 million pre-tax, including legal fees of $22 million. For further information, refer to Note 24 of the audited annual consolidated financial statements in BMO's 2022 Annual Report. Adjusted net income also excluded the amortization of acquisition-related intangible assets and other acquisition and integration costs in both the current and the prior years. Reported net income increased from the prior year, primarily due to the impact of the above noted fair value management actions, and adjusted net income decreased 4%, with higher net revenue offset by higher expenses and a higher provision for credit losses. Net income increased in U.S. P&C and decreased in BMO Capital Markets, BMO Wealth Management, and Canadian P&C. On a reported basis, Corporate Services recorded net income compared with a net loss in the prior year, and on an adjusted basis, Corporate Services results were relatively unchanged. Canadian P&C Reported and adjusted net income was $917 million, a decrease of $16 million or 2% from the prior year. Results were driven by an 11% increase in revenue, primarily due to higher net interest income reflecting strong balance growth and higher net interest margins, more than offset by higher expenses and a higher provision for credit losses compared with a recovery in the prior year. U.S. P&C Reported net income was $660 million, an increase of $151 million or 30% from the prior year, and adjusted net income was $662 million, an increase of $147 million or 29%. The impact of the stronger U.S. dollar increased revenue and net income growth by 9%, and expense growth by 8% on a reported basis. On a U.S. dollar basis, reported net income was $488 million, an increase of $82 million or 21% from prior year, and adjusted net income was $489 million, an increase of $79 million or 19%. Reported and adjusted results were driven by an 18% increase in revenue, primarily due to higher net interest income reflecting higher net interest margins and loan balances, partially offset by higher expenses and a higher provision for credit losses compared with a recovery in the prior year. BMO Wealth Management Reported net income was $298 million, compared with $345 million in the prior year, and adjusted net income was $298 million, a decrease of $51 million or 14% from the prior year. Wealth and Asset Management (1) reported net income was $221 million, a decrease of $66 million or 24% from the prior year, primarily due to higher underlying expenses from continued investments in the business and divestitures. Insurance net income was $77 million, an increase of $19 million from the prior year, primarily due to benefits from changes in investments to improve asset liability management. BMO Capital Markets Reported net income was $357 million, a decrease of $174 million or 33% from the prior year, and adjusted net income was $363 million, a decrease of $173 million or 33% . Reported and adjusted results were impacted by current market conditions, resulting in lower Investment and Corporate Banking revenue, partially offset by higher Global Markets revenue, higher expenses, and a lower recovery of the provision for credit losses compared with the prior year. Corporate Services Reported net income was $2,251 million, compared with a reported net loss of $159 million in the prior year, and adjusted net loss was $104 million, compared with an adjusted net loss of $107 million. Reported results increased, primarily due to higher revenue reflecting the fair value management actions, partially offset by the legal provision noted above. Adjusted results were relatively unchanged from the prior year. Capital BMO's Common Equity Tier 1 Ratio was 16.7% as at October 31, 2022, an increase from 15.8% at the end of the third quarter of 2022, primarily driven by the benefit from fair value management actions related to the announced acquisition of Bank of the West, internal capital generation and common shares issued from treasury under the shareholder dividend reinvestment and share purchase plan, which were partially offset by the legal provision noted above and higher risk-weighted assets. (1)   Wealth and Asset Management was previously known as Traditional Wealth. Credit Quality Total provision for credit losses was $226 million, compared with a recovery of the provision for credit losses of $126 million in the prior year. The provision for credit losses on impaired loans was $192 million, an increase of $108 million from the prior year. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances ratio was 14 basis points, compared with 7 basis points in the prior year. There was a $34 million provision for credit losses on performing loans in the current quarter, compared with a $210 million recovery in the prior year. The $34 million provision for credit losses on performing loans in the current quarter reflected a deteriorating economic outlook and balance growth, largely offset by continued reduction in uncertainty as a result of the improving pandemic environment and portfolio credit improvement. The $210 million recovery of credit losses in the prior year largely reflected an improving economic outlook and portfolio credit improvement, partially offset by growth in loan balances. Refer to the Critical Accounting Estimates and Judgments section of BMO's 2022 Annual Report and Note 4 of our audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2022. Caution The foregoing sections contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements. Regulatory Filings BMO's continuous disclosure materials, including interim filings, annual Management's Discussion and Analysis and audited annual consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular, are available on our website at www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at www.sedar.com, and on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov. Information contained in or otherwise accessible through our website (www.bmo.com), or any third party websites mentioned herein, does not form part of this document. Bank of Montreal uses a unified branding approach that links all of the organization's member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. In this document, the names BMO and BMO Financial Group, as well as the words "bank", "we" and "our", mean Bank of Montreal, together with its subsidiaries.   Financial Review Management's Discussion and Analysis (MD&A) commentary is as at December 1, 2022. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2022, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2022, and the MD&A for fiscal 2022, contained in BMO's 2022 Annual Report. BMO's 2022 Annual Report includes a comprehensive discussion of its businesses, strategies and objectives, and can be accessed on our website at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information. Bank of Montreal's management, under the supervision of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness, as at October 31, 2022, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended October 31, 2022, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. As in prior quarters, Bank of Montreal's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release. Caution Regarding Forward-Looking Statements Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to our objectives and priorities for fiscal 2023 and beyond, our strategies or future actions, our targets and commitments (including with respect to net zero emissions), expectations for our financial condition, capital position or share price, the regulatory environment in which we operate, the results of, or outlook for, our operations or for the Canadian, U.S. and international economies, the closing of our proposed acquisition of Bank of the West, including plans for the combined operations of BMO and Bank of the West and the financial, operational and capital impacts of the transaction, and include statements made by our management. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "goal", "commit", "target", "may", "might", "schedule", "forecast", "outlook", "timeline", "suggest", "seek" and "could" or negative or grammatical variations thereof. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: general economic and market conditions in the countries in which we operate, including labour challenges; the severity, duration and spread of the COVID-19 pandemic, and possibly other outbreaks of disease or illness, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; information, privacy and cybersecurity, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; benchmark interest rate reforms; technological changes and technology resiliency; political conditions, including changes relating to, or affecting, economic or trade matters; climate change and other environmental and social risk; the Canadian housing market and consumer leverage; inflationary pressures; global supply-chain disruptions; changes in monetary, fiscal, or economic policy; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; failure of third parties to comply with their obligations to us; our ability to execute our strategic plans, complete proposed acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals; critical accounting estimates and judgments, and the effects of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; the possibility that our proposed acquisitions, including our acquisition of Bank of the West, do not close when expected, or at all, because required regulatory approvals and other conditions to closing are not received or satisfied on a timely basis, or at all, or are received subject to adverse conditions or requirements; the anticipated benefits from proposed acquisitions, including Bank of the West, such as potential synergies and operational efficiencies, are not realized; our ability to manage exposure to capital arising from changes in fair value of assets and liabilities between signing and closing; our ability to perform effective fair value management actions and unforeseen consequences arising from such actions; changes to our credit ratings; global capital markets activities; the possible effects on our business of war or terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors. We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section of BMO's 2022 Annual Report, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes. Material economic assumptions underlying the forward-looking statements contained in this document include those set out in the Economic Developments and Outlook section of BMO's 2022 Annual Report, as well as in the Allowance for Credit Losses section of BMO's 2022 Annual Report. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. Assumptions about Bank of the West's balance sheet, product mix and margins, and interest rate sensitivity were material factors we considered in estimating the fair value and goodwill and intangibles amounts at closing, and assumptions about our integration plan, the efficiency and duration of integration and the alignment of organizational responsibilities were material factors we considered in estimating pre-tax cost synergies. In determining our expectations for economic growth, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy. Financial Highlights (Canadian $ in millions, except as noted) Q4-2022 Q3-2022 Q4-2021 Fiscal 2022 Fiscal 2021 Summary Income Statement (1) Net interest income 3,767 4,197 3,756 15,885 14,310 Non-interest revenue 6,803 1,902 2,817 17,825 12,876 Revenue 10,570 6,099 6,573 33,710 27,186 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (369) 413 97 (683) 1,399 Revenue, net of CCPB (2) 10,939 5,686 6,476 34,393 25,787 Provision for credit losses on impaired loans 192 104 84 502 525 Provision for (recovery of) credit losses on performing loans 34 32 (210) (189) (505) Total provision for (recovery of) credit losses 226 136 (126) 313 20 Non-interest expense 4,776 3,859 3,803 16,194 15,509 Provision for income taxes 1,454 326 640 4,349 2,504 Net income 4,483 1,365 2,159 13,537 7,754 Adjusted net income 2,136 2,132 2,226 9,039 8,651 Common Share Data ($, except as noted) (1) Basic earnings per share 6.52 1.96 3.24 20.04 11.60 Diluted earnings per share 6.51 1.95 3.23 19.99 11.58 Adjusted diluted earnings per share 3.04 3.09 3.33 13.23 12.96 Dividends declared per share 1.39 1.39 1.06 5.44 4.24 Book value per share 95.60 90.88 80.18 95.60 80.18 Closing share price 125.49 127.66 134.37 125.49 134.37 Number of common shares outstanding (in millions) End of period 677.1 674.4 648.1 677.1 648.1 Average basic 676.1 673.3 648.2 664.0 647.2 Average diluted 677.5 674.8 650.1 665.7 648.7 Market capitalization ($ billions) 85.0 86.1 87.1 85.0 87.1 Dividend yield (%) 4.4 4.4 3.2 4.3 3.2 Dividend payout ratio (%) 21.3 71.1 32.7 27.1 36.5 Adjusted dividend payout ratio (%) 45.6 44.9 31.7 41.0 32.6 Financial Measures and Ratios (%) (1) Return on equity 27.6 8.8 16.0 22.9 14.9 Adjusted return on equity 12.9 13.8 16.5 15.2 16.7 Return on tangible common equity 30.1 9.6 18.0 25.1 17.0 Adjusted return on tangible common equity 14.0 15.1 18.5 16.6 18.9 Efficiency ratio 45.2 63.3 57.9 48.0 57.0 Efficiency ratio, net of CCPB (2) 43.7 67.9 58.7 47.1 60.1 Adjusted efficiency ratio, net of CCPB (2) 57.2 56.7 57.4 55.8 56.5 Operating leverage 35.3 (24.2) 2.6 19.6 (1.5) Operating leverage, net of CCPB (2) 43.3 (18.4) 1.0 29.0 0.4 Adjusted operating leverage, net of CCPB (2) 0.4 (1.9) 2.4 1.3 6.1 Net interest margin on average earning assets 1.46 1.71 1.62 1.62 1.59 Effective tax rate 24.5 19.3 22.9 24.3 24.4 Adjusted effective tax rate 21.8 22.0 22.7 22.8 22.7 Total PCL-to-average net loans and acceptances 0.16 0.10 (0.11) 0.06 - PCL on impaired loans-to-average net loans and acceptances 0.14 0.08 0.07 0.10 0.11 Liquidity coverage ratio (LCR) (3) 135 129 125 135 125 Net stable funding ratio (NSFR) (3) 114 114 118 114 118 Balance Sheet and other information  (as at, $ millions, except as noted) Assets 1,139,199 1,068,338 988,175 1,139,199 988,175 Average earning assets 1,021,540 972,879 918,255 979,341 897,302 Gross loans and acceptances 567,191 537,829 474,847 567,191 474,847 Net loans and acceptances 564,574 535,417 472,283 564,574 472,283 Deposits 769,478 729,385 685,631 769,478 685,631 Common shareholders' equity 64,730 61,286 51,965 64,730 51,965 Total risk weighted assets (4) 363,997 351,711 325,433 363,997 325,433 Assets under administration 744,442 711,508 634,713 744,442 634,713 Assets under management 305,462 310,469 523,270 305,462 523,270 Capital ratios (%) (4) Common Equity Tier 1  Ratio 16.7 15.8 13.7 16.7 13.7 Tier 1 Capital Ratio 18.4 17.3 15.4 18.4 15.4 Total Capital Ratio 20.7 19.4 17.6 20.7 17.6 Leverage Ratio 5.6 5.3 5.1 5.6 5.1 Foreign Exchange Rates ($) As at Canadian/U.S. dollar 1.3625 1.2813 1.2376 1.3625 1.2376 Average Canadian/U.S. dollar 1.3516 1.2774 1.2546 1.2918 1.2554 (1) Adjusted results remove certain items from reported results and are used to calculate our adjusted measures as presented in the above table. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. Revenue, net of CCPB, as well as reported ratios calculated net of CCPB and adjusted results, measures and ratios in this table are non-GAAP. For further information, refer to the Non-GAAP and Other Financial Measures section, and for details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms. (2) We present revenue, efficiency ratio and operating leverage on a basis that is net of CCPB, which reduces the variability in insurance revenue from changes in fair value that are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. For further information, refer to the Insurance Claims, Commissions and Changes in Policy Benefits section. (3) LCR and NSFR are disclosed in accordance with the Office of the Superintendent of Financial Institutions' (OSFI's) Liquidity Adequacy Requirements (LAR) Guideline, as applicable. (4) Capital ratios and risk-weighted assets are disclosed in accordance with OSFI's Capital Adequacy Requirements (CAR) Guideline, as applicable.   Non-GAAP and Other Financial Measures Results and measures in this document are presented on a GAAP basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non‑GAAP basis, as described below. We believe that these non‑GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results. Non-GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results. For further information regarding the composition of non-GAAP and other financial measures, including supplementary financial measures, refer to the Glossary of Financial Terms. Our non-GAAP measures broadly fall into the following categories: Adjusted measures and ratios Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expense and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non-GAAP. Presenting results on both a reported basis and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing business performance. As such, the presentation may facilitate readers' analysis of trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results. Measures net of insurance claims, commissions and changes in policy benefit liabilities (CCPB) We also present reported and adjusted revenue on a basis that is net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), and our efficiency ratio and operating leverage are calculated on a similar basis, as reconciled in the Revenue section. Measures and ratios presented on a basis net of CCPB are non-GAAP. Insurance revenue can experience variability arising from fluctuations in the fair value of insurance assets, caused by movements in interest rates and equity markets. The investments that support policy benefit liabilities are predominantly fixed income assets recorded at fair value, with changes in fair value recorded in insurance revenue in the Consolidated Statement of Income. These fair value changes are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. The presentation and discussion of revenue, efficiency ratios and operating leverage on a net basis reduces this variability, which allows for a better assessment of operating results. For more information refer to the Insurance Claims, Commissions and Changes in Policy Benefit Liabilities section. Presenting results on a taxable equivalent basis (teb) We analyze consolidated revenue on a reported basis. In addition, we analyze revenue on a taxable equivalent basis (teb) at the operating group level, consistent with our Canadian peer group. Revenue and the provision for income taxes in BMO Capital Markets and U.S. P&C are increased on tax-exempt securities to an equivalent pre-tax basis. These adjustments are offset in Corporate Services. Presenting results on a teb basis reflects how our operating groups manage their business and is useful facilitating comparisons of income between taxable and tax-exempt sources. The effective tax rate is also analyzed on a teb basis for consistency of approach, with the offset to operating segment adjustments recorded in Corporate Services. Tangible common equity and return on tangible common equity Tangible common equity is calculated as common shareholders' equity less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity is commonly used in the North American banking industry and is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed organically. Non-GAAP and Other Financial Measures (Canadian $ in millions, except as noted) Q4-2022 Q3-2022 Q4-2021 Fiscal 2022 Fiscal 2021 Reported Results Net interest income 3,767 4,197 3,756 15,885 14,310 Non-interest revenue 6,803 1,902 2,817 17,825 12,876 Revenue 10,570 6,099 6,573 33,710 27,186 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) 369 (413) (97) 683 (1,399) Revenue, net of CCPB 10,939 5,686 6,476 34,393 25,787 Provision for credit losses (226) (136) 126 (313) (20) Non-interest expense (4,776) (3,859) (3,803) (16,194) (15,509) Income before income taxes 5,937 1,691 2,799 17,886 10,258 Provision for income taxes (1,454) (326) (640) (4,349) (2,504) Net income 4,483 1,365 2,159 13,537 7,754 Diluted EPS ($) 6.51 1.95 3.23 19.99 11.58 Adjusting Items Impacting Revenue (Pre-tax) Impact of divestitures (1) - - - (21) 29 Management of fair value changes on the purchase of Bank of the West (2) 4,541 (945) - 7,713 - Legal provision (3) (515) - - (515) - Impact of adjusting items on revenue (pre-tax) 4,026 (945) - 7,177 29 Adjusting Items Impacting Non-Interest Expense (Pre-tax) Acquisition and integration costs (4) (193) (84) (1) (326) (9) Amortization of acquisition-related intangible assets (5) (8) (7) (20) (31) (88) Impact of divestitures (1) 6 (7) (62) (16) (886) Restructuring (costs) reversals (6) - - - - 24 Legal provision (3) (627) - - (627) - Impact of adjusting items on non-interest expense (pre-tax) (822) (98) (83) (1,000) (959) Impact of adjusting items on reported pre-tax income 3,204 (1,043) (83) 6,177 (930) Adjusting Items Impacting Revenue (After tax) Impact of divestitures (1) - - - (23) 22 Management of fair value changes on the purchase of Bank of the West (2) 3,336 (694) - 5,667 - Legal provision (3) (382) - - (382) - Impact of adjusting items on revenue (after-tax) 2,954 (694) - 5,262 22 Adjusting Items Impacting Non-Interest Expense (After-tax) Acquisition and integration costs (4) (145) (62) (1) (245) (7) Amortization of acquisition-related intangible assets (5) (6) (5) (14) (23) (66) Impact of divestitures (1) 8 (6) (52) (32) (864) Restructuring (costs) reversals (6) - - - - 18 Legal provision (3) (464) - - (464) - Impact of adjusting items on non-interest expense (after-tax) (607) (73) (67) (764) (919) Impact of adjusting items on reported net income (after-tax) 2,347 (767) (67) 4,498 (897) Impact on diluted EPS ($) 3.47 (1.14) (0.10) 6.76 (1.38) Adjusted Results Net interest income 4,439 4,159 3,756 16,352 14,310 Non-interest revenue 2,105 2,885 2,817 10,181 12,847 Revenue 6,544 7,044 6,573 26,533 27,157 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) 369 (413) (97) 683 (1,399) Revenue, net of CCPB 6,913 6,631 6,476 27,216 25,758 Provision for credit losses (226) (136) 126 (313) (20) Non-interest expense (3,954) (3,761) (3,720) (15,194) (14,550) Income before income taxes 2,733 2,734 2,882 11,709 11,188 Provision for income taxes (597) (602) (656) (2,670) (2,537) Net income 2,136 2,132 2,226 9,039 8,651 Diluted EPS ($) 3.04 3.09 3.33 13.23 12.96 (1) Reported net income included the impact of divestitures related to the sale of our EMEA Asset Management business and our Private Banking business in Hong Kong and Singapore. Q4-2022 net income included an expense recovery of $8 million ($6 million pre-tax). Q3-2022 included expenses of $6 million ($7 million pre-tax). Q2-2022 included a gain of $6 million ($8 million pre-tax) related to the transfer of certain U.S. asset management clients recorded in revenue, and expenses of $15 million ($18 million pre-tax), both related to the sale of our EMEA Asset Management business. Q1-2022 included a $29 million (pre-tax and after-tax) loss related to foreign currency translation reclassified from accumulated other comprehensive income to non-interest revenue, a $3 million pre-tax net recovery of non-interest expense, including taxes of $22 million on closing of the sale of our EMEA Asset Management business. Q4-2021 included expenses of $52 million ($62 million pre-tax) related to both transactions. Q3-2021 included expenses of $18 million ($24 million pre-tax). Q2-2021 included a $747 million (pre-tax and after-tax) write-down of goodwill related to the sale of our EMEA Asset Management business, a $22 million ($29 million pre-tax) gain on the sale of our Private Banking business, and $47 million ($53 million pre-tax) of divestiture-related costs for both transactions. The gain on the sale was recorded in revenue with the goodwill write-down and divestiture costs recorded in non-interest expense. These amounts were recorded in Corporate Services. (2) Reported net income included revenue (losses) related to the announced acquisition of Bank of the West resulting from the management of the impact of interest rate changes between the announcement and closing on its fair value and goodwill: Q4-2022 included revenue of $3,336 million ($4,541 million pre-tax), comprising $4,698 million of pre-tax mark-to-market gains on certain interest rate swaps recorded in non-interest trading revenue, as well as a loss of $157 million pre-tax on a portfolio of primarily U.S. treasury securities and balance sheet instruments recorded in net interest income. Q3-2022 included a loss of $694 million ($945 million pre-tax), comprising $983 million of pre-tax mark-to-market losses and $38 million of pre-tax interest income. Q2-2022 included revenue of $2,612 million ($3,555 million pre-tax), comprising $3,433 million of pre-tax mark-to-market gains and $122 million of pre-tax interest income. Q1-2022 included revenue of $413 million ($562 million pre-tax), comprising $517 million of pre-tax mark-to-market gains and $45 million of pre-tax interest income. These amounts were recorded in Corporate Services. For further information on this acquisition, refer to the Significant Events section. (3) Q4-2022 reported net income included a legal provision of $846 million ($1,142 million pre-tax) related to a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, comprising interest expense of $515 million pre-tax and non-interest expense of $627 million pre-tax, including legal fees of $22 million. These amounts were recorded in Corporate Services. For further information, refer to the Provisions and Contingent Liabilities section in Note 24 of the audited annual consolidated financial statements in BMO's 2022 Annual Report. (4) Reported net income included acquisition and integration costs related to the announced acquisition of Bank of the West recorded in non-interest expenses in Corporate Services. Q4-2022 included $143 million ($191 million pre-tax), Q3-2022 included $61 million ($82 million pre-tax), Q2-2022 included $26 million ($35 million pre-tax) and Q1-2022 included $7 million ($8 million pre-tax). Reported net income included acquisition and integration costs related to Clearpool in Q4-2022, Q3-2022, Q2-2022 and Q1-2022; and acquisition and integration costs related to both KGS-Alpha and Clearpool in Q4-2021, Q3-2021, Q2-2021 and Q1-2021, recorded in non-interest expense in BMO Capital Markets. Acquisition and integration costs were $2 million ($2 million pre-tax) in Q4-2022, $1 million ($2 million pre-tax) in Q3-2022, $2 million ($2 million pre-tax) in Q2-2022, and $3 million ($4 million pre-tax) in Q1-2022. Q4-2021 was $1 million ($1 million pre-tax), Q3-2021 was $2 million ($3 million pre-tax), Q2-2021 was $2 million ($2 million pre-tax) and Q1-2021 was $2 million ($3 million pre-tax). (5) Reported income included amortization of acquisition-related intangible assets recorded in non-interest expense in the related operating group and was $6 million ($8 million pre-tax) in Q4-2022, $5 million ($7 million pre-tax) in Q3-2022, and was $6 million ($8 million pre-tax) in both Q2-2022 and Q1-2022. Q4-2021 was $14 million ($20 million pre-tax), Q3-2021 was $15 million ($19 million pre-tax), Q2-2021 was $18 million ($24 million pre-tax) and Q1-2021 was $19 million ($25 million pre-tax). (6) Q3-2021 reported net income included a partial reversal of $18 million ($24 million pre-tax) of restructuring charges related to severance recorded in 2019, in non-interest expense in Corporate Services.   Summary of Reported and Adjusted Results by Operating Group BMO Wealth BMO Capital Corporate U.S. Segment (1) (Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C Management Markets Services Total Bank (US $ in millions) Q4-2022 Reported net income (loss) 917 660 1,577 298 357 2,251 4,483 2,306 Acquisition and integration costs - - - - 2 143 145 106 Amortization of acquisition-related intangible assets - 2 2 - 4 - 6 4 Impact of divestitures - - - - - (8) (8) (3) Management of fair value changes on the purchase of      Bank of the West - - - - - (3,336) (3,336) (2,470) Legal provision - - - - - 846 846 621 Adjusted net income (loss) 917 662 1,579 298 363 (104) 2,136 564 Q3-2022 Reported net income (loss) 965 568 1,533 324 262 (754) 1,365 (28) Acquisition and integration costs - - - - 1 61 62 49 Amortization of acquisition-related intangible assets - 1 1 1 3 - 5 5 Impact of divestitures - - - - - 6 6 - Management of fair value changes on the purchase of      Bank of the West - - - - - 694 694 545 Adjusted net income (loss) 965 569 1,534 325 266 7 2,132 571 Q4-2021 Reported net income (loss) 933 509 1,442 345 531 (159) 2,159 618 Acquisition and integration costs - - - - 1 - 1 2 Amortization of acquisition-related intangible assets - 6 6 4 4 - 14 9 Impact of divestitures - - - - - 52 52 4 Adjusted net income (loss) 933 515 1,448 349 536 (107) 2,226 633 Fiscal 2022 Reported net income (loss) 3,826 2,497 6,323 1,251 1,772 4,191 13,537 6,079 Acquisition and integration costs - - - - 8 237 245 185 Amortization of acquisition-related intangible assets 1 5 6 3 14 - 23 17 Impact of divestitures - - - - - 55 55 (45) Management of fair value changes on the purchase of      Bank of the West - - - - - (5,667) (5,667) (4,312) Legal provision - - - - - 846 846 621 Adjusted net income (loss) 3,827 2,502 6,329 1,254 1,794 (338) 9,039 2,545 Fiscal 2021 Reported net income (loss) 3,288 2,176 5,464 1,382 2,120 (1,212) 7,754 2,593 Acquisition and integration costs - - - - 7 - 7 6 Amortization of acquisition-related intangible assets 1 24 25 24 17 - 66 37 Impact of divestitures - - - - - 842 842 27 Restructuring costs (reversals) - - - - - (18) (18) (13) Adjusted net income (loss) 3,289 2,200 5,489 1,406 2,144 (388) 8,651 2,650 (1)   U.S. segment reported and adjusted results comprise net income recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services. Refer to footnotes (1) to (6) in the Non-GAAP and Other Financial Measures table for details on adjusting items. Certain comparative figures have been reclassified to conform with the current year's presentation.   Net Revenue, Efficiency and Operating Leverage (Canadian $ in millions, except as noted) Q4-2022 Q3-2022 Q4-2021 Fiscal 2022 Fiscal 2021 Reported Revenue 10,570 6,099 6,573 33,710 27,186 CCPB (369) 413 97 (683) 1,399 Revenue, net of CCPB 10,939 5,686 6,476 34,393 25,787 Non-interest expense 4,776 3,859 3,803 16,194 15,509 Efficiency ratio (%) 45.2 63.3 57.9 48.0 57.0 Efficiency ratio, net of CCPB (%) 43.7 67.9 58.7 47.1 60.1 Revenue growth (%) 60.9 (19.4) 9.8 24.0 7.9 Revenue growth, net of CCPB (%) 68.9 (13.6) 8.2 33.4 9.8 Non-interest expense growth (%) 25.6 4.8 7.2 4.4 9.4 Operating Leverage (%) 35.3 (24.2) 2.6 19.6 (1.5) Operating Leverage, net of CCPB (%) 43.3 (18.4) 1.0 29.0 0.4 Adjusted (1) Revenue 6,544 7,044 6,573 26,533 27,157 Impact of adjusting items on revenue (4,026) 945 - (7,177) (29) CCPB (369) 413 97 (683) 1,399 Revenue, net of CCPB 6,913 6,631 6,476 27,216 25,758 Impact of adjusting items on non-interest expense (822) (98) (83) (1,000) (959) Non-interest expense 3,954 3,761 3,720 15,194 14,550 Efficiency ratio (%) 60.4 53.4 56.6 57.3 53.6 Efficiency ratio, net of CCPB (%) 57.2 56.7 57.4 55.8 56.5 Revenue growth, net of CCPB (%) 6.7 0.8 8.2 5.7 9.7 Non-interest expense growth (%) 6.3 2.7 5.8 4.4 3.6 Operating Leverage, net of CCPB (%) 0.4 (1.9) 2.4 1.3 6.1 (1) Refer to footnotes (1) to (6) in the Non-GAAP and Other Financial Measures table for details on adjusting items.   Return on Equity and Return on Tangible Common Equity (Canadian $ in millions, except as noted) Q4-2022 Q3-2022 Q4-2021 Fiscal 2022 Fiscal 2021 Reported net income 4,483 1,365 2,159 13,537 7,754 Dividends on preferred shares and distributions on other equity instruments (77) (47) (59) (231) (244) Net income available to common shareholders (A) 4,406 1,318 2,100 13,306 7,510 After-tax amortization of acquisition-related intangible assets 6 5 14 23 66 Net income available to common shareholders after adjusting for amortization of  acquisition-related intangible assets (B) 4,412 1,323 2,114 13,329 7,576 After-tax impact of other adjusting items (1) (2,353) 762 53 (4,521) 831 Adjusted net income available to common shareholders (C) 2,059 2,085 2,167 8,808 8,407 Average common shareholders' equity (D) 63,343 59,707 52,113 58,078 50,451 Return on equity (%) (= A/D) (3) 27.6 8.8 16.0 22.9 14.9 Adjusted return on equity (%) (= C/D) (3) 12.9 13.8 16.5 15.2 16.7 Average tangible common equity (E) (2) 58,224 54,846 46,580 53,148 44,505 Return on tangible common equity (%) (= B/E) (3) 30.1 9.6 18.0 25.1 17.0 Adjusted return on tangible common equity (%) (= C/E) (3) 14.0 15.1 18.5 16.6 18.9 (1) Refer to footnotes (1) to (6) in the Non-GAAP and Other Financial Measures table for details on adjusting items. (2) Average tangible common equity is average common shareholders' equity (D above) adjusted for goodwill of $5,247 million in Q4-2022, $4,981 million in Q3-2022, and $5,455 million in Q4-2021; $5,051 million in fiscal 2022 and $5,836 million in fiscal 2021. Acquisition-related intangible assets of $124 million in Q4-2022, $126 million in Q3-2022, and $349 million in Q4-2021; $130 million in fiscal 2022 and $381 million in fiscal 2021. Net of related deferred tax liabilities of $252 million in Q4-2022, $246 million in Q3-2022, and $271 million in Q4-2021; $251 million in fiscal 2022 and $271 million in fiscal 2021. (3) Quarterly calculations are on an annualized basis.   Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities. Unallocated capital is reported in Corporate Services. Capital allocation methodologies are reviewed annually. Return on Equity by Operating Segment Q4-2022 BMO Wealth BMO Capital Corporate (Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C Management Markets  Services Total Bank Reported Net income available to common shareholders 906 650 1,556 296 346 2,208 4,406 Total average common equity 12,231 14,381 26,612 5,400 12,190 19,141 63,343 Return on equity (%) 29.4 17.9 23.2 21.7 11.3 na 27.6 Adjusted (1) Net income available to common shareholders 906 652 1,558 296 352 (147) 2,059 Total average common equity 12,231 14,381 26,612 5,400 12,190 19,141 63,343 Return on equity (%) 29.4 18.0 23.2 21.8 11.4 na 12.9   Q3-2022 BMO Wealth BMO Capital Corporate (Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C Management Markets  Services Total Bank Reported Net income available to common shareholders 955 561 1,516 322 252 (772) 1,318 Total average common equity 11,842 13,460 25,302 5,257 11,786 17,362 59,707 Return on equity (%) 32.0 16.5 23.8 24.3 8.5 na 8.8 Adjusted (1) Net income available to common shareholders 955 562 1,517 323 256 (11) 2,085 Total average common equity 11,842 13,460 25,302 5,257 11,786 17,362 59,707 Return on equity (%) 32.0 16.6 23.8 24.4 8.7 na 13.8   Q4-2021 BMO Wealth BMO Capital Corporate (Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C Management Markets  Services Total Bank Reported Net income available to common shareholders 922 499 1,421 343 522 (186) 2,100 Total average common equity 11,162 13,391 24,553 5,640 10,782 11,138 52,113 Return on equity (%) 32.8 14.8.....»»

