Bitcoin News Australia

Normally, bank runs are something investors run away from. Not this group. 

Porticoes Capital, a blank-check company, is seeking to buy failed lenders that are closed by the Federal Deposit Insurance Corporation, according to regulatory filings reported on by the Financial Times. 

Run, Bank, Run

Last spring wasn’t the best stretch for US regional banks. Not only were smaller lenders taking on too much risk via uninsured deposits, but like everyone else, they were also facing rising interest rates and falling commercial real estate asset values. When anxious clients withdrew deposits from one bank, the panic spread to others. 

In a matter of weeks, Silicon Valley Bank, First Republic Bank, and Signature Bank all collapsed. By the end of the year, Iowa’s Citizens Bank and Kansas’ Heartland Tri-State Bank had folded as well. (The latter’s demise was also helped by the CEO’s alleged “pig butchering” scheme.)

Porticoes’ structure is much like a SPAC, in that it’s not an operating company and is simply looking for a bank to buy. On the other hand, it’s not looking to go public and its only FDIC-approved path is to buy failed banks. While all those that failed in 2023 are no longer on the market, Porticoes wants to be ready if 2024 sees a repeat:

• Federal Reserve Chair Jerome Powell recently said the decline in the value of commercial real estate will continue to hurt banks. “This is a problem we’ll be working on for years more, I’m sure. There will be bank failures,” he told the Senate Banking Committee. “It’s not a first-order issue for any of the very large banks. It’s smaller and medium-sized banks that have these issues.”
• Though an extreme outcome, one study conducted by CBRE last year reported that if the commercial real estate market continues to fall, it could result in 300 banks failing in the near future, most of which are community lenders but there is at least one major institution in there as well.

China has eclipsed the rest of the world in solar panels. 

The country’s policy of heavily subsidizing its solar panel industry means that domestic US manufacturers can’t keep up with cheap imports pouring into their market, the Financial Times reported Wednesday. 

Outshining Everyone

China is the solar industry’s 500-pound gorilla, so much so that the International Energy Agency predicts the country will maintain an 80%-95% market share until at least 2028. The European Union is trying to slap tariffs on Chinese electric vehicles precisely because it feels it was burned by a flood of cheap solar panels that crowded out domestic competition. Despite US tariffs on imported Chinese solar panels and cells, they’re still significantly cheaper. The US imported a record amount of panels from January to November last year, according to the FT.

For US manufacturers, the surfeit of imported panels is inducing an intense whiplash, as many embarked on ambitious projects in the wake of the Biden administration’s Inflation Reduction Act (IRA) in 2022. Now, however, those projects are being scaled back, per the FT’s report:

• Bill Gates-backed manufacturer CubicPV said last month it was abandoning plans to build a new factory. CubicPV specifically makes silicon “wafers,” a vital component of solar cells, but the price of wafers has fallen 70% since the IRA was passed, Reuters reported.
• Mark Widmar, CEO of the US’ biggest solar manufacturer First Solar, told the FT that the US industry is in a “pretty dire situation,” adding: “If we become Europe, where we just open up the floodgates and China just overwhelms this industry, it’s going to be devastating.”

Africa is the world’s next great emerging market, and Visa and Mastercard are charging right in.

The two credit card giants have poured hundreds of millions of dollars into various investments on the continent, from promising fintech startups to the broader payments ecosystem, according to a Rest of World feature published Wednesday.

Give ‘Em Credit

The goal for both Visa and Mastercard is simple: enmesh themselves in every nook and cranny of the massive, disparate digital payments ecosystem emerging across the massive continent. “[The two US companies] make money when there is a transaction made with the card, so their ambition is to get more and more people in Africa to use their own cards, and for that, they need the help of fintechs,” Ismail Belkhayat, founder and CEO of Morocco-based fintech startup Chari, told Rest of World.

That’s meant everything from launching startup accelerators and incubators (Chari was a member of Visa’s inaugural incubator), to making direct investments, to dispersing non-equity investments and grants to companies large and small:

• Mastercard last month invested $200 million for a roughly 4% stake in leading telecom company MTN’s mobile money business and made a similar bet in fellow telecom giant Airtel Africa’s payments business in 2021. Visa, meanwhile, has integrated its global virtual card network with Kenyan payments company Safaricom, which has a 99% market share in the country; Visa also plans $1 billion in investments over the next five years to scale operations, a spokesperson told Rest of World.
• Rest of World calculated that Visa and Mastercard have directly or indirectly injected some $700 million into Africa’s payments industry, based on publicly available information from both firms.

Visa’s non-GAAP net income in fiscal year 2023 rose to over $18 billion, while Mastercard’s hit nearly $12 billion — meaning both companies have plenty of petty cash to spare for international bets (call it the perks of operating in a virtual duopoly).