—— Credit Suisse Reignites Banking Panic; U.S. PPI Decline Supports Fed Pause; PwC Launches Chatbot for Lawyers; BMW Prices Up 40% in Three Years; NYC Ranks Last for Salary Savings; $15B in Deposits Flow to U.S. Banks; Blackstone Defaults on $325M CMBS
1. Credit Suisse Reignites Banking Panic
Today, Ammar Al Khudairy, chairman of Credit Suisse’s largest shareholder Saudi National Bank, stated clearly that it would “absolutely not” inject any more capital into the bank.
His terse comment triggered a 31% plunge in Credit Suisse shares—its largest single-day drop. Its 2026 bonds fell to 70 cents on the dollar, with yields exceeding U.S. Treasuries by 20%.
Just as fears from the SVB collapse had started to ease, Credit Suisse reignited panic across financial markets. Investors grew increasingly concerned about the health of bank balance sheets in a high-rate environment.
Credit Suisse has worsened the banking crisis, prompting a flight to Treasuries and away from risk assets.
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2. U.S. PPI Decline Supports Fed Pause
According to data released by the U.S. Department of Labor today, both the Producer Price Index (PPI) and retail sales declined in February, giving the Federal Reserve more leeway to pause rate hikes.
PPI unexpectedly dropped 0.1% month-over-month, indicating slight easing in inflationary pressures.
Retail sales declined 0.4% over the same period, with consumers becoming more cautious. Prices fell in 8 of the 13 tracked categories, including furniture, automobiles, and apparel.
Fed Chair Jerome Powell previously said PPI would be a key gauge ahead of next week’s FOMC meeting.
ING’s chief economist said falling PPI and the banking crisis have reduced the likelihood of further rate hikes.
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3. PwC Launches Chatbot for Lawyers
PricewaterhouseCoopers LLP announced today a 12-month partnership with AI startup Harvey to launch a chatbot that will assist lawyers in boosting work efficiency.
More than 4,000 PwC lawyers across over 100 countries will have access to the tool, which helps with due diligence, compliance, and legal advisory tasks.
Harvey’s platform is built on OpenAI’s ChatGPT and excels at handling and analyzing large volumes of text.
OpenAI’s chatbot is capable of answering nearly any question and simplifying complex topics with plain language.
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4. BMW Prices Up 40% in Three Years
Since 2020, German automaker BMW has passed rising input costs on to consumers, with average car prices rising 40%. However, the company said today it will not raise prices further in 2023, though output will increase slightly.
Auto Trader reports that higher prices stem from commodity inflation, chip shortages, luxury car demand, and rising EV costs.
BMW and rivals have increased margins by focusing on premium models. In the UK, BMW’s median car price rose from £36,638 in March 2020 to £51,350. Volkswagen and Mercedes saw similar price hikes of 19% and