U.S. lawmakers are on the cusp of adopting the most far-reaching affordable housing legislation the nation has seen in decades. Expanded tax credits under a pending budget agreement could pave the way to creating thousands of additional rental units for households with low and median incomes, helping to address a housing supply gap that has […] U.S. lawmakers are on the cusp of adopting the most far-reaching affordable housing legislation the nation has seen in decades. Expanded tax credits under a pending budget agreement could pave the way to creating thousands of additional rental units for households with low and median incomes, helping to address a housing supply gap that has dashed hopes and opportunities for a large and growing segment of the population. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Affordable housing initiatives expected to soon become law along with the 2022 federal budget range from an expansion of low-income housing tax credit (LIHTC) allocations to states to the creation of several new tax credits to incentivize development and rehabilitation of affordable housing in a wider range of product types and income levels. Those could include a middle-income housing tax credit to promote affordable rentals for families with incomes closer to their local median but who struggle to afford median rents. A neighborhood homes tax credit would target development and rehabilitation of affordable single-family homes. Existing tax credits for preserving historic structures, investments in new markets and for renewable and clean energy may also expand. Discussion of these much-needed improvements to community development and housing programs has been overshadowed in the news by recent coverage of delayed votes and ongoing intraparty negotiations on a $1.2 trillion infrastructure bill and a social spending measure that has yet to be finalized. On Oct. 1, President Biden urged Democrats to scale back the reconciliation plan, which would include boost to affordable housing, from $3.5 trillion to about $2 trillion to gain support for its passage from the party's moderate members. On its surface, the ongoing drama on Capitol Hill could appear discouraging for proponents of housing reform, who in recent years have seen promising efforts to expand the LIHTC and other programs fail to reach decisive votes. The good news is that many of those earlier provisions influenced the budget reconciliation legislation still under discussion, and both the White House and the majority Democratic Party have made passage of the social spending package a priority. What is more, the current debate is focused on spending, while the federal approach to promoting affordable housing is chiefly through tax credits rather than an allocation from the treasury. Factor in strong bipartisan support for addressing housing affordability, and the housing and community development initiatives currently on the table have excellent prospects to take effect with a 2022 budget accord. These improvements could collectively channel billions of dollars to the creation of affordable housing. It could not come at a time of greater need. Affordability Grows More Elusive For decades, the United States has struggled to bring safe residential rental units within the financial reach of low-income households. Despite limited success since the LIHTC's introduction in 1986, affordability remains elusive for a growing segment of the population. Ideally, a household should spend no more than 30 percent of its income on housing. The White House estimates that before the pandemic, 11 million families or nearly a quarter of U.S. renters paid more than half their income on rent. The ability to lease a home is down 29 percent from a peak in 2001, according to the HUD Rental Affordability Index. In the first quarter of this year the index reached a new low of 99.7. That is a heartbreaking milestone, because any value below 100 on the index means a renter household with median income will not qualify for median-priced rent. The lack of available housing affects not only the jobless but also the working class. In many cities, median apartment rents strain the resources of full-time wage earners including service industry workers, skilled laborers and even civil servants.  Rising costs for land, materials and construction have simply made it financially infeasible to develop multifamily product that is affordable to working-class families without some form of incentives to mitigate development costs. Turning The Tide While authors of the reconciliation legislation have not yet published a draft, the plan is expected to draw housing priorities from recent proposals including the Biden administration's Build Back Better Agenda, the Affordable Housing Credit Improvement Act of 2021, and three bills submitted in July by Rep. Maxine Waters, a California Democrat who chairs the House Financial Services Committee. Another bill, the Decent, Affordable, Safe Housing for All Act (DASH), was introduced in September by Sen. Ron Wyden, D-Oregon, who chairs the Senate Finance Committee. These measures vary in their approaches, but all reflect a sense of urgency and the conviction that the nation must do more to address increasing homelessness and an intensifying crisis in the availability and affordability of housing. And they provide concrete steps to make a greater impact on these pressing issues. Authors of the Affordable Housing Credit Improvement Act, for example, estimate their plan would generate 2 million new affordable housing units over the next decade. By way of comparison, the LIHTC program currently produces a little more than 100,000 low-income units per year. Currently the LIHTC program produces a little more than 100,000 low-income housing units per year, and those units serve households making at or below 50 percent or 60 percent of local median income. Sweeping changes are likely under reconciliation legislation for the Fiscal 2022 budget, however. Because both congressional houses have approved a budget resolution, lawmakers will be able to include these or other housing objectives along with other provisions as they reconcile the House and Senate versions. The LIHTC program has historically enjoyed strong bipartisan support as a way to stimulate community investment without direct federal funding, so its proposed expansion is unlikely to draw opposition. Whatever the housing initiatives ultimately adopted along with reconciliation legislation, new and expanding programs will translate into additional private and institutional capital flowing into communities. As they meet urgent needs for housing, projects made possible through tax credits will also create jobs and opportunities associated with the development, design, finance, construction, and management of affordable residential properties. Developers may find that obtaining development approvals for affordable housing becomes easier when they can target a wider variety of income levels. Real estate developers and investment funds will have more freedom to build tax-credit housing portfolios that appeal to a variety of investors, increasing the geographic diversity of properties within markets. The new investment vehicles that emerge to propel affordable housing initiatives will likely find an attentive and growing investor base. Given the Biden administration's efforts to increase taxation of capital gains and limit tax-deferred exchanges under Section 1031 of the IRS code, many individuals and institutions looking for ways to reduce their tax exposure may gravitate to tax-credit bonds. What is certain is that housing affordability is a formidable national challenge that supersedes partisanship, and the expected changes to the LIHTC program have the potential to bring tangible improvements for American households. The finance and real estate industries should prepare now for the crucial roles they will play in supporting and carrying out this noble effort. Article By Robert Walton, Managing Director of Credit and Asset Management, Trimont About the Author Robert Walton is Managing Director of Credit and Asset Managing at Trimont Real Estate Advisors, a globally integrated loan servicer and credit manager to the commercial real estate finance industry. Updated on Dec 27, 2021, 2:43 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

