Financial Daily Dose 6.21.2021 | Top Story: Credit Suisse Turns Off Cash Spigot for SoftBank and Masa Son

June 21, 2021

Stung recently by the collapse of Greensill Capital and Archegos Capital Mgmt (the latter alone which cost it more than $5.5 billion), Credit Suisse recently “dissolved a longstanding personal lending relationship” with Masa Son and his SoftBank empire. The change is a significant one for both parties, as Son “had around $3 billion of his shares in the company pledged as collateral with Credit Suisse” as recently as February - WSJ

Newly disclosed details of a 2020 activist investor attempt to introduce some “new blood on the board of the faded Japanese industrial giant Toshiba” show that that not only was the company’s leadership “less than receptive,” but the company sought to resolve the issue by “making a secret request to Japan’s powerful trade ministry” to “beat them up.” Months later, the tack has backfired, Toshiba’s CEO is out, and the release last week of an independent investigative report on the incident “has shaken Japan’s interconnected worlds of business and government” - NYTimes and WSJ

Fascinating look from the Times at the perilous world of fashion prediction—an already fraught field that was turned entirely upside down by a pandemic that spawned worldwide lockdowns, working from home, and Zoom call. So what’s next? Some thoughts . . . - NYTimes

Even as the housing market continues to blaze a red-hot streak in nearly all major U.S. locales, tens of thousands of Americans looking to buy—specifically, those “without big piles of cash”—are getting left behind. Surging home prices certainly aren’t helping the cause - WSJ

Meet Natasha Sarin, the 32-year-old Harvard-trained economist who’s taking a leading role at the Treasury Department in developing tax policy and cracking down on tax cheats. Oh yeah, and she’s a Larry Summers protégé. Hello, complications on both sides of the aisle - NYTimes

A reminder from Bloomberg that even if the Fed starts slowly tapering its stimulus efforts (including reducing the “$120 billion a month it has been pumping into the financial system since the start of the pandemic”), the central bank is still sitting with a staggering $8 trillion on its balance sheet, creating the possibility of a 2004-era “conundrum” in which long-term bond yields fall even as monetary policy tightens - Bloomberg

Meanwhile, falling lumber prices have almost single-handedly changed the conversation on feared out-of-control inflation, with the price jump and fall proving instead to be merely “a dance of supply and demand that has reassured many experts and the Federal Reserve in their belief that painful price spikes for everything from airline tickets to used cars will abate as the economy gets back to normal” - NYTimes

Recent troubles at Lordstown Motors (founder out, production in jeopardy, coming SEC investigation[?]) revealed something more interesting than the “bumpy start” for the e-truck maker: investors don’t seem to care all that much. Indeed, despite “significant turmoil at their businesses,” Lordstown and fellow e-car makers Nikola and Canoo “all have share prices that are in line with, or above, the prices from when they struck deals to go public by merging with . . . SPACs last year” - WSJ

Spanish bank BBVA announced late last week that “it is opening its bitcoin trading services to all of its Swiss private banking clients,” the latest move by a financial firm to “broaden its cryptocurrency services in recent months” – Law360

President Biden is convening the nation’s top financial regulators today “to discuss the health of the system they oversee and how his administration’s priorities, including on climate change and inclusion, can be best addressed” - Bloomberg

Still reeling from this story about the 17-year-old who fell 2 miles to the ground after her plane split apart in midair, survived for 11 days on her own in the Amazon, and has devoted much of her life to running the research lab her parents founded in Peru’s Panguana Reserve - NYTimes

Stay safe and get vaxxed,