The Upshots Of The New Housing Bubble Fiasco Authored by MN Gordon via EconomicPrism.com, “The free market for all intents and purposes is dead in America.” - Senator Jim Bunning, September 19, 2008 House Prices Go Vertical The epic housing bubble and bust in the mid-to-late-2000s was dreadfully disruptive for many Americans.  Some never recovered.  Now the central planners have done it again… On Tuesday, the Federal Housing Finance Agency (FHFA) released its U.S. House Price Index (HPI) for September.  According to the FHFA HPI, U.S. house prices rose 18.5 percent from the third quarter of 2020 to the third quarter of 2021. By comparison, consumer prices have increased 6.2 from a year ago.  That’s running hot!  But 6.2 percent consumer price inflation is nothing.  House prices have inflated nearly 3 times as much over this same period. Here in the Los Angeles Basin, for example, things are so out of whack you have to be rich to afford a 1,200 square foot fixer upper in a modest area.  Yet the clever fellows in Washington have just the solution. Massive house price inflation has prompted the FHFA, and the government sponsored enterprises (GSEs) it regulates, Fannie Mae and Freddie Mac, to jack up the limits of government backed loans to nearly a million bucks in some areas. Specifically, the baseline conforming loan limit for 2022 will be $647,000, up nearly $100,000 from last year.  In higher cost areas, conforming loans are 150 percent of baseline – or $970,800.  What gives? If you recall, ultra-low interest rates courtesy of the Federal Reserve following the dot com bubble and bust provided the initial gas for the 2000s housing bubble.  However, the housing bubble was really inflated by Fannie Mae and Freddie Mac.  The GSEs relaxed lending standards and, thus, funneled a seemingly endless supply of credit to the mortgage market. The stated objective of these GSEs was to make housing affordable for Americans.  But their efforts did the exact opposite. The GSEs puffed up the housing bubble to a place where average Americans had no hope of ever being able to afford a place of their own.  Then, when the pool of suckers dried up, about the time rampant fraud and abuse cracked the credit market, people got destroyed. If you also recall, it wasn’t until credit markets froze over like the Alaskan tundra in late 2008 that the Fed first executed the radical monetary policies of quantitative easing (QE).  To be clear, QE had nothing to do with the last housing bubble; ultra-low interest rates and GSE intervention did the trick on their own.  QE came after. But now, in the current housing bubble incarnation, the Fed’s been buying $40 billion in mortgage backed securities per month since June 2020.  Is there any question why house prices have gone vertical over this time? The Fed is now tapering back its mortgage and treasury purchases.  This comes too little too late.  And with Fannie Mae and Freddie Mac now jacking up their conforming loan limits, house prices could really jump off the charts. We’ll have more on the current intervention efforts of these GSEs in just a moment.  But first, to fully appreciate what they are up to, we must revisit the not too distant past… Socialized Losses A moral hazard is the idea that a person or party shielded from risk will behave differently than if they were fully exposed to the risk.  A person who has automobile theft insurance, for instance, may be less careful about securing their car because the financial consequence of a stolen car would be endured by the insurance company. Financial bail-outs, of both lenders and borrowers, by governments, central bankers, or other institutions, produce moral hazards; they encourage risky lending and risky speculation in the future because borrowers and lenders believe they will not carry the full burden of losses. Do you remember the Savings and Loan crisis of the 1980s? The U.S. Government picked up the tab –  about $125 billion (a hefty amount at the time) – when over 1,000 savings and loan institutions failed.  What you may not know is the seeds of crisis were propagated by Franklin Delano Roosevelt during the Great Depression when he established the Federal Deposit Insurance Company (FDIC) and the Federal Saving and Loan Insurance Company (FSLIC). From then on, borrowers and bank lenders no longer had concern for losses – for they would be covered by the government.  The Savings and Loan crisis confirmed this, and further propagated the moral hazard culminating in the subprime lending meltdown. Obama’s big bank bailout of 2008-09 socialized the losses.  Then the Fed’s QE and ultra-low interest rates furthered the moral hazard.  These are now the origins of the current housing and mortgage market bubble…and future bust. By guaranteeing mortgage securities up to nearly $1 million in some areas the government encourages risky lending by banks and speculation by investors.  Banks are less prudent about who they loan money to because the loans will be securitized and sold to investors.  Similarly, investors speculate on these securities because they are guaranteed by the government. Once again, the government is promoting a “heads, I win…tails, you lose” milieu where banks and investors reap big profits taking on big risks and where the losses are socialized by tax payers.  It also sets the stage for massive grift… The Anatomy of a Swindler FDR – the thirty-second U.S. President – was responsible for setting up Fannie Mae.  But another FDR – Franklin Delano Raines – was responsible for running it into the ground. The son of a Seattle janitor, FDR grew up knowing what it was like to have not.  He concluded at a young age it was better to have. Yet it was while mixing with Ivy Leaguers at Harvard University and Harvard Law School where he really refined his thinking.  He came to believe the government should be responsible for supplying the have nots with tax payer sponsored philanthropy. FDR came out of school with the wide eyed ambition of a lab rat.  He was determined to sniff out his way to wealth…and once and for all, find that ever illusive cheese at the end of the maze. The first corner he peered around smelled remarkably prospective.  But he came up empty.  Three years in the Carter Administration didn’t offer the compensation he’d dreamed of. To have was better, remember.  The next corner FDR peered around was much more lucrative.  He did an 11 year stint at an investment bank. But it was in 1991 when FDR got his big break.  For it was then that he became Fannie Mae’s Vice Chairman.  And it was then that he garnered hands on access to muck with the lives of millions.  Still, he wasn’t quite sure how to go about it. To learn such tips and tricks, FDR studied one of the true masters of our time…Bill Clinton.  From 1996 to 1998, he was the Clinton Administration’s Director of the U.S. Office of Management and Budget.  There he discovered you must have a vision…a mission…a delusion that is so grand and so absurd, the world will love you for it. One evening, in the autumn of 1997, it came to him in a flash.  Staring deep into the pot of his chicken soup, just as it approached boil, he hallucinated an image of a house.  Suddenly a small part of the grey matter of his brain opened up… For where Hoover had foreseen a chicken in every pot and a car in every garage, FDR now foresaw much, much more.  A chicken and a car were not good enough.  In FDR’s world, everyone should also get a house with a pot to cook the chicken in and a garage to park the car in.  And he knew just how to give it to them. Yet best of all, FDR also knew he could become remarkably rich pawning houses to the downtrodden.  So in 1999, he returned to Fannie Mae as CEO and got to work on his master plan… Fraudulent Earnings Statements It was a pretty simple four point plan… If low interest rates make housing more affordable, then even lower interest rates make housing even more affordable. So, too, if 20 percent down put housing out of reach for some, then 10 percent down was better. And zero percent down was optimal. Similarly, if a borrower’s credit score doesn’t meet the requisite credit standard, just relax the standard. And lastly, if a borrower’s income is too low to qualify for a loan, just let them state what ever income it is that they must have to get the loan. With the ground rules in place by 1999, FDR began the pilot program that would ultimately ruin the finances of the western world.  It involved issuing bank loans to low to moderate income earners, and to ease credit requirements on loans that Fannie Mae purchased from banks. FDR promoted the program stating that it would allow consumers who were, “A notch below what our current underwriting has required,” get a home. Here’s how it worked… Banks made loans to people to buy houses they really couldn’t afford.  Fannie Mae bought the bad loans and bundled them together with good ones as mortgage backed securities.  Wall Street then bought these mortgage backed securities, rated them AAA, and then sold them the world over…taking a nice cut for their services. FDR had a heavy hand in the action too.  By overstating earnings, and shifting losses, he pocketed the large bonuses a janitor’s son could only dream of.  According to a September 19, 2008 article by Jonah Goldberg, titled, Washington Brewed the Poison, FDR “…made $52 million of his $90 million compensation package thanks in part to fraudulent earnings statements.” Efforts to reform the scheme were stopped by the Democrats in Congress, who weren’t ready to give up the gravy train of money that flowed from Fannie Mae to their campaigns.   “Barack Obama, the Senate’s second-greatest recipient of donations from Fannie and Freddie after [Christopher] Dodd, did nothing.” Now, just 13 years later, Fannie Mae and Freddie Mac are at it again… Here We Go Again On June 23, 2021, in Collins v. Yellen, the Supreme Court decided the President could remove the FHFA director without cause.  The next day, President Biden replaced Trump’s director of the FHFA, Mark Calabria, with a temporary appointment. FHFA, as noted above, regulates government-backed housing lenders Fannie Mae and Freddie Mac.  Prior to getting his pink slip, Calabria had been working to reduce the harm these GSEs could do to the economy. Biden’s replacement immediately reversed course, reinstituting the social engineering policies that brought down the housing market in 2008.  Acting Director Sandra Thomas: “There is a widespread lack of affordable housing and access to credit, especially in communities of color.  It is FHFA’s duty through our regulated entities to ensure that all Americans have equal access to safe, decent, and affordable housing.”  One could mistake these words for those of Franklin Delano Raines.  Certainly, the madness it fosters will be Raines like.  The Wall Street Journal reports: “The problem the [Biden] administration sees is that housing and rental prices are too high.  The fact that the administration’s own policies have caused an inflationary trend in housing along with food, energy and gasoline, among others, is no deterrent. “[…] the administration wants people who would otherwise rent to become homeowners.  These young families would take on the risk and the burden of a mortgage, which the government—through Fannie Mae and Freddie Mac—will make much cheaper.  Investors, of course, will buy these risky mortgages from Fannie and Freddie because they are backed by the government.  “Here we go again.  The only difference between what the administration is proposing, and what brought about the 2008 financial crisis is that the economy is already in an inflationary period, induced by the administration’s other policies.  This will make homeownership even riskier.  In addition, Fannie and Freddie will be buying mortgages of up to $1 million, instead of $450,000. “But the government’s lower underwriting standards drive down standards for private lenders, too.  Banks and other mortgage lenders—if they want to stay in the business—have to offer their mortgages on similar terms.  People who own homes then dive into the market to take advantage of the low down payments, and housing prices rise even faster. This encourages cash-out mortgages, in which homeowners reduce the equity in their homes, sometimes to buy a boat.  “The process goes on for years until prices are so high that sales growth falls and homeowners can’t sell their homes to pay off their mortgages.  Housing prices then collapse, mortgages go unpaid.  Banks, other lenders, and even Fannie and Freddie incur losses and another financial crisis begins.” But wait, there’s more… The Upshots of the New Housing Bubble Fiasco House prices are already in bubble territory in many places across the county.  At these prices, who’s buying? Wall Street.  Pension funds.  BlackRock Inc.  And many, many others… Institutional investors have securitized the residential real estate market.  Hundreds of firms are competing with regular house buyers.  They’re also bidding up house prices. Invitation Homes, for example, is a publicly traded company that was spun off from BlackRock in 2017.  Invitation Homes gets billion dollar loans at interest rates around 1.4 percent – about half the rate of what regular house buyers get.  Often times they just pay in cash. According to a recent SEC disclosure, Invitation Homes’ portfolio of houses is worth $16 billion.  The company collects about $1.9 billion in rent per year.  Thus it takes only about eight years of rental payments to pay back a typical house that Invitation Homes has bought. Invitation Homes now owns over 80,000 rental houses and has a market capitalization of $24.6 billion.  The company has deep pockets.  Regular house buyers cannot compete. No doubt, this is an ugly situation.  The ugliness hasn’t been created by institutional investors.  They’re merely scratching for yield in a world where capital markets have been destroyed by the Fed.  Of course, there’s no situation that’s too ugly for Washington to not make even uglier. According to a recent White House fact sheet: “As supply constraints have intensified, large investors have stepped up their real-estate purchases, including of single-family homes in urban and suburban areas. […].  Large investor purchases of single-family homes and conversion into rental properties speeds the transition of neighborhoods from homeownership to rental and drives up home prices for lower cost homes, making it harder for aspiring first-time and first-generation home buyers, among others, to buy a home. […] “President Biden is committed to using every tool available in government to produce more affordable housing supply as quickly as possible, and to make supply available to families in need of affordable, quality housing – rather than to large investors.” This logic validates FHFA jacking up the limits for conforming loans.  Indeed, the clever fellows in Washington want to make housing more affordable by allowing more and more people to take on massive subsidized mortgages.  The logic makes perfect sense…so long as you have the intelligence of a box of rocks. We all know where this goes.  We all know where this leads. First time house buyers, competing with institutional investors, will use the government’s relaxed lending standards to chase prices higher and higher.  Then, once the mortgage market is sufficiently riddled with fraud and corruption and tens of millions of Americans are tied into loans they cannot repay, the impossible will happen… House prices will go down! …along with the hopes and dreams of those that got sucked into this wickedness. Sandra Thomas will be flummoxed.  Congress will socialize the losses once again.  And populace rage will be channeled into some new Occupy Wall Street movement.  Then things will really get ugly. These – and many more – are the upshots of the new housing bubble fiasco. Tyler Durden Sat, 12/04/2021 - 09:20.....»»

SuRo Capital Corp. (NASDAQ:SSSS) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good day ladies and gentlemen and thank you for standing by. Welcome to the SuRo Capital Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will […] SuRo Capital Corp. (NASDAQ:SSSS) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good day ladies and gentlemen and thank you for standing by. Welcome to the SuRo Capital Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This call is being recorded today, Wednesday, March 15, 2023. I will turn the call over to Mr. Sindhu Kotha of SuRo Capital. Please go ahead. Sindhu Kotha: Thank you for joining us on today’s call. I am joined today by the Chairman and Chief Executive Officer of SuRo Capital, Mark Klein; and Chief Financial Officer, Allison Green. Please note that a slide presentation corresponding to today’s prepared remarks by management is available on our website at www.surocap.com under Investor Relations, Events & Presentations. Today’s call is being recorded and broadcast live on our website at www.surocap.com. Replay information is included in our press release issued today. This call is the property of SuRo Capital and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today’s earnings press release regarding forward-looking information. Statements made in today’s conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial condition or results and involve a number of risks, estimates, and uncertainties, including the impact of the COVID-19 pandemic and any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including but not limited to those described from time-to-time in the company’s filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of SuRo Capital’s latest SEC filings, please visit our website at www.surocap.com or the SEC’s website at sec.gov. Now, I would like to turn the call over to Mark Klein. Mark Klein: Thank you, Sindhu. Good afternoon and thank you for joining us today during these tumultuous times. We would like to share the results of SuRo Capital’s fourth quarter and fiscal 2022. Over the weekend, the second and third bank failures in US history occurred when Silicon Valley Bank and Signature Bank closed. The residual impact of these events is still rippling through the broader markets. In particular, the global financial system is experiencing instability that is being despite the actions taken by the Federal Reserve. While Silicon Valley Bank and Signature Bank may be the only financial institutions to fail, uncertainty may cause significant further dislocation. Additionally, the SVB closure has highlighted the concentration of interdependencies that exist within and between the startup and venture capital ecosystems. As such, we expect the unfortunate collapse of SVB, which was densely integrated within the startup funding ecosystem to potentially have longer tail impacts and possibly shift the way we think about liquidity solution. Amid these events, our team moved quickly to both assess and mitigate where possible exposure to SVB as well as reach out to our portfolio companies, determine what support SuRo Capital might be able to provide. SuRo Capital’s direct exposure to the affected banks was limited to less than a $2,000 business checking account at SVB. SuRo Capital’s cash and securities are held at our custodian US Bank and in its short-term US Treasuries. Additionally, stemming from acts the Fed, all of our portfolio companies that held cash at SVB are expected to regain access to those funds. It is important to also contextualize these recent events which have taken place against the backdrop of 2022. As has been well 2022 , it was one of the worst years for equity markets in decades. The year saw the NASDAQ Composite Index declined by over 30%, while technology stocks as measured by the MorningStar US Technology Index declined 31.5%, their largest single-year loss since 2008. NASDAQ Market Intelligence reports that growth, heavy communications, consumer discretionary, and technology sectors were the largest , with 2022 declines by approximately 40%, 37%, and 28% respectively. Given the overall market conditions, we have seen and continue to see a repricing of private securities and opportunities for us to take advantage of the market’s volatility. While we have been cautious about deploying capital into the turbulent markets, we are seeing increasingly compelling opportunities as the pricing of private — to the movements in the public markets. To that end, we made investments totaling $24 million over the course of the year with $10.3 million of that being deployed in Q4. The Q4 investments comprised of one new portfolio company, Locus Robotics and a follow-on investment made in FanPower via SuRo Capital Sports. Moving further into the new year with over $125 million of investable capital, we remain continuing investing in both primary and secondary opportunities — later stage, high-growth companies at which we will — be we believe will be compelling valuations. We believe current market conditions present an opportunity to explore prospects as businesses opt to remain private for longer to avoid going public in volatile market conditions. Additionally, while there is still a divergence between pricing in the private and public markets, we believe — will continue to converge created advantageous conditions for us to deploy capital. Despite significant slowdowns in SPAC transactions, we are pleased to share the following recent updates of our SPAC positions. On February 27, 2023 — Colombier acquisition announced their intention to merge with PublicSq., an ecommerce marketplace at a valuation of more than $200 million. Assuming — between Colombier and PSQ Holdings is completed, SuRo Capital’s position in the new company will be worth more than $25 million. If the price of the new company holds, SuRo will see an over $20 million increase in its position, given our current stake in Colombier acquisition. Our current cost basis for the investment is approximately $2.7 million. On February 17, 2023, Churchill Capital VI and Churchill Capital VII filed 8-Ks notifying investors they had signed LOIs with target companies. While we are encouraged they have signed an LOIs, this does not ensure that they will reach a definitive agreement or consummate these transactions. Turning to Q4, we ended the year with a net asset value of $210 million or $7.39 dollars per share. That NAV compares to a net asset of $7.83 a share in Q3 2022 and $11.72 dollars a share at the end of 2021. Turning to our top five positions, I’d first want to highlight our cash position. As of year-end, our cash and short-term treasury is available for investment were approximately $120, representing 44% of our gross assets. As we have previously discussed, we believe having cash in this environment advantageous leaves us to continue seeking out new opportunities becoming available due to current market conditions. SuRo Capital’s top five positions as of December 31st were Learneo, formerly known as Course Hero; Blink Health; Orchard Technologies, Locus Robotics, and Architect Capital PayJoy SPV. These positions accounted for approximately 59% of the investment portfolio at fair value. Additionally, as of December 31st, our top 10 positions accounting approximately 78% of the investment portfolio. In the fourth quarter, Course Hero announced the formation of Learneo, a new platform that will house the company six distinct operating businesses; CliffsNotes Course Hero, LitCharts, QuillBot, Squibber , and Symbolab. The parent organization will now be under the Learneo name to reflect the company’s recent growth in business segments that not only support educational use cases, but also support a development of fundamental — foundational skills that unlock productivity beyond education. Our most recent investment to the SuRo Capital investment portfolio is Locus Robotics. Locus is an industry-leading autonomous mobile robotics company that seeks and accuracy in fulfillment and distribution warehouses. We participated with a $10 million investment in Locus’ Series F Preferred Round that was led by Goldman Sachs Asset Management and G2 Venture Partners and as reported by Business Insider was oversubscribed. Locus seeks to deliver productivity increases and improvements in warehouse operations by coordinating human labor with their robotic systems. Locus is currently deployed in over 230 sites globally for more than 90 worldwide customers including DHL, GEODIS, and Ryder. We believe Locus innovative solution is well-positioned for retailers third-party logistic companies, 3PLs and especially warehouses to effectively manage the increasingly complex and demanding requirements placed on today’s fulfillment environments. Since completing the funding round, Locus Robotics has formed partnerships with Berkshire Grey, a leader in AI enabled robotic solutions that automate supply chain processes — Optoro, a leading technology platform for retail and returns of reverse logistics. The company solution picked over 230 million units during the peak holiday shopping period, more than doubling the total number of items in the entire 2021. Transitioning to our public investments, as previously stated, it is our objective to sell our public positions when lockup restrictions expire and there is a relative stability in a given company’s public position trading. In line with this, we continue to monetize several of our public unrestricted positions over the course of the quarter. During the fourth quarter, we fully exited our position in Rover and reduced our positions at NewLake Capital Partners, Rent the Runway, and Kahoot. Subsequent to year end, we sold our remaining positions in Rent the Runway and what was remaining in Kahoot. I would also like to reiterate SuRo Capital’s commitment to initiatives that enhance shareholder value. As such, given our stock is trading at compared to net asset value, we believe our active share repurchase program is an efficient and an accretive deployment of capital. Allison will speak more about our share repurchase program later in the call. As always, it is our intent to be transparent as possible with respect to our dividend distributions. As a BDC that is elected to be treated as a , to distribute our net realized loan capital gains as dividends. Given we recognize net long-term losses in 2022, we will not be distributing any dividends for 2022. As public and private market volatility persists, we remain patient and selective as we continue to evaluate our new opportunities. This will allow us to leverage our considerable cash position and add high growth companies to our field and driving shareholder value. Thank you for your attention, and with that, I will hand it over to Allison Green, our Chief Financial Officer. ImageFlow/Shutterstock.com Allison Green: Thank you, Mark. I would like to follow Mark’s update with a more detailed review of our fourth quarter investment activity and financial results as of December 31st, including the status of our share program and our current liquidity position. First, I will review our investment activity. During the fourth quarter, we invested a total of $10.3 million in new investments. New investments during the fourth quarter include; a $10 million dollars investment in the Series F preferred shares of Locus Robotics Corp. and a $250,000 dollars follow-on investment and Series C2 preferred shares of YouBet Technologies Inc. doing business as FanPower, the SuRo Capital Sports. Over the course of the fourth quarter, we sold our remaining public shares of Rover and continued to monetize our public common shares in Kahoot, NewLake Capital Partners and Rent the Runway. sales of our unrestricted publicly-traded investments, during the fourth quarter, we received approximately $300,000 in proceeds from Second Avenue related to principal repayment and interest on the 15% term loan due December 2023 as well as other investment, dividend, and interest income. Subsequent to year end through today, we completed a $2 million follow-on investment in Orchard Technology Inc. Senior 1 Series preferred shares. Additionally, year end through today, we sold our remaining public common shares of Rent the Runway and continued to monetize our public common shares in Kahoot and NewLake Capital Partners. Finally, subsequent to year end, we received approximately $200,000 in net proceeds from Second Avenue related to principal repayment and interest on the 15% term loan due December 2023 as well as other investment dividends and interest income. Segmented by six general investment of our investment portfolio at year end technology, representing approximately 39% of the investment portfolio at fair value. Financial technology and services, the second largest category, representing approximately 24% of the portfolio. The marketplaces category accounted for approximately 17% of our investment portfolio and approximately 10% of our investment portfolio is invested in cloud and big data companies. Social and mobile accounted for approximately 9% of the fair value of our portfolio and sustainability accounted for less than 1% of fair value of our portfolio as of December 31st. As mentioned earlier by Mark, SuRo Capital is committed to initiatives that enhance shareholder value. As such, over the course of 2022, SuRo Capital repurchased over 3 million shares, representing approximately 10% of previously outstanding shares via the share repurchase program and modified Dutch Auction Tender Offer. The dollar value of shares that may yet be purchased by the company under the share repurchase program is approximately $16.4 million. The share repurchase authorized through October 31st, 2023. Under the repurchase program, we may repurchase SuRo Capital outstanding common stock in the open market provided to comply with the provisions under our insider trading policies and procedures, and the applicable provisions of the Investment Company Act of 1940 as amended and the Securities Exchange Act of 1934 as amended. We are pleased to report we ended the fourth quarter and fiscal year 2022 with an NAV per share of $7.39, which is consistent with our financial reporting. The decrease in NAV per share from $7.83 end of Q3 was primarily driven by a $0.27 per share decrease resulting from unrealized depreciation of our portfolio investments during the quarter, in addition to a $0.10 per share decrease due to a net investment loss and a $0.07 per share decrease due to net realized loss on investment. Additionally, I’d like to follow-up to Mark’s commentary regarding our tax treatment as the BDC RIC and dividends for 2022. As previously mentioned, SuRo Capital has elected to be treated as a RIC under Subchapter M of the Internal Revenue Code beginning 14 and is qualified to be treated as a RIC for subsequent taxable years. To qualify and be subject to taxes of RIC, the company is required to meet certain requirements in addition to the distribution requirements of an amount generally at least equal to 90% of its investment company taxable income and 98.2% of net long-term realized capital gains subject to an excise tax below 100% as defined by the Code. The amount to be paid out as the distribution is determined by the Board of Directors each quarter and is based upon the annual estimated by management of the company. Given our year end net investment loss of approximately $14.7 million and net long-term realized capital loss on investments of $5.9 million, we will not be distributing any dividends for 2022. This net long-term realized capital loss is carried forward into 2023. I would also like to take a moment to review SuRo Capital’s liquidity position as of December 31st. We ended the year with approximately $138.5 million including approximately $40.1 million in cash, $85.1 million dollars in short-term US securities and approximately $13.3 million in unrestricted public securities. This does not include approximately $24,000 in public securities subject to certain customary lockup provisions at year end. As Mark mentioned earlier, SuRo Capital’s direct exposure to recently impacted banks was limited to a less than $2,000 business checking account at Silicon Valley Bank. SuRo Capital’s cash is held at our custodian and in short-term US Treasuries. The approximately $13 million of unrestricted public securities held as of year-end represent our shares in Forge, Kahoot, NewLake Capital Partners, Rent the Runway, and Skillsoft valued at the December 31st, 2002 closing prices. The $24,000 of public security is subject to lockup provisions or other sales restrictions as of year-end is comprised of our position in Kahoot, valued at December 31st, 2022, closing public share price, less the discount for lack of market ability for the lockup provision. At December 31st, 2022, there were 28,429,499 shares of the company’s common stock outstanding. Presently, there are 28,338,580 shares of the company’s common stock outstanding. That concludes my comments. We would like to thank you for your interest and support of SuRo Capital. Now, I will turn the call over to the operator to start the Q&A session. Operator? Operator: Thank you. And we’ll first hear from Kevin Fultz of JP — JMP Securities. See also 22 Largest Hunting Companies in the US and 10 Best Healthcare Stocks for the Long Term. Q&A Session Follow Suro Capital Corp. (NASDAQ:SSSS) Follow Suro Capital Corp. (NASDAQ:SSSS) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Kevin Fultz: Hi, good afternoon and thank you for taking my question. I realize it’s a fluid situation, but just considering the events of the past week, has your view of the investment landscape shifted at all? I’m just looking to get your perspective and possibly maybe outlook on how recent developments could impact venture fundraising and also investment activity moving forward? Mark Klein: Thanks, Kevin, and thanks for your ongoing support. From Thursday up until today, it’s pretty interesting for all. I think if you were walking down the streets last Wednesday and ask people if they ever heard of Silicon Valley Bank, most would not have. So, clearly, the quick — the suddenness of what occurred caught everybody’s attention. I do think that with Silicon Valley Bank not there, you have — certain things that are occur as simple as how does a startup company or a new company open a bank account. As we all know, opening up a bank account large money set or banks takes an extreme period of time and it’s just a different level of complexity than whether it’s Silicon Valley Bank or some others that’s support the venture capital community. I think for a while venture capital funding has started to become more challenging. I think all of this is taken together an insular ecosystem that you see will cause people to take even more pause. I think on the secondary side, I suspect you’ll see more selling as people are trying to find liquidity and there’s a bit more uncertainty, so that might provide opportunity. Yet to be determined whether on the primary side, it will have any difference or not, but the primary markets have been challenged now for several months. So, hopefully that was helpful. Thank you again for your call. Operator: Was there anything further, Kevin? Kevin Fultz: No, that’s it for me. Thank you, Mark. Mark Klein: Thanks, Kevin. Operator: And there are no further questions. I’ll turn the call back over to our presenters for any additional or closing comments. Mark Klein: Well, thank you all again for taking time this afternoon to hear our earnings call. We’re always available to any of you if you want to call your ongoing support. Operator: That does conclude today’s call. Thank you all for your participation. You may now disconnect. Follow Suro Capital Corp. (NASDAQ:SSSS) Follow Suro Capital Corp. (NASDAQ:SSSS) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Readers are referred to the sections Non-IFRS Financial Measures and Forward-Looking Statements at the end of this release. All figures are expressed in Canadian dollars unless otherwise noted. MONTRÉAL, March 16, 2023 /CNW/ - Power Corporation of Canada (Power Corporation or the Corporation) (TSX:POW) today reported earnings results for the three and twelve months ended December 31, 2022. Power CorporationConsolidated results for the period ended December 31, 2022 HIGHLIGHTS Power Corporation Net earnings [1] were $486 million or $0.73 per share [2] for the fourth quarter of 2022, compared with $626 million or $0.93 per share in 2021.Adjusted net earnings [1][3] were $394 million or $0.59 per share, compared with $676 million or $1.00 per share in the fourth quarter of 2021. Adjusted net asset value per share [3] was $41.91 at December 31, 2022, compared with $52.60 at December 31, 2021.The Corporation's book value per participating share [4] was $34.58 at December 31, 2022, compared with $34.56 at December 31, 2021. The Corporation declared a quarterly dividend of $0.5250 per participating share, an increase of 6.1%, payable on May 1, 2023. On January 12, 2023, the Corporation announced the closing of the transaction to combine its interest in China Asset Management Co., Ltd. (ChinaAMC) under IGM Financial Inc. In 2022, the Corporation purchased for cancellation 11.2 million subordinate voting shares for a total of $415 million. On February 27, 2023, the Corporation announced its intention to purchase for cancellation up to 30 million subordinate voting shares during a twelve-month period under a normal course issuer bid. Contribution to net earnings from the publicly traded operating companies was $833 million in the fourth quarter of 2022, compared with $667 million in 2021.Contribution to adjusted net earnings from the publicly traded operating companies was $741 million in the fourth quarter of 2022, compared with $702 million in 2021. Great-West Lifeco Inc. (Lifeco) Fourth quarter net earnings were $1,026 million, compared with $765 million in the fourth quarter of 2021.Adjusted net earnings [5] were $892 million, compared with $825 million in the fourth quarter of 2021. Total assets were $701 billion and assets under administration [3] were $2.5 trillion at December 31, 2022, an increase of 11% and 9%, respectively, from December 31, 2021. Lifeco announced a 6.1% increase in its quarterly dividend, to $0.52 per share, payable March 31, 2023. Lifeco announced, on January 25, 2023, its intention to purchase for cancellation up to 20 million common shares during a twelve-month period under a normal course issuer bid. IGM Financial Inc. (IGM or IGM Financial) Fourth quarter net earnings were $224.7 million, compared with net earnings of $268.5 million and adjusted net earnings of $260.8 million in 2021. Assets under management and advisement [4] were $249.4 billion at December 31, 2022, a decrease of 10.0% from December 31, 2021 and an increase of 4.7% from September 30, 2022. Net outflows [6] were $440 million in the fourth quarter of 2022, compared with net inflows of $1.2 billion in the fourth quarter of 2021. Annual net inflows [6] for 2022 of $1.2 billion remained strong. In December 2022, IGM announced a strategic agreement with nesto Inc. to provide its clients with a best-in-class mortgage experience and enhance its efforts to support growth in its mortgage business. Groupe Bruxelles Lambert (GBL) GBL reported a net asset value [4] of €17.8 billion at December 31, 2022, or €116.18 per share, compared with €22.5 billion or €143.91 per share at December 31, 2021. In the fourth quarter of 2022, GBL completed €136 million of share buybacks. GBL completed €643 million of share buybacks in the twelve months ended December 31, 2022 and cancelled 3.4 million treasury shares. Sagard Holdings Inc. (Sagard) and Power Sustainable Capital Inc. (Power Sustainable) Assets under management [4], including unfunded commitments, of the alternative asset investment platforms were $21.1 billion at December 31, 2022, an increase from $19.1 billion at December 31, 2021. On November 29, 2022, Power Sustainable announced the closing of Vintage II of Power Sustainable Energy Infrastructure Partnership (PSEIP), raising $600 million of additional capital commitments, increasing the committed capital of the investment platform to $1.6 billion. On February 8, 2023, Sagard announced the initial closing of Sagard Senior Lending Fund with commitments totalling US$315 million. On March 9, 2023, Power Sustainable announced the launch of its Global and European infrastructure credit platforms which will target global investments in energy, transportation, social, digital and other sustainable infrastructure. [1] Attributable to participating shareholders. [2] All per share amounts are per participating share of the Corporation. [3]  Adjusted net earnings, adjusted net asset value and assets under administration (reported by Lifeco) are non-IFRS financial measures. Adjusted net earnings per share and adjusted net asset value per share are non-IFRS ratios. See the Non-IFRS Financial Measures section later in this news release. [4]  See the Other Measures section later in this news release. [5]  Defined as "base earnings" by Lifeco, a non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. [6]  Related to assets under management and advisement. FOURTH QUARTER Net earnings attributable to participating shareholders were $486 million or $0.73 per share, compared with $626 million or $0.93 per share in 2021. Adjusted net earnings attributable to participating shareholders [1] were $394 million or $0.59 per share, compared with $676 million or $1.00 per share in 2021. Contributions to Power Corporation's Earnings (in millions of dollars, except per share amounts) Net Earnings   Adjusted Net Earnings 2022 2021 2022 2021 Lifeco [2] 683 511 594 550 IGM [2] 140 166 140 161 GBL [2] (24) (3) (24) (3) Effect of consolidation [3] 34 (7) 31 (6) Publicly traded operating companies 833 667 741 702 Sagard and Power Sustainable [4] (183) 14 (183) 29 ChinaAMC  14 17 14 17 Other investments and standalone businesses [5] (82) 22 (82) 22 582 720 490 770 Corporate operations and Other [6] (96) (94) (96) (94) 486 626 394 676 Per participating share 0.73 0.93 0.59 1.00 Average shares outstanding (in millions) 667.3 676.5 667.3 676.5 Publicly traded operating companies: contribution to net earnings was $833 million and adjusted net earnings was $741 million, representing an increase of 24.9% and 5.6%, respectively, from the fourth quarter of 2021: Lifeco: contribution to net and adjusted net earnings increased by 33.7% and 8.0%, respectively. IGM: contribution to net and adjusted net earnings decreased by 15.7% and 13.0%, respectively. GBL: negative contribution to net earnings of $24 million. Results include the Corporation's share of a charge of $18 million in the fourth quarter of 2022 for losses due to an increase in the put right liability of the non-controlling interests in Webhelp Group (Webhelp) and charges related to Webhelp's employee incentive plan, as well as a decrease in contributions from GBL's associates and consolidated operating companies. Sagard and Power Sustainable: net earnings include a negative contribution of $160 million from Power Sustainable mainly related to a charge for the revaluation of non-controlling interests of $63 million due to fair value increases within the Power Sustainable Energy Infrastructure Partnership and operating losses in its energy infrastructure platform, as well as realized losses in the Power Sustainable China portfolio of $55 million. Sagard had a negative contribution of $23 million. Other investments and standalone businesses: negative contribution to net and adjusted net earnings of $82 million includes a non-cash impairment charge on the Corporation's investment in The Lion Electric Company (Lion) of $109 million after tax. Adjustments in the fourth quarter of 2022, excluded from adjusted net earnings, were a positive net impact to earnings of $92 million or $0.14 per share, mainly related to the Corporation's share of Lifeco's adjustments. Adjustments in the fourth quarter of 2021 were a negative net impact to earnings of $50 million or $0.07 per share, mainly related to the Corporation's share of Lifeco's adjustments and the Corporation's share of an impairment charge of $15 million recognized by Power Sustainable on direct investments in energy assets. [1] A non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. [2] As reported by Lifeco, IGM and GBL. [3]  Refer to the detailed table in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent Management's Discussion and Analysis (MD&A) for additional information. [4] Consists of earnings (losses) from the alternative asset investment platforms including controlled and consolidated subsidiaries. [5] Includes earnings (losses) from the Corporation's other investments and standalone businesses. [6] Includes operating and other expenses, dividends on non-participating shares of the Corporation and Power Financial Corporation (Power Financial) corporate operations; refer to the Earnings Summary below. TWELVE MONTHS Net earnings attributable to participating shareholders were $1,913 million or $2.85 per share, compared with $2,917 million or $4.31 per share in 2021. Adjusted net earnings attributable to participating shareholders [1] were $1,915 million or $2.85 per share, compared with $3,230 million or $4.77 per share in 2021. Contributions to Power Corporation's Earnings (in millions of dollars, except per share amounts) Net Earnings Adjusted Net Earnings 2022 2021 2022 2021 Lifeco [2] 2,143 2,088 2,143 2,175 IGM [2] 538 606 538 601 GBL [2] (133) 60 (133) 60 Effect of consolidation [3] 74 (35) 66 68 Publicly traded operating companies 2,622 2,719 2,614 2,904 Sagard and Power Sustainable [4] (375) 311 (365) 426 ChinaAMC 57 62 57 62 Other investments and standalone businesses [5] (20) 259 (20) 259 2,284 3,351 2,286 3,651 Corporate operations and Other [6] (371) (434) (371) (421) 1,913 2,917 1,915 3,230 Per participating share 2.85 4.31 2.85 4.77 Average shares outstanding (in millions) 670.6 676.8 670.6 676.8 [1] A non-IFRS financial measure; see the Non-IFRS Financial Measures section later in this news release. [2] As reported by Lifeco, IGM and GBL. [3]  Refer to the detailed table in the Contribution to Net Earnings and Adjusted Net Earnings section of the Corporation's most recent MD&A for additional information. [4] Consists of earnings (losses) from the alternative asset investment platforms including controlled and consolidated subsidiaries. [5]  Includes earnings (losses) from the Corporation's other investments and standalone businesses. [6] Includes operating and other expenses, dividends on non-participating shares of the Corporation and Power Financial corporate operations; refer to the Earnings Summary below. Great-West Lifeco, IGM Financial and Groupe Bruxelles LambertResults for the quarter ended December 31, 2022 The information below is derived from Lifeco and IGM's annual MD&As, as prepared and disclosed by the respective companies in accordance with applicable securities legislation, and which are also available either directly from SEDAR (www.sedar.com) or from their websites, www.greatwestlifeco.com and www.igmfinancial.com. The information below related to GBL is derived from publicly disclosed information, as issued by GBL in its fourth quarter press release at December 31, 2022. Further information on GBL's results is available on its website at www.gbl.be. GREAT-WEST LIFECO INC. FOURTH QUARTER Net earnings attributable to common shareholders were $1,026 million or $1.10 per share, compared with $765 million or $0.82 per share in 2021. Adjusted net earnings [1] attributable to common shareholders were $892 million or $0.96 per share, compared with $825 million or $0.89 per share in 2021. Adjustments in the fourth quarter of 2022, excluded from adjusted net earnings, were a positive net impact of $134 million, compared with a negative net impact of $60 million in 2021. Lifeco's adjustments consisted of: Positive earnings impact of $49 million relating to actuarial assumption changes and other management actions; Positive market-related impacts on liabilities of $38 million; and Positive impact from tax legislative changes of $84 million.      Partially offset by: Restructuring and integration costs of $32 million in the United States segment; and Transaction costs of $5 million related to recent acquisitions in the Europe segment. IGM FINANCIAL INC. FOURTH QUARTER Net earnings available to common shareholders were $224.7 million or $0.94 per share, compared with $268.5 million or $1.11 per share in 2021. Adjusted net earnings [2] available to common shareholders were $224.7 million or $0.94 per share, compared with $260.8 million or $1.08 per share in 2021. Adjustments in the fourth quarter of 2021, excluded from adjusted net earnings, were a positive impact of $7.7 million. Assets under management and advisement [3] at December 31, 2022 were $249.4 billion, a decrease of 10.0% from December 31, 2021 and an increase of 4.7% from September 30, 2022. GROUPE BRUXELLES LAMBERT FOURTH QUARTER GBL reported [4] a net loss of €112 million, compared with a net loss of €12 million in 2021. GBL reported a net asset value [3] of €17,775 million at December 31, 2022, or €116.18 per share, compared with €22,501 million or €143.91 per share at December 31, 2021. [1]  Defined as "base earnings" by Lifeco. For additional information, please refer to the Non-IFRS Financial Measures section later in this news release. [2]  Adjusted net earnings is a non-IFRS financial measure. For additional information, please refer to the Non-IFRS Financial Measures section later in this news release. [3] See the Other Measures section later in this news release. [4] GBL adopted IFRS 9 in 2018. Power Corporation continues to apply IAS 39; this resulted in a positive adjustment to the contribution from GBL of $72 million in the fourth quarter of 2022. Sagard and Power SustainableResults for the quarter ended December 31, 2022 Sagard and Power Sustainable comprise the results of the Corporation's alternative asset investment platforms, which includes income earned from asset management and investing activities. Asset management activities includes fee-related earnings (a non-IFRS financial measure, see the Non-IFRS Financial Measures section later in this news release), which is comprised of management fees less investment platform expenses. Asset management activities also includes carried interest and income from other management activities. Investing activities comprises income earned on the capital invested by the Corporation (proprietary capital) in the investment funds managed by each platform and the share of earnings (losses) of controlled and consolidated subsidiaries held within the alternative asset investment platforms. For additional information, refer to the table later in this news release. FOURTH QUARTER Net loss and adjusted net loss [1] of alternative asset investment platforms were $183 million, compared with net earnings of $14 million and adjusted net earnings of $29 million in the corresponding period in 2021. Adjustments in the fourth quarter of 2021, excluded from adjusted net earnings, were $15 million and related to the Corporation's share of an impairment charge recognized by Power Sustainable on direct investments in energy assets. Net loss in the fourth quarter is comprised of: A negative contribution of $7 million from the asset management activities of Sagard and Power Sustainable; A negative contribution of $176 million from investing activities comprised of : $13 million from Sagard; and $163 million from Power Sustainable comprised of: realized losses in the Power Sustainable China portfolio of $55 million; losses before the revaluation of non-controlling interests liabilities of $45 million which mainly includes operating losses in its energy infrastructure platform due to seasonality; and a revaluation of non-controlling interests liabilities [2] of $63 million due to fair value increases within the Power Sustainable Energy Infrastructure Partnership. Summary of assets under management [3] (including unfunded commitments): (in billions of dollars) December 31, 2022 December 31, 2021 Sagard [4] 17.7 16.2 Power Sustainable  3.4 2.9 Total 21.1 19.1 Percentage of third-party and associates 87 % 81 % [1] Adjusted net earnings is a non-IFRS financial measure. For additional information, please refer to the Non-IFRS Financial Measures section later in this news release. [2] The Corporation controls and consolidates the activities of PSEIP on a historical cost basis; however, limited partner equity interests held by third parties have redemption features and are classified as a financial liability which are remeasured at their redemption value. The net asset value [3] of PSEIP was $1,035 million at December 31, 2022, compared with $805 million at September 30, 2022. [3] See the Other Measures section later in this news release. [4] Includes ownership in Wealthsimple Financial Corp. (Wealthsimple) valued at $0.9 billion at December 31, 2022 ($2.1 billion at December 31, 2021) and excludes assets under management of Sagard's wealth management business. Other Investments and Standalone Businesses Results for the quarter ended December 31, 2022 Other investments and standalone businesses includes the Corporation's investments in investment and hedge funds and the share of earnings (losses) of standalone businesses. FOURTH QUARTER STANDALONE BUSINESSES Net loss of the standalone businesses in the fourth quarter of 2022 was $102 million, compared with net earnings of $12 million in 2021. The net loss in the fourth quarter of 2022 includes a non-cash impairment charge of $109 million after tax ($126 million pre-tax) on the Corporation's investment in Lion due to a decline in market value at December 31, 2022. At December 31, 2022, the fair value of standalone businesses was $0.8 billion, compared with $1.5 billion at December 31, 2021. Adjusted Net Asset Value and Participating Shareholders' EquityAt December 31, 2022 ADJUSTED NET ASSET VALUE Adjusted net asset value is presented for Power Corporation and represents management's estimate of the fair value of the participating shareholders' equity of the Corporation. Adjusted net asset value is calculated as the fair value of the assets of the combined Power Corporation and Power Financial holding company (the gross asset value) less their net debt and preferred shares. Refer to the Non-IFRS Financial Measures section later in this news release for a description and reconciliation. The Corporation's adjusted net asset value per share was $41.91 at December 31, 2022, compared with $52.60 at December 31, 2021, representing a decrease of 20.3%. (in millions of dollars, except per share amounts) December 31, 2022 December 31, 2021 Variation % Publicly Traded OperatingCompanies Lifeco 19,414 23,545 (18) IGM 5,592 6,749 (17) GBL  2,388 3,157 (24) 27,394 33,451 (18) Alternative AssetInvestment Platforms Sagard [1] 977 1,515 (36) Power Sustainable [1] 1,478 1,654 (11) 2,455 3,169 (23) Other ChinaAMC  1,150 1,150 − Standalone businesses [2] 829 1,331 (38) Other assets and investments 559 661 (15) Cash and cash equivalents 1,277 1,635 (22) 3,815 4,777 (20) Gross asset value 33,664 41,397 (19) Liabilities and preferred shares (5,701) (5,810) 2 Adjusted net asset value 27,963 35,587 (21) Shares outstanding (millions) 667.1 676.6 Adjusted net asset value per share 41.91 52.60 (20) [1] Includes the management companies of the investment platforms at their carrying value. [2] Includes Lion, LMPG Inc. (LMPG) and Peak Achievement Athletics Inc. (Peak). Power Corporation's Ownership in Publicly Traded Operating Companies Shares held [1](in millions)  Share price Ownership [1](%) December 31, 2022 December 31, 2021 Lifeco [2] 66.6 620.3 $31.30 $37.96 IGM 62.2 147.9 $37.80 $45.62 GBL [3] 14.9 22.8 €74.58 €98.16 [1] At December 31, 2022. [2] On January 12, 2023, subsequent to year-end, the Corporation and IGM completed a transaction in which the interest in ChinaAMC was combined under IGM. In a separate agreement, IGM sold approximately 15.2 million common shares of Lifeco, representing a 1.6% interest in Lifeco, to Power Financial.  [3] Held through Parjointco SA (Parjointco), a jointly controlled corporation (50%). PARTICIPATING SHAREHOLDERS' EQUITY Book value per participating share represents Power Corporation's participating shareholders' equity divided by the number of participating shares outstanding at the end of the reporting period. Participating shareholders' equity is calculated as the total assets of the combined Power Corporation and Power Financial holding company, including investments in subsidiaries presented using the equity method, less their net debt and preferred shares. The Corporation's book value per participating share was $34.58 at December 31, 2022, comparable with $34.56 at December 31, 2021. (in millions of dollars, except per share amounts) December 31, 2022 December 31, 2021 Variation % Publicly Traded Operating Companies.....»»

The real estate market is in an interesting state right now. Home sales are slowing because of higher interest rates, but prices in some areas have yet to drop. Overall, the median existing home sales price in January 2023 was up 1.3% from the same time last year, but home prices in expensive areas have […] The real estate market is in an interesting state right now. Home sales are slowing because of higher interest rates, but prices in some areas have yet to drop. Overall, the median existing home sales price in January 2023 was up 1.3% from the same time last year, but home prices in expensive areas have gone down, while prices in less expensive areas have gone up. Considering that home prices were reaching record highs in 2021, one would expect them to have normalized with the slowing market, but that has yet to happen. However, if interest rates continue to rise, prices should continue to drop. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more But what does that mean to you and your finances? This article will explore how the current real estate market can impact you financially. Real Estate Situations that Can Affect Your Finances There are several situations that you may find yourself in where the real estate market may affect your finances. 1. Buying a Home If you’re in the market to buy a home, you’re going to pay a higher interest rate than you would have in 2021. However, the inventory of homes is high and the number of buyers is down. That means that you may have more negotiating power with sellers. Prices may be higher, but chances are, most sellers are very motivated which could put you in the driver’s seat.  But you’ll end up paying a higher rate, but with a lower price point for the home, so it may even out for you financially. You can also refinance later if interest rates go down and get ahead of the game.  Be sure to do your research into what is happening in your area in terms of prices and the number of sales that are occurring. Every local market is different. Make sure that your real estate agent talks to you about current comparable sales, and use your negotiating power.  2. Selling a Home If you’re planning to sell your home in the near future, you may be under a bit of pressure. Buyers are fewer in many areas due to the higher interest rates, so the people that are buying have the negotiating power. If you can, you may be better off waiting to sell until rates go back down. However, what will happen with interest rates and when is a great unknown. If you need to sell and you want to get a specific profit on what you paid for the home or on what you owe on your mortgage, you can calculate here what price you need to stick to.  Often the best strategy in this kind of market is to price your home higher than what you actually need. That way the buyer can negotiate and feel like they’re getting a deal. It cannot be stressed enough, however, that the best strategy depends on your local market.  Do your homework and talk to your real estate agent about what is happening in your market and what comparable homes are selling for. And if you need to make a certain profit on your home, you can stick to your guns and wait for that buyer that “must have” your home. Work with your agent to make your home as appealing to buyers as possible by making repairs or upgrades and staging the home well. In a tough market, you need to make your home stand out from the competition. Also, work with your tax advisor when considering the price that you need to get. Selling at lower price means less in capital gains tax, so that will have an impact on your finances overall.  Special note: there was $400mm in sales in January 2023. 3. Investing in Real Estate  Investing in real estate right now is an interesting proposition. Warren Buffet said “be greedy when others are fearful”. Real estate investors right now are fearful of economic and market instability; however, having that kind of outlook depends on your goals and your risk tolerance.  If you’re looking to flip houses as an investment, it’s likely that you can find deals, particularly on distressed properties. But with the number of home buyers decreasing, you may find yourself having trouble finding a buyer and thus incur carrying costs. You can still make a profit, though, if you can put minimal money into the property and price it competitively based on local real estate conditions. Your best bet if you want to flip homes now, is to carefully analyze each potential deal, including what is happening in the specific area the property is in, and cherry pick only the deals that make the most sense and have the least risk. With so many “fearful” investors, you’ll have less competition, so you can afford to be choosy.  If you’re considering buying rental properties, it’s still a matter of looking at each deal. The higher interest rates mean that fewer buyers are buying and are renting instead, which can drive rents up. That’s great if you can find a great deal and pay cash for the property. If you need to finance the property, however, you’ll be paying a higher interest rate which will reduce your cash flow.  The bottom line is, if you’re considering investing, you have to really understand your local market. Do considerable research before making a decision.  5. Refinancing Your Mortgage Clearly, if your current interest rate is lower than current mortgage rates, refinancing your mortgage may not be a good idea, and vice versa. You also have to consider your closing costs when deciding if refinancing is financially beneficial.  If you are refinancing to a lower rate and getting cash out from your equity, you may find that when the bank assesses your home’s market value, it may be lower than you think. Again, it depends on what’s happening to prices in your local market. If you want to refinance to a shorter loan term, you may still be able to benefit. Rates on 10 or 15 year mortgages are generally lower than 30 year mortgages, but your payment may still be higher because of the shorter term.  Another thing to consider is that lenders tend to be more conservative in a slow real estate market, so it may be more difficult to qualify for the refinance. Credit score and income requirements will be tighter, so be prepared to go through a more rigorous application process. Your best bet is to shop around for the best rates and terms, analyze your options, and decide which option, if any, is right for you. Here is a nifty refinance mortgage calculator to help you. 6. Home Equity Loans If you’re considering getting a home equity loan, whether the real estate market will impact you depends on your goals. If you want a home equity loan to consolidate other debt, current mortgage rates are still likely lower than the rates on other debt such as credit cards. However, similar to a cash-out refinance, your equity may not be as high as you expect based on market values. If you want a home equity loan to remodel your home, if you’re doing it just because you want your house to be nice and you can afford the payments, go for it. You might want to consider a home equity line of credit with a variable rate so that the rate goes down when rates go down in general. However, rates may also go up. If you want a home equity loan for remodeling, but with the goal of selling your home for a higher price in the near future, you’ll need to give it careful consideration. If rates continue to rise and home prices fall, you may not get your money back from the remodeling you do and the interest you pay on the loan. Be sure not to overdo your improvements. 7. Renting Fewer people buying homes means more people renting, which is creating a rental shortage due to high demand. As a result, in 2023 many predict that rental price growth is likely to remain high, which is bad news for renters.  Other economic factors are also decreasing the amount of income that renters can spend on rent. What this means is that rentals in higher-priced areas will be less in demand, which should start to force prices on those rentals down a bit.  In the longer term, rental prices are likely to start to come back down, so if you’re finding it difficult to afford current rents, you may only be struggling temporarily.  As with all the other effects of the real estate market, how the current conditions will affect renters is location dependent. If you’re in the market for a new rental, do your homework and shop around, and don’t be afraid to negotiate with landlords to try to get a better rate.  In Closing The real estate market is interesting right now, and it’s difficult even for experts to predict exactly what will happen in 2023 and beyond. Many factors will have an impact on the market’s direction, so you should stay informed about what’s happening in the market, particularly in your area.  If you’re in any of the situations discussed, be sure to do your market research and look to professionals, whether it be a real estate agent or a financial advisor, for advice. By doing so, you can find ways to successfully navigate this unpredictable market and protect your finances. Article by Carolyn Young, Due About the Author Carolyn Young is a highly motivated and accomplished marketing professional with over 10 years of experience in the industry. She has a proven track record of driving revenue growth and brand awareness through innovative marketing strategies and tactics. Throughout her career, Carolyn has held various marketing roles at both large corporations and startups. Her expertise includes market research, digital marketing, content creation, social media management, and event planning. Currently, Carolyn is the Marketing Director at a leading software company, where she is responsible for overseeing all aspects of the company's marketing initiatives. She is passionate about helping companies build their brand, connect with their target audience, and achieve their business goals......»»

There are several questions consumers might want to ask before they make one of their biggest purchases. Here are 9 questions you should always ask when buying a car.Kekyalyaynen / Shutterstock.com Car buying isn't always the most fun experience. But shoppers can get through it with certain tips and tricks. You should always ask about inventory dynamics and incentives. Most shoppers don't like car buying — but there are some ways they can make the experience a little less painful. From conversations with dealers and industry analysts from Edmunds, J.D. Power, Kelley Blue Book, TrueCar, Cox, and more over the past several months, we've compiled the questions consumers might want to ask before they make one of their biggest purchases.What type of car should I look for right now? This could be an easy one if a buyer knows exactly what they need and want in a vehicle. But if you're somewhat flexible or needs some pointers on what kind of car to go for next, the brand, type of vehicle, and inventory will likely all influence your final decision. In today's market, there are a lot of nuances to keep track of. Certain brands are more expensive now than in the past, like BMW. Others, like Hyundai and Buick, are less so. Reliability is another important factor to consider, and brands like Kia and Chevrolet top the list. The vehicles that are best for families is another one, too.Certain types of vehicles, like SUVs and pickups, are more costly, while less-in-demand sedans and minivans aren't as expensive. Inventory, meanwhile, is on a rocky ride. (More on that later.)Larger vehicles are generally more in demand and more costly.David Zalubowski/APWhat's going on with new car prices this year? The pandemic sent new (and used) vehicle prices skyrocketing over the past few years. For the most part, new car prices aren't as intimidating as they were during the peak of COVID, but they also aren't falling down at a rapid pace. The average transaction price for a new vehicle was $48,763 last month, according to Kelley Blue Book. Shoppers might want to avoid certain models if they want the best deal. They also might want to look at the best cars for every budget.Waiting several months for a new vehicle is a new normal in the car-buying industry.Maskot/Getty ImagesHow long will I have to wait to get my car? Unless a car buyer doesn't have a lot of specific features in mind and they can drive off a dealer's lot with whatever vehicle they find that day, odds are, they are going to wait several months for a car. But that's the new normal in the world of car buying. Automakers learned throughout the pandemic that customers are willing to wait and pay more to get the cars they actually want. It's not atypical to place an order for a new vehicle and have the estimated delivery window be upwards of six months away — though that means some customers are hedging their bets. The chip shortage has been getting better, but it's still important to ask dealers about.ReutersShould I be worried about the chip shortage? The chip shortage, a consequence of the pandemic and supply-and-demand issues, has been hobbling the auto industry's vehicle output for years now. But this supply chain crisis, which impacted 11 million vehicles worldwide in 2021 and 4.38 million in 2022, is starting to improve. Concerns over the chip shortage remain alive and well, even if automakers are instead blaming other industry disruptions as reasons for delays.  But the impacts of it might be less consequential than other supply chain constraints affecting automakers' ability to deliver. What else is going on with inventory? Generally speaking, car buying is never going back to normal. Many automakers are swapping market share for profits and prioritizing higher-end, luxury vehicles instead of starter cars. Meanwhile, dealers learned from all the demand that they don't have to have the same amount of inventory on their lots as they might have pre-pandemic. Inventory is improving — meaning a dealer might not sell a vehicle the same day it hits its lot — but many brands are still surviving on historically low supply. Domestic brands like Ford and GM have generally had higher days' supply than other automakers in recent months, with Ford at 60 days, GM at 52 days, and Stellantis (the merger of Fiat Chrysler and the French PSA Group) at 68 days in January, according to a Deutsche Bank note. Other brands are nowhere near those levels yet.Shoppers need to beware of the caveats that could come with having inventory. Many of the car brands with more inventory on lots than others might also have higher loan payments. Incentives are historically low, but creeping up.KELENY / Shutterstock.comWhat incentives or other offers are available right now?Automakers loved how much they could get for vehicles during the pandemic. That meant all sorts of incentives and dealership end-of-year blowout sales were no longer.  But incentives and other deals are starting to slowly creep back to the auto-buying market.Incentives are still historically low, but they rose to 3% of the average transaction price last month, a 10-month high, according to Kelley Blue Book. (That's down from 8.3% of the ATP just two years earlier.)Luxury cars had the highest incentives, at 6.5%, last month. Vans, meanwhile, had the lowest incentives, with less than 1% of the average transaction price."Try to take advantage of the incentivized rates that the manufacturers are offering," Whitney Yates-Woods, dealer principal of Yates Buick GMC in Goodyear, Arizona, told Insider. "Make sure that you ask to see if you can qualify for it, because pretty much everyone's offering something and also, you can negotiate a good deal."What about interest rates and financing? The tides have turned for the better for shoppers looking for specific makes and models of vehicles. But skyrocketing interest rates are the new hurdle for many would-be car buyers. This could especially penalize customers with lower credit scores."The role of a dealer isn't just to sell them a car, it's to help them find the lowest interest rate possible, and that's both new car dealers and used car dealers. They have the ability to work with multiple banks," George Chamoun, CEO of digital marketplace ACV, said. "Dealers spend a lot of time understanding the best interest rates and what the various options are," Chamoun said. "Even based on the specific car, one bank may provide a lower interest rate on a specific sort of make and model."Does the used car market have anything I'd be interested in?The used car market might be even more complicated for car shoppers than the new market right now. The effects of COVID really impacted used vehicle supply and demand. As a result, far fewer car shoppers have opted to lease a car in recent years. And many who did lease a car chose to buy it after their contract was up out of fear of not being able to find a replacement in inventory. Those dynamics have directly impacted the types of vehicles on the used car market today. Fewer low-mileage, newer cars are available, and pricing is volatile.  In February, wholesale used vehicle prices were down 7% from a year earlier, but they rose 4.3% from the month before, according to Cox's Manheim Used Vehicle Value Index — the largest increase between the two months since 2009.But you still might be able to find some used vehicles with the biggest price drops. Used car prices have been especially volatile.Justin Sullivan/Getty ImagesShould I do a trade-in? Given the auto industry's supply-and-demand crisis over the past few years, car owners could get sky-high trade-in values.Unfortunately for today's shoppers, those days might be over.The average transaction price for a used vehicle peaked at $31,300 in April 2022, per J.D. Power. That stood at $29,226 last month. Meanwhile, trade-in values hit a high of $25,556 in June 2022, but in January, they stood at $21,984, down 14%.But don't fret: Dealers are still looking for specific trade-ins that fit the needs of their used vehicle customers. You might be sitting on a car with a high resale value.Read the original article on Business Insider.....»»

More than 9,000 residents in Maryland got almost $9 million in tax credits to pay their student loan debt. This tax credit for student loan debt is part of the program that has been running since 2017 and offers a great opportunity to residents struggling to pay off their student loan debt. Tax Credit For […] More than 9,000 residents in Maryland got almost $9 million in tax credits to pay their student loan debt. This tax credit for student loan debt is part of the program that has been running since 2017 and offers a great opportunity to residents struggling to pay off their student loan debt. Tax Credit For Student Loan Debt: What Is It? Last week, Governor Wes Moore announced that the Maryland Higher Education Commission had distributed nearly $9 million in 2022 tax credits to over 9,000 residents with student loan debt. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   “This program offers Maryland residents a critical advantage when looking for options to pay off student loan debt,” Gov Moore said in a statement. “These tax credits support student success through less debt.” As mentioned above, the program is not a new program. The program has distributed about $50 million in tax credits since it started in 2017. This year, the program awarded an average credit of $966 to over 9,300 residents, totaling $8,996,358. To qualify for the tax credit, taxpayers should have incurred a minimum of $20,000 in undergraduate and/or graduate student loan debt. Also, they should have a minimum of $5,000 in outstanding student loan debt to be eligible for the credit. Taxpayers will be able to claim the credit when they file their Maryland income tax return this year. In case the credit is more than the taxes owed, taxpayers will get a refund for the difference. Further, taxpayers who maintained Maryland residency for the 2022 tax year were qualified to apply for the credit. Recipients of the credit will be required to submit proof to the Maryland Higher Education Commission that they used the tax credit only for paying down the qualifying student loan debt. Who Gets Priority? To apply for the credit, taxpayers need to complete the Student Loan Debt Relief Tax Credit application. It must be noted that the application process is now closed for this tax year (2022).   Priority for the credit is given to taxpayers who didn’t get the tax credit in a prior year, were eligible for in-state tuition, graduated from an educational institution situated in Maryland, or have higher debt burden to income ratios. For more information on the tax credit for student loan debt, visit this link. Tax credits to help residents pay student loan debt is a useful and needed measure, especially at a time when prices are rising. In the fourth quarter of 2022, the total outstanding student loan amount was $1.76 trillion, compared to $1.73 trillion one year ago. As per the latest data from the Federal Reserve, 12% of adults with student loan debt are behind on their payments, while less than 1% of all student loan debt was at least 90 days delinquent or in default in the fourth quarter of 2022......»»

Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun Authored by Brandon Smith via Alt-Market.us There has been an avalanche of information and numerous theories circulating the past few days about the fate of a bank in California know as SVB (Silicon Valley Bank). SVB was the 16th largest bank in the US until it abruptly failed and went into insolvency on March 10th. The impetus for the collapse of the bank is tied to a $2 billion liquidity loss on bond sales which caused the institution’s stock value to plummet over 60%, triggering a bank run by customers fearful of losing some or most of their deposits. There are many fine articles out there covering the details of the SVB situation, but what I want to talk about more is the root of it all. The bank’s shortfalls are not really the cause of the crisis, they are a symptom of a wider liquidity drought that I predicted here at Alt-Market months ago, including the timing of the event. First, though, let’s discuss the core issue, which is fiscal tightening and the Federal Reserve. In my article ‘The Fed’s Catch-22 Taper Is A Weapon, Not A Policy Error’, published in December of 2021, I noted that the Fed was on a clear path towards tightening into economic weakness, very similar to what they did in the early 1980s during the stagflation era and also somewhat similar to what they did at the onset of the Great Depression. Former Fed Chairman Ben Bernanke even openly admitted that the Fed caused the depression to spiral out of control due to their tightening policies. In that same article I discussed the “yield curve” being a red flag for an incoming crisis: “…The central bank is the largest investor in US bonds. If the Fed raises interest rates into weakness and tapers asset purchases, then we may see a repeat of 2018 when the yield curve started to flatten. This means that short term treasury bonds will end up with the same yield as long term bonds and investment in long term bonds will fall.” As of this past week the yield curve has been inverted, signaling a potential liquidity crunch. Both Jerome Powell (Fed Charman) and Janet Yellen (Treasury Secretary) have indicated that tightening policies will continue and that reducing inflation to 2% is the goal. Given the many trillions of dollars the Fed has pumped into the financial system in the past decade as well as the overall weakness of general economy, it would not take much QT to crush credit markets and by extension stock markets. As I also noted in 2021: “We are now at that stage again where price inflation tied to money printing is clashing with the stock market’s complete reliance on stimulus to stay afloat. There are some that continue to claim the Fed will never sacrifice the markets by tapering. I say the Fed does not actually care, it is only waiting for the right time to pull the plug on the US economy.” But is that time now?  I expanded on this analysis in my article ‘Major Economic Contraction Coming In 2023 – Followed By Even More Inflation’, published in December of 2022. I noted that: “This is the situation we are currently in today as 2022 comes to a close. The Fed is in the midst of a rather aggressive rate hike program in a “fight” against the stagflationary crisis that they created through years of fiat stimulus measures. The problem is that the higher interest rates are not bringing prices down, nor are they really slowing stock market speculation. Easy money has been too entrenched for far too long, which means a hard landing is the most likely scenario.” I continued: “In the early 2000s the Fed had been engaged in artificially low interest rates which inflated the housing and derivatives bubble. In 2004, they shifted into a tightening process. Rates in 2004 were at 1% and by 2006 they rose to over 5%. This is when cracks began to appear in the credit structure, with 4.5% – 5.5% being the magic cutoff point before debt became too expensive for the system to continue the charade. By 2007/2008 the nation witnessed an exponential implosion of credit…” Finally, I made my prediction for March/April of 2023: “Since nothing was actually fixed by the Fed back then, I will continue to use the 5% funds rate as a marker for when we will see another major contraction…The 1% excise tax added on top of a 5% Fed funds rate creates a 6% millstone on any money borrowed to finance future buybacks. This cost is going to be far too high and buybacks will falter. Meaning, stock markets will also stop, and drop. It will likely take two or three months before the tax and the rate hikes create a visible effect on markets. This would put our time frame for contraction around March or April of 2023.” We are now in the middle of March and it appears that the first signs of liquidity crisis are bubbling to the surface with the insolvency of SVB and the shuttering of another institution in New York called Signature Bank. Everything is tied back to liquidity. With higher rates, banks are hard-pressed to borrow from the Fed and companies are hard-pressed to borrow from banks. This means companies that were hiding financial weakness and exposure to bad investments using easy credit no longer have that option. They won’t be able to artificially support operations that are not profitable, they will have to abandon stock buybacks that make their shares appear valuable and they will have to initiate mass layoffs in order to protect their bottom line. SVB is not quite Bear Stearns, but it is likely a canary in the coal mine, telling us what is about to happen on a wider scale. Many of their depositors were founded in venture capital fueled by easy credit, not to mention all the ESG related companies dependent on woke loans. That money is gone – It’s dead. Those businesses are quietly but quickly crumbling which also conjured a black hole for deposits within SVB. It’s a terribly destructive cycle. Surely, there are numerous other banks in the US in the same exact position. I believe this is just the beginning of a liquidity and credit crisis that will combine with overt inflation to produce perhaps the biggest economic crash America has ever seen.  SVB’s failure may not be THE initiator, only one among many. I suspect that in this scenario larger US banks may avoid the kind of credit crash that we saw with Bear Stearns and Lehman Brothers in 2008. But, contagion could still strike multiple mid-sized banks and the effects could be similar in a short period of time. With all the news flooding the wire on SVB it’s easy to forget that all of this boils down to a single vital issue: The Fed’s stimulus measures created an economy utterly addicted to easy and cheap liquidity. Now, they have taken that easy money away. In light of the SVB crash, will the central bank reverse course on tightening, or will they continue forward and risk contagion? For now, Janet Yellen and the Fed have implemented a limited backstop and a guarantee on deposits at SVB and Signature. This will theoretically prevent a “haircut” on depositor accounts and lure retail investors with dreams of endless stimulus.  It is a half-measure, though – Central bankers have to at least look like they are trying.  SVB’s assets sit at around $200 billion and Signature’s assets are around $100 billion, but what about interbank exposure and what about the wider implications?  How many banks are barely scraping by to meet their liquidity obligations, and how many companies have evaporating deposits?  The backstop will do nothing to prevent a major contagion. There are many financial tricks that might slow the pace of a credit crash, but not by much.  And, here’s the kicker – Unlike in 2008, the Fed has created a situation in which there is no escape. If they do pivot and return to systemic bailouts, stagflation will skyrocket even more. If they don’t use QE, then banks crash, companies crash and even bonds become untenable, which puts the world reserve status of the Dollar under threat. What does that lead to? More stagflation. In either case, rapidly rising prices on most necessities will be the consequence. How long will this process take? It all depends on how the Fed responds. They might be able to drag the crash out for a few months with various stop-gaps. If they go back to stimulus then the banks will be saved along with equities (for a while) but rising inflation will suffocate consumers in the span of a year and companies will still falter. My gut tells me that they will rely on contained interventions but will not reverse rate hikes as many analysts seem to expect. The Fed will goose markets up at times using jawboning and false hopes of a return to aggressive QE or near-zero rates, but ultimately the trend of credit markets and stocks will be steady and downward.  Like a brush fire in a wind storm, once the flames are sparked there is no way to put things back the way they were.  If their goal was in fact a liquidity crunch, well, mission accomplished.  They have created that exact scenario.  Read my articles linked above to understand why they might do this deliberately. In the meantime, it appears that my predictions on timing are correct so far. We will have to wait and see what happens in the coming weeks. I will keep readers apprised of events as new details unfold.  The situation is rapidly evolving. Tyler Durden Mon, 03/13/2023 - 23:20.....»»

Electric vehicles could radically change how leasing works as dealers try everything to get used EVs onto lots. Automakers and dealers might make EV lease contracts shorter in order to get those cars into the lucrative used EV market faster.Ram Only used electric cars priced under $25,000 can qualify for a used EV tax credit. That's a limited number of used EVs. Automakers might offer shorter lease terms on new EVs to get those cars into the used market sooner. Car buyers shouldn't be surprised if they run across shorter lease deals in the coming years for electric vehicles — and it could save them a lot of money.It's not very clear exactly how EV tax credits will shake out over the next few years — or how many vehicles will actually qualify for them as automakers race to meet their stringent requirements. So car companies are doing everything they can to tap into what the credits have to offer. That includes ultimately changing the length of leases to get more used EVs onto their lots that may qualify. Used EVs are eligible for a credit when they're priced at $25,000 or less. The credit is for 30% of the used EV's sale price, up to $4,000. The EV also needs to be from a model year at least two years earlier than the year in which it is bought.A lot of today's EVs are priced so high that they might not qualify for the used EV tax credit once they eventually make their way to the used market. The average new EV sold for $58,385 in January, according to Kelley Blue Book. A $74,000 Ford F-150 Lightning Lariat, for instance, is not likely to depreciate enough to drop below $25,000 in just a few years. Even with uncertainty around EV resale values, it would likely take longer. But perhaps a $46,000 base Mustang Mach-E would be more likely to fall to below that mark in three years' time. And automakers and dealers, in anticipation of what the used EV tax credit can do for them in terms of spurring demand with customers who might not consider an EV otherwise, might adjust their EV lease contracts accordingly.How EV leases could shiftCarmakers will have to be fine with giving a customer a multi-year lease for the more expensive EVs that they know they won't be able to resell with the used EV credit anytime soon. But for other, cheaper models, automakers want to profit off those cars as much as possible, so that might mean some unconventional lease terms. A move like this requires buy-in from customers. After all, a 36-month lease is typically the gold standard in the auto business. "Consumers haven't really shown a large appetite for really short-term leases," Tyson Jominy, J.D. Power VP of data and analytics, told Insider. But, "If you can tell someone, I can give you this vehicle for 6 months for $100 a month — sure, why not?" It might make sense for a Chevrolet Bolt, starting at around $27,500, to have as low as six to nine-month lease terms so that it can find its way to the used market sooner rather than later. That gives customers the opportunity to lease an EV for a short period of time and makes the used EV market more accessible. Shorter-term leases aren't far off from the vehicle subscription model, interest for which has fluctuated over the past several years. Do you work for a dealership? Currently in the market for an electric car? Have a story to share? Get in touch with this reporter at astjohn@insider.comRead the original article on Business Insider.....»»

Considerable strength in the U.S. banking system and steps taken by agencies will prevent more bank runs like SVB Financial Group and Signature Bank (SBNY). Over the weekend, two S&P 500 banks — SVB Financial Group and Signature Bank SBNY — failed, signaling the largest U.S. bank failures since Washington Mutual in 2008. Fear rattled  Wall Street, and indexes, including the S&P 500, the S&P Banks Select Industry Index and the KBW Bank Index tumbled 3.2%, 10.6% and 11.3%, respectively, since Wednesday end, indicating a broader sell-off in the banking industry.The weekend’s turbulence came after regulators closed Silicon Valley Bank on Friday and shares of its parent company, SVB Financial (the country’s 16th largest bank), fell more than 60%. On Sunday, regulators seized New York-based Signature Bank.We believe the market run-off in the past two trading days, sparked from the fears regarding the effectiveness of the U.S. banking system and a likely 2008-like crisis re-run, are overblown. The steps taken by U.S. regulatory agencies should be enough to calm the financial markets and offer reassurance that such shocks would be mitigated. Also, lenders’ weakness is not reflective of an industry-wide problem.Silicon Valley Bank Collapse a Unique EventIt appears that Silicon Valley Bank’s collapse was primarily due to poor risk-management decisions. The bank had significant deposits from the tech startup industry and invested these funds in long-term, fixed-rate, government-backed debt securities, exposing the bank to double sensitivity to higher interest rates. With the tech startup industry seeing a severe downturn, depositors started withdrawing significant funds. The bank was forced to dump some of its Treasuries at a loss of $1.8 billion to fund its customers’ withdrawals.Encouragingly, SVB Financial received acquisition interest from JPMorgan Chase & Co JPM and The PNC Financial Service Group, Inc. PNC over the weekend. Per a Reuters article that cited Axios, JPM and PNC, along with Apollo Management and Morgan Stanley, were part of a discussion to acquire SVB Financial in a deal that would exclude its commercial banking division, Silicon Valley Bank.In a move to avert chaos across the tech sector in the U.K., HSBC Holdings has agreed to buy Silicon Valley Bank UK Limited for a nominal £1. Noel Quinn, the CEO, said, “This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally.”U.S Agencies Take Steps to Prevent More Bank RunsAlso, on Sunday, the Treasury Department, the Federal Reserve and the FDIC said that all Silicon Valley Bank customers would be protected and able to access their funds deposited in the bank starting Mar 13. It must be noted that approximately 90% of SVB Bank customer deposits were not insured as per the FDIC rule, which covers up to $250,000 per deposit per bank.The agencies also announced a similar “systemic risk exception” for insured and uninsured customers of Signature Bank, giving access to all their deposits on Monday.“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.The Fed on Sunday announced a new expansive emergency lending program - the Bank Term Funding Program (BTFP) - in efforts to limit the contagion risk from small to large banks and shore up confidence in the banking system.The Fed's new U.S. bank funding program will allow banks and other eligible depository institutions (that need to raise cash to pay depositors) to borrow money from the Fed by posting securities as collateral rather than having to sell them significant losses.While the Treasury has set aside $25 billion to offset any losses incurred under the BTFP, the central bank does not expect to have that money, as the collateral securities have low default risk.A Slowdown in Rate Hike to the RescueJanet Yellen, the Secretary of the Treasury, noted that interest rate hikes by the Fed to combat “sticky” inflation were a key issue for the collapse of Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.In light of the recent volatility in the banking sector, markets no longer expect the pace of rate hikes to continue at Fed’s March meeting. According to CME Group, traders do not expect a 50-basis point rate hike in March and a 65% chance of a 25-basis point rate hike.While rising interest rates are a boon for banks, the current situation shows that faster rate hikes have their fall out. Last week, KeyCorp KEY, at an investors’ conference, revised its 2023 outlook for net interest income lower amid rising funding costs and deposit betas. Parting ThoughtsPost the 2008-crisis, the U.S. banking system that has undergone multiple stress tests by regulators, is in notably good shape and holds more capital than ever, indicating the ability to withstand even an economic slowdown. Lastly, even if banks did have to realize the losses like Silicon Valley Bank, it would not affect the solvency of most banks with small treasury books. Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in?  If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.>>Send me my free report on the top 5 EV stocksWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report KeyCorp (KEY): Free Stock Analysis Report Signature Bank (SBNY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

It turns out getting easy money at rock-bottom interest rates can come back to bite you if you're careless. More firms are about to find that out. A boat steers slowly through floating ice, and around icebergs, all shed from the Greenland ice sheet, outside Ilulissat, Greenland.AP/Brennan LinsleyThe Federal Reserve's prolonged period of low interest rates created many financial dislocations that are now flaring up.Case in point: Silicon Valley Bank imploded in a single day after surging interest rates caused it to sell a bond portfolio at a huge loss.The situation is an example of how low-interest-rate risk-taking can backfire as financial conditions tighten.The market on Friday watched as regulators shut the doors at Silicon Valley Bank, capping off a speedy decline and marking the biggest bank failure since 2008.The bank's collapse was a byproduct of the Federal Reserve's hiking of interest rates by 1,700% in less than a year. Once risk-free Treasurys started generating more attractive returns than what SVB was offering, people started withdrawing their money, and the bank needed a quick way to pay them. They were ultimately forced to sell their loan portfolio at a huge loss.The chaotic episode showed that the Fed's aggressive interest rate hiking regime could upend institutions that were once thought to be relatively stable. It appears that any rate sensitivity is about to be laid bare, and past risk-taking behavior held accountable."When you raise interest rates quickly, after 15 years of overstimulating the economy with near-zero rates, to not imagine that there's not leverage in every pocket of society that will be stressed is a naive imagining," Lundy Wright, partner at Weiss Multi-Strategy Advisers, told my colleague Phil Rosen on Friday.There are already two recent high-profile examples not specific to the banking system, but still indicative of the pressure being caused by higher rates.The first has been the collapse of the cryptocurrency market. Since the Fed started raising interest rates in March 2021, bitcoin — formerly a highly touted inflation hedge — has plunged more than 65%. This asset-price pressure helped contribute to the demise of FTX, which is facing criminal proceedings, and crypto bank Silvergate, which just this week went into liquidation. There's also been the double-digit decline in high-growth tech stocks over the same period.The big questions now become what rate-sensitive areas will be next to feel the pain, and whether there's any real risk of financial-system contagion. But before that, a bit of background.New rate cycle brings 'perfect storm' SVB's collapse is a perfect example of the kinds of dislocations that are exposed when rate cycles shift. Back in 2020 and 2021, tech startups were buzzing with sky-high valuations, stock prices were soaring to record highs on an almost weekly basis, and everyone was flush with cash thanks to trillions of dollars of stimulus from the government.In this environment, Silicon Valley Bank, which had became the go-to bank for start-ups, thrived. Its deposits more than tripled from $62 billion at the end of 2019 to $189 billion at the end of 2021. After receiving more than $120 billion in deposits in a relatively short period of time, SVB had to put that money to work, and it's loan book wasn't big enough to absorb the massive influx in cash.So, SVB did a normal thing for a bank — just under terms that ended up working against it. It purchased US Treasury bonds and mortgage backed securities. Fast forward to March 16, 2022 when the Fed embarked on its first interest rate hike. Since then, interest rates have soared from 0.25% to 4.50% today.Suddenly, SVB's portfolio of long-term bonds, which yielded an average of just 1.6%, were a lot less attractive than a 2-year US Treasury Note that offered nearly triple that yield. Bond prices plunged, creating billions of dollars in paper losses for SVB.Ongoing pressure on tech valuations and a closed IPO market led to falling deposits at the bank. That spurred SVB to sell $21 billion of bonds at a loss of $1.8 billion, all in an effort to shore up its liquidity but which essentially led to a run on the bank. As Deutsche Bank analysts put it on Friday, shortly before regulators stepped in:"It is not a stretch to say that this episode is emblematic of the higher-for-longer rate regime we appear to be at the start of, as well as inverted curves, and a tech venture capital industry that's been seeing much tougher times of late. The perfect storm of all the things we've been worrying about in this cycle."What's next? Is there risk of contagion?When it comes to representing the risk of aggressive low-interest-rate behavior, SVB is the latest and greatest example, and the tip of a bigger iceberg of rate-sensitive areas. So which ones are especially at risk?Commercial real estate should be a a top worry for investors because there is more than $60 billion in fixed rate loans that will soon require refinancing at higher interest rates. Additionally, there is more than $140 billion in floating rate commercial mortgage backed securities that will mature in the next two years, according to Goldman Sachs."Floating rate borrowers will have to reset interest rate hedges to extend their mortgage, a costly proposition," Goldman Sachs chief credit strategist Lofti Karoui said in a recent note. "We expect that delinquencies will pick up among floating rate loan borrowers, particularly on properties such as offices facing secular headwinds."And there have already been some sizable defaults in commercial real estate this year, with PIMCO's Columbia Property Trust recently defaulting on a $1.7 billion loan tied to commercial real estate in Manhattan, San Francisco, and Boston.The stock market is taking notice as well, with shares of office REIT companies like Alexandria Real Estate Equities, Boston Properties, and Vornado Realty Trust all falling more than 5% on Friday. Shares of Boston Properties fell to its lowest level since 2009, while shares of Vornado hit its lowest level since 1996. If this sounds grim, fear not: despite all of the drama, it's hard to see the downfall of SVB leading to lasting damage across the wider financial sector for two main reasons. First, banks are extremely well capitalized thanks to strict post-Great Financial Crisis banking rules. Second, few banks have such a concentrated exposure to risky start-up companies like SVB.But there is something that all banks need to pay close attention to, and that's the risk associated with higher interest rates and its impact on their deposit levels, fixed-income holdings, and earnings.Signs have already begun to emerge that firms especially reliant on deposits could soon be under pressure. Deposit outflows have ramped up across all FDICinsured institutions in recent months as customers opt for higher-yielding treasury bonds and money market funds.It was ultimately the deposit-reliant nature of SVB's balance sheet that left it so vulnerable. Once people started yanking their money out, it was over.And perhaps most ominously, SVB likely isn't the only bank that's sitting on billions of dollars of paper losses on their bond portfolio, so watch out for further rate-driven ripples."Silicon Valley Bank and First Republic have emerged as the first cases of banks with business models and balance sheets that are ill-prepared for a rising interest rate environment and the ever-growing risk of a recession," Levitt told Insider. "Investors, smelling blood, then turn their attention to the next bank exposed to interest rate risk and specific credit risk, and then the next."Read the original article on Business Insider.....»»

S&L Crisis 2.0? Uncle Sam's Short-Term 5% UST Is Sucking Capital Out Of Banks Excerpted from Larry McDonald's 'The Bear Traps Report', Wall Street Banks just spent the last four weeks selling investors on a soft - NO landing scenario -- There are rare moments of social risk awareness in markets where everyone is huddled on the wrong side of the boat, and when the migration starts, the broad belief system flips and the swing can be very violent. We are here NOW... Back to the Future It´s a lot more like the late 80s (S&L Crisis), than 2008. Most of the risk is spread out across hundreds of regional banks. Tertiary financials -- like ALLY above -- are important leading indicators. At 19x earnings, now... most of us can see an air pocket of the face of the S&P 500, hello 13x, next stop. Available-For-Sale Securities AFS is the term of the day - On the balance sheets of the regional - KRE Banks - there are hundreds of billions of dollars of AFS --- "available for sale securities" --- (US Treasuries, mortgage-backed securities, and high-quality investment grade corporate bonds). For YEARS these assets NEVER had to be marketed to market -- they NEVER MOVED in price. Regional bank executives look more like your local -- overweight car salesman than Wall St. risk managers. They are sitting on hundreds of billions of dollars of assets that FOR DECADES NEVER moved in price. Now you have a US 2-year treasury near 5% vs. 3% in August -- there is an elevator shift drop in prices here, NOT marked to market at the banks. We are told the macro-prudential risk crowd inside the NY Fed has been annoyed that FCIs (financial conditions) have NOT tightened all that much considering 5% front-end rates (tightening FCIs act like a fire hose on an inflation fire). We are hearing, the NY Fed (with the FDIC and OCC) is now forcing the regional banks to mark their collection of toys to market. If you include HELOC, Auto loans, Commercial real estate, and MBS - the losses must be $1T across the regional banking ecosystem. Raising rates 500bps in 14 months comes with a price, it´s NOT free. The brainless lunacy of Wall Street "economists" calling for a soft - NO landing with this kind of interest rate risk turning into credit risk - BLOWS ONE's MIND!!! ***To make matters worse, Tbills at 5% are sucking billions a day out of regional banks... Deposit Beta Again, for decades -- the "Deposit Beta" moved at 5mph, now 100mph. Regional Bankers are slow-moving, local -- sleepy fellows. As the Fed has juiced front-end rates, regional banks have NOT adjusted their bank deposit yields to keep up! Precious capital is running out to the banks faster than a LA Lakers full-court press. Some banks are being forced to liquidate AFS securities and sell stock to raise cash urgently with a massive dilutive impact. Stay tuned. S&L Crisis 2.0 Nasdaq banks weekly chart. Just a jaw-dropping disaster. Sliced through key support at the 200-week moving average (yellow line) like it wasn't even there. VERY pre-crashy. As one NY PM told McDonald: "Banks have been very quiet about these risks for months." What SIVB is telling us: 1) deposit data - run off zero cost deposits - deposits flight, run on deposits, deposit beta much faster, Uncle Sam's short term 5% UST is sucking capital out of banks!!!!!!!!!!!! 2) interest rate risk - mark to market available for sale securities, funding mismatch, bottom line fed hiking 500bps in 14 months is showing UP HERE!!!!!!!!!!!! "Maybe that whole zero interest rate and QE thing wasn't such a good idea..," exclaimed another NY PM. Breaking "news": 500bps in 14 months comes with a price, it´s NOT free --- Anything can happen, but when the banking sector breaks down like this, it usually last more than a day - like weeks or months. The Fed MUST be getting hysterical calls. They are aware. Just like a deer in headlights is aware before it is killed by a truck. Memories of Non-Liquidity "Our liquidity position is strong, we are adequately capitalized." - Alan Schwartz, Bear Stearns, March 2008 McDonald ends with a very aggressive forecast: We think the Fed cuts rates 100bps by September. We can only imagine the level of market stress required for that to come to pass. Brace! "Black Monday?" -- PM NY Tyler Durden Fri, 03/10/2023 - 09:00.....»»

Some Texas residents could get a tax rebate going forward if a new proposal is approved. This new proposal calls for giving property tax credits from Texas depending on factors that some consider controversial. Specifically, the proposal aims to give tax credits to qualifying married couples based on the number of children they have. Property […] Some Texas residents could get a tax rebate going forward if a new proposal is approved. This new proposal calls for giving property tax credits from Texas depending on factors that some consider controversial. Specifically, the proposal aims to give tax credits to qualifying married couples based on the number of children they have. Property Tax Credits From Texas: Who Could Get Them? Texas state Rep. Bryan Slaton recently introduced a proposal (HB2889) that would give property tax credits from Texas to qualifying married couples. The bill defines a married couple as “a man and a woman who are legally married to each other, neither of whom have been divorced.” .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   "I come from East Texas. We have biblical values there where we want people to get married, stay married, be fruitful and multiply," Slaton said. If approved, qualifying families with four qualifying children would get a 40% property tax credit. The tax relief would increase by 10% for every additional qualifying child, while a couple with ten or more children would result in a 100% tax credit. Slaton notes that he is worried a "little bit" about the state’s birth rate and this credit would encourage a “healthy family unit.” The tax relief would continue even when the kids become adults. "I think we need to incentivize more children,” he said. Who Won’t Qualify For The Credit? Although the proposal seems to be a step in the right direction, it does encourage discrimination. The property tax credits from Texas won’t be offered to all families; rather, only heterosexual couples would qualify for it. It means that those who have divorced at least one partner won’t qualify for the credit. Also, the bill excludes LGBTQ+ people from receiving the credit. Also, couples with adopted children or those who had children before they were married won’t get the credit for those children.   Owing to such exclusions, many believe that this proposal is not constitutionally valid at the state or federal level. This legislation also seems to be against the Supreme Court ruling that gives people the right to marry any person of their choice. In response to the opposition, Slaton noted that children do better “when they have their mother and their father in the same home with them.” And on whether the legislation is legal or not, he said, "We can have that discussion, and they can have that discussion in court." This is not the first time Slaton has openly opposed LGBTQ+ matters. Last Summer, Slaton wanted to ban kids from attending any performance involving drag queens. This month, he came up with a proposal to classify gender-affirming health care for trans youth as child abuse under state law. “Drag shows are no place for a child. I would never take my children to a drag show…,” Slaton tweeted at the time......»»

The loophole means customers who lease can still get a discount, while dealers who pass along the savings also get a boost. Lucid is one of the companies that has offered customers a monthly savings if they lease one of their EVs.Lucid Overall, EV leasing is down, but the Inflation Reduction Act might change that. Automakers might pass along the commercial EV credit to customers that lease their EVs. Car companies that have shared the credit to lessees are already seeing business grow. Automakers using the loophole that incentivizes car shoppers for leasing an electric vehicle have seen their leasing business skyrocket — and it might be a secret jackpot for the transition to electric.Last summer's Inflation Reduction Act introduced rules for new and used EVs to qualify for crucial tax credits. As of today, less than a dozen pure electric vehicles qualify for the de facto new EV discount, and that is expected to shift with more rules from the IRS. But for vehicles that don't meet the sticker-price stipulations, 'Made in America' requirements, or other factors outlined in the law (and thus, don't qualify for those credits), there's a third option.  An automaker or its in-house finance arm can tap into the available commercial EV credit by leasing electric cars (that otherwise wouldn't qualify) to customers. This credit, which was designed to encourage commercial fleets to go electric, goes to the company that owns the vehicle. The credit is $7,500 for vehicles that weigh less than 14,000 pounds, and $40,000 for all other commercial EVs.An automaker can opt to keep the credit it earns from owning the EVs that it leases. Or, it can pass that along to the customer through the form of a lower monthly lease payment. The auto companies passing it along have seen business surge. It's especially interesting as car leasing trends downward, with EV leasing no exception. Only 12.6% of new EVs were leased in 2022, down from 26.5% in 2021, according to Experian.Which car companies are sharing the credit with customers?Startup Lucid, along with at least 10 "traditional" automakers, are leveraging the commercial credit, according to data from J.D. Power. Mercedes-Benz, Volkswagen, Chrysler, Jeep, Genesis, and Volvo are doing so through lease bonus cash. Audi, Mitsubishi, Lexus, and Toyota have other types of bonuses. Of note, the brands J.D. Power shared that are utilizing the commercial credit are largely non-domestic and would likely have a harder time qualifying for the new EV purchase credit stipulations than the homegrown auto brands. Automakers that passed along the amount in some capacity saw EV leasing penetration grow from 25% at the start of this year to 52% in early February. "Even in the old days, 45% would have been a remarkable penetration for leasing," Tyson Jominy, J.D. Power vice president of data and analytics, told Insider last month.On the flipside, the automakers that aren't passing the credit along have seen relatively flat EV leasing penetration hovering around 8% to 10% over the past few months.Leasing could be just what the EV industry needs As the auto industry races to accelerate EV adoption as it pours $1.2 trillion into the transition over the next several years, leasing could be a key component for both consumers and car companies.Consumers may want to lease EVs as a way of trying the tech without committing to a costly purchase while battery tech is still improving and depreciation is uncertain. Meanwhile, automakers are interested in leasing EVs in part due to the commercial and used EV tax credits. Being able to pass along the commercial EV credit could bring in customers that might not have otherwise considered electric. Getting those vehicles back after their lease — and putting them into the used market — opens opportunities to bring more customers in via the used EV credit.      Read the original article on Business Insider.....»»

The 2-Year Yields 5%... So What? By Peter Tchir of Academy Securities The 2-Year Yields 5% - So What Away from zero day to expiration options (0DTE), everyone in the market (and beyond) seems fixated on 2-year yields. There are about 100 iterations of the following question: Shouldn’t I just put my money into 2-year treasuries? They are yielding 5%, after all? Where to invest on the yield curve is always on my mind, but suddenly everyone seems to be talking about the 2-year. Not just bond “geeks” but mom and pop investors. Not just about where on the yield curve, but as part of every asset allocation conversation. Bob Pisani and I spoke last night for this CNBC piece on “tech and quality stocks” and he also mentioned he was being inundated with calls, from unlikely corners about the investment merits of the 2-year Treasury. To me, there are several questions that need to be answered, to determine how much weighting you should have in the 2-year Treasury relative to normal: What is the right mix between stocks and bonds. Within bonds, what is the right mix between credit risk and rate risk. Within rate risk, where on the curve do you want to be. I feel compelled to discuss this, because on major thesis making its way around market is that: Everyone will sell equities to buy the 2-year Treasury. I feel compelled to fight against that. The Best Time to Buy the 2-Year was at 0.3% This is backward looking, but worth thinking about. The 2-year, broke below 0.3% in March of 2020. The first time it traded above 0.3% was at the end of September 2021. The 0.25% bond, issued 9/30/21 is trading at 97.25% of par right now. Not a particularly good investment in its own right, but… The 2% bond that was the on the run long bond then, is trading at 67.5% of par – a loss, orders of magnitude larger than buying the 2 year. The Nasdaq 100 is “only” down 21% since then, and ARKK, which was a “must have” “special sauce” for any investor is down almost 70% since then. When people were chasing yield and return any way they could, no one wanted the “measly” yields provided by the 2-year. TINA (There Is No Alternative) and FOMO (Fear Of Missing Out) ruled the day (the Nasdaq 100 peaked in December 2021 and ARKK peaked in March 2021). The “right” trade, for buy and hold type of investors (anyone with a 1 to 2 year time horizon) would have been to buy the 2-year Treasury when it was yielding next to nothing, not because it provided a “solid” return but because it had far less downside (and upside) than other choices. Buying the 2-Year only To Chase Stocks up 7% I know that no one who reads the T-Report, and I swear it won’t happen to me, but one path seems so obvious to me, that I feel I need to mention it: Buy the 5% yield today. Watch stocks rise 7% in 3 months. Sell bonds, having earned about 1.25% (a quarter of carry) while missing a 7% rally in stocks. Yes, I understand that people are buying the 2-year because they are afraid stocks will fall further. But none of us “know” which way stocks will go next. What I feel comfortable “predicting” is many of the people buying bonds instead of stocks today, will be “forced” to buy stocks higher, if they move higher and in many cases will be too afraid to buy stocks lower if that happens. I’ve been bearish stocks off and on for the past 2 years. I have no trouble trading stocks, or bonds (in fact that is what in theory I’m paid to think about). But if you asked me “What will provide the greater return in 2 years, the 10% from holding the Treasury or a stock investment?” I’d have to go with stocks. How I’m Thinking About the Opportunity I’m going back to the three questions I posited at the beginning of this rant. What is the right mix between stocks and bonds? Currently I like risk assets here (see Sunday’s TGFF T-Report). I think there is upside for stocks. Am I concerned that people are selling stocks to buy bonds? Sure, but will that help any squeeze? Definitely. So, I’d be overweight risky assets (more stocks than credit). Within bonds, what is the right mix between credit risk and rate risk? I’m comfortable with credit risk. I’d be overweight credit risk (particularly IG Corporate and senior tranches of CLO risk) relative to treasuries. If you lean towards high yield, leveraged loans, CBMS, junior tranches of CLO’s, then I’d count that against my equity allocation (as there is a risky element that will correlate well to equities). So that leaves me with a smaller than normal weighting in rate risk. Within rate risk, where on the curve do you want to be? Now this is a trickier question and I could easily see over-allocating, even significantly over-allocating to the 2-year. For the moment, let’s move to the 3-year, because there are 3, 7 and 10 year on the run treasuries. Today, the 3-year yields 4.7% (not as “fun” as 5% but a bit more duration). The 7-year is at 4.2% and the 10-year is at 4%.The 7 year bond, 3 years forward is at 3.6%. So if you buy the 3 year bond today, the 7 year bond, in 3 years, when this 3 year matures would need to be 3.6% to match the total return of just investing in the 10 year bond today (wow, when I write it, is seems way more complicated than it really is). Buy a 3 year bond today. In 3 years, re-invest those proceeds in a 7 year bonds, versus buying a 10-year bond today. Do you think the 7 year bond, in 3 years, will be lower than today’s 7 year bond by about 0.6%? Would a longer term, “stable” rate for Fed Funds be around 3% or so? If they get inflation under control, why not? If inflation runs at 2% at some point in the next few years, then a 1% real rate, gets us to 3% without any sort of term premium. Right now, I actually like, even with the inversion of 110 bps between 2s and 10s, I think I prefer the duration. Yes, a flatter yield curve would be nicer. I do think the curves should be less inverted. I’d run a shorter duration portfolio than normal, but I would NOT be 100% into the 2-year. With so many wildcards out there, many of them Geopolitical (See our Geopolitical Summit West Summary) I’m not completely afraid of owning some duration. Funding Cost and The Great Financial Crisis I will never, ever, ever forget that in the early days of the financial crisis, a bunch of attempts were made by policy makers to make it easier and cheaper to fund mortgage backed bonds (MBS squared, ABX, etc, all the stuff of “The Big Short” fame). Every announcement lead to a pop in asset prices, that was quickly faded as it doesn’t matter if I’m saving 2% per annum on funding on a position that is leveraged and is dropping 1% a day! Today’s argument is a bit of a corollary to that, but funding and yields and carry aren’t the be all and end all. Returns drive everything! Just like lower yields couldn’t avert the MBS mess, I don’t think higher yields can completely stop markets (I will be bearish risk again, but I’m not right now, and fear of people selling stocks to buy the 2-year is not high on my list of bearish worries). Bottom Line The 2-year treasury above 5% makes for some great headlines and is an easy one for the nightly news to glom on to. There is an appeal to 5%, but it is a bearish trade. Does it impact how I position my portfolio? Yes, but only at the margins. It is not a panacea. Maybe it will turn out to be the “right” trade, but this is setting all of my contrarian alarm bells off, and is another reason I’m comfortable being long risk here, hoping for another leg higher as people get forced into the market.  And yes, I might be buying the 2-year at 4.75% in a week with stocks down 5% and my tail between my legs, but that is the positioning I’m most comfortable with right now. Tyler Durden Wed, 03/08/2023 - 15:29.....»»

Michigan Gov. Gretchen Whitmer, on Tuesday, signed a tax relief bill that will benefit working and retired residents. Although this Michigan tax relief bill doesn’t include the expected $180 inflation relief checks, it does fulfill two major promises that Gov. Whitmer made when she announced her Lowering MI Costs Plan earlier this year. Michigan Tax […] Michigan Gov. Gretchen Whitmer, on Tuesday, signed a tax relief bill that will benefit working and retired residents. Although this Michigan tax relief bill doesn’t include the expected $180 inflation relief checks, it does fulfill two major promises that Gov. Whitmer made when she announced her Lowering MI Costs Plan earlier this year. Michigan Tax Relief Bill: What Does It Offer? On Tuesday, Gov. Whitmer signed into law a new tax package that boosts tax credits for working families, as well as offers relief to seniors. Specifically, the Michigan tax relief bill expands the Earned Income Tax Credit for lower-income workers and repeals the so-called pension tax on retirement income. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   “Back in 2011, the retirement tax was slapped on, and the Working Families Tax Credit was gutted to balance the budget. A single bill dealt a critical blow to people’s finances," Whitmer wrote on Facebook. "Today, we are making it right." Gov. Whitmer’s tax relief bill significantly boosts the state’s Earned Income Tax Credit from 6% of the federal credit to 30%. This means if a taxpayer previously was eligible to take $150 off from being taxed through the EITC, they will now qualify for $750 of their income not taxed. Last year, the state’s version of the EITC ranged from $34 to $416 and averaged $150. Now, the credit is estimated to range between $168 and $2,080, with an average of $750. Boosting the Earned Income Tax Credit could benefit 738,000 residents who qualified for the credit in 2019. Expanding the EITC is expected to cost the state about $883 million in the fiscal year 2024 and about $441 million in future years. This expansion to the EITC will take effect in the 2023 tax year, and thus, would impact filings in 2024.   Pension Tax Changes Talking about the pension tax, the Michigan tax relief bill restores a full tax exemption on pension income. The new bill, specifically, restores a 2011 tax over the next four years. Starting in the tax year 2023, taxpayers will have the option to either benefit from the phased-in pension exemption or continue to claim an existing exemption for any type of retirement income. It is estimated that repealing the pension tax will result in an average savings of $1,000 for 500,000 households that have pension income. Repealing the pension tax is estimated to cost the state about $281 million next year. $180 Inflation Relief Checks: Why Are They Missing? Although boosting the EITC and repealing the pension tax is a big win for Democrats, they, however, failed to win support for the $180 inflation relief checks that the governor proposed earlier. It must be noted that the legislation that Gov. Whitmer signed Tuesday does call for immediate $180 inflation relief checks. The inflation relief checks provision, however, will be valid only if the law takes effect by April 18, something that is highly unlikely because the Senate Republicans denied the bill the supermajority it needed for it to go into immediate effect......»»

"If It Ain't Bork-en, Don't Fix It" By Michael Every of Rabobank Yesterday’s Daily, Grauniad-style, mixed up the linear order of Mel Brooks’s ‘The History of the World Part I and II’. However, its core arguments that: (1) inflation is more complicated than “it’s demand!”, which it clearly isn’t, or “it’s supply!”, which it also clearly isn’t; and (2) that US firms are collectively raising prices because they can, and then workers are trying to match via higher wages, gets things in the right order. Linking that argument and typos, while Bloomberg covers yesterday’s hawkish semi-annual testimony as ‘Bond Traders Fear Powell Willing to Break the Economy’, I would say the key message was actually, “If it ain’t Bork-en, don’t fix it.”   Bloomberg was talking about further repricing of Fed Funds futures higher and the US yield curve flatter that followed Powell (indirectly) flagging that not only could Fed funds indeed hit 6% this year, but that a step back up to a 50bps move again is a real possibility in March. ‘Who knew?’, says the guy mocking disinflation and pivot calls since the start of the year. And as our also never-timorous Fed watcher Philip Marey argues in ‘Be prepared’, this Friday’s payrolls report and then Tuesday’s CPI print will determine whether we get a 25bps or 50bps hike at the March 21-22 FOMC meeting. Moreover, he adds: “For those who are getting fear of heights, we would like to point out that a 6.0% federal funds rate may seem high, but when core CPI inflation stands at 5.6%, it is only barely positive in real terms. In fact, the current real federal funds rate is still negative. More importantly, if we look at interest rates that are relevant to aggregate demand, a 10-year US treasury yield of close to 4% is still a negative rate in real terms. So what is all this talk of a restrictive monetary policy stance? And who is still afraid of heights? In fact, if longer term interest rates remain too low to slow down the economy and squeeze inflation out of the system, the federal funds rate may even have to go higher than most of us can currently imagine. A federal funds rate of 7 or 8% may seem incredible right now, but how long ago was it that 6% seemed impossible?” My “Bork-en” comment refers to the legacy of US jurist Robert Bork, who believed bigger was always better in firms for consumers, and who set the tone for a generation or more of neoliberal refusal to act on US anti-trust ‘because lower prices’. His argument always made as much sense to me as the Swedish Chef --“We poot de oligooopoly in de pooot… we get de leew inflootion in de poot…  bork, bork, bork!”-- but I wasn’t setting US regulatory policy, just watching The Muppets. Now we have such concentrated corporate power that large firms can collectively raise prices when supply shocks give them cover, and are able pay higher nominal wages too. So, roughly, +10% on commodities > +10% on shelf prices > +7% on wages = +10% in nominal sales growth with a little consumer credit…. and let the economists and central banks worry about the ‘real’ problem. Bloomberg says markets fear Powell will see the economy broken, and indeed oil, stocks, short-dated Treasuries (2-year yields hitting 5% for the first time since 2007), and non-dollar FX plunged as he spoke, so he hit all his ducks except the US long end (for now). Yet what stocks should fear is things being fixed so they aren’t Bork-en, which involves smashing corporate concentration like crypto was. The oligooopoly argument means there isn’t any other choice if you want to bring inflation down and keep it down. Otherwise, firms can continue to collectively raise prices every time supply shocks give them cover – and such supply shocks are here to stay. Breaking up corporate concentration is not a process monetary policy can drive, even via a deep V-shaped recession: such a downturn could even increase corporate power as smaller firms go under. What is needed is a grinding process of antitrust de- and re-regulation. Yet from the Fed’s perspective, it still implies very high rates for a very long time: the latter still seems to be confusing markets, who have only just woken up to the former. Of course, some see supply shocks are over, which would help central banker: but I disagree. For example, the RBA tried to please mortgage holders yesterday by dovishly hiking 25bps to 3.60% and saying “inflation had peaked”. As flagged ahead of time, such a ‘pivot’ already looks silly given what Powell just said: yet Governor Lowe followed it up with a speech today saying he is close to a pause and won’t follow the US lead. A$ is responding as one would expect, now down at 0.6588 (and heading to its recent low of 0.6199?), helping to push imported inflation up. The concentrated power of mortgages was underlined by the Sydney Morning Herald’s and The Age’s shocking early Tuesday front pages --“Red Alert: War Risk Exposed” and “Australia ‘must prepare’ for threat of China war”, which former Aussie PM Keating attacked as “the most egregious and provocative news presentation of any newspaper I have witnessed in over fifty years of active public life.”--  both switching to cover the extra 25bps on monthly bills, or rents, ‘because landlords can’. Indeed, The Age flipped to noting “Lowe to meet mental health body as home-owner stress rises” But that five national security experts claim Australia could find itself at war with China within three years, is totally unprepared for it, and is being misled about this fact by its leaders, suggests supply-side inflation, and demand-side to Das Boot, will linger longer than Lowe will admit. So does the fact that concentrated corporate power is one of the key reasons another report says the US is not fit for a Great Power struggle; and that just as China’s new foreign minister yesterday warned the US and China could face “confrontation and conflict” if the White House does not change course away from “all round suppression and containment.” Leland Miller of @ChinaBeigeBook yesterday went so far as to state on CNBC that policymakers and businesses need to take the tail risk of a “catastrophic” confrontation over Taiwan seriously, that contingency measures need to be taken urgently, and “if you don’t have a Plan B right now, you are off on a ledge, and on a dangerous ledge.” On which, China --where imports continue to fall and the trade surplus climb-- just unleashed its largest regulatory revamp in decades, as the press puts it: but they called Common Prosperity “regulatory reform”. There will be a new agency to police all data; a new financial regulator separate from the PBOC for most assets; and a far greater focus on self-reliance in science and technology, with 5% of positions in central government departments to be cut(!) to allow reallocation to focus on strategically important areas. Consider the enormity of that and tell me things are going back to the new normal. Yes, separately China is flagging support for private businesses - if they are “healthy and high quality”; as decided by the CCP, against a background of whole-of-economy resistance to US economic encirclement. Just because the Fed doesn’t talk about all of this, doesn’t mean it doesn’t matter for the US economy and the FOMC: obviously it does. And it doesn’t argue for lower rates or sustained lower inflation ahead, even if the economy slumps, because our global system is both broken and Bork-en. I wish somebody could fix it. Tyler Durden Wed, 03/08/2023 - 11:10.....»»

Business owners who claim the ERC when they don't actually qualify would be on the hook for a substantial amount. That's only one of the reasons the IRS is warning businesses to tread carefully with the tax credit......»»

The Toyota Tacoma, Ford Bronco, and Honda Civic will depreciate far less than most vehicles, according to Kelley Blue Book. See the full list. The Ford Maverick, Toyota Tacoma, and Tesla Model X are some of the best new cars for minimal depreciation, Kelley Blue Book says.Ford The average new car bought in 2023 will depreciate by more than half in five years, according to Kelley Blue Book.  But some cars hold their value much better than others, according to a new study from the research firm.  Toyota, Ford, and Tesla make some of the best cars for shoppers worried about depreciation.  A new car starts depreciating the second you drive it off the lot. But some models hold their value over time better than others.Borrowers with poor credit may qualify for a loan more easily through a captive lender.PeopleImages/Getty ImagesKelley Blue Book on Sunday released its annual Best Resale Value Awards, recognizing the new cars, trucks, and SUVs that put the most money back in their owners' pockets after years on the road.Hyundai SUVs at a car dealership.AP Photo/David ZalubowskiThe average new vehicle will only be worth 45% of its starting price five years down the line, the automotive research firm says.A Toyota dealership in Florida.Joe Raedle/Getty ImagesBut it projects that the 10 2023 models it chose for this year's top awards will fare better than 95% of the car market, retaining 65% of their value over the same period.A used car lot is shown Friday, June 10, 2022, in Salt Lake City.Rick Bowmer/AP Photo9 (tie). Jeep GladiatorJeep Gladiator Mojave.JeepFive-year resale value: 61%Read more: After driving 22 electric cars, these are the 3 I'd steer clear of 9 (tie). Subaru CrosstrekSubaru Crosstrek.SubaruFive-year resale value: 61%8. Ford Maverick2022 Ford Maverick.FordFive-year resale value: 61.7%Read more: Hyundai's low-cost, long-range sedan is shaping up to be a major pain for Elon Musk7. Honda CivicThe 2023 Honda Civic sedan.HondaFive-year resale value: 62.5%6. Toyota 4RunnerThe 2023 Toyota 4Runner.ToyotaFive-year resale value: 64.4%5. Chevrolet CorvetteThe Chevrolet Corvette.ChevroletFive-year resale value: 65.3%Read more: Elon Musk has promised self-driving Teslas for years. Experts say it's not even close.4. Ford BroncoThe Ford Bronco Everglades.FordFive-year resale value: 65.4%2 (tie). Tesla Model XTesla Model X.TeslaFive-year resale value: 66% 2 (tie). Toyota TacomaThe Toyota Tacoma.ToyotaFive-year resale value: 66%Read more: I drove Mercedes-Benz's $135,000 Tesla rival and experienced the electric, screen-filled future of luxury SUVs1. Toyota TundraThe 2023 Toyota Tundra.ToyotaFive-year resale value: 73.3%Read the original article on Business Insider.....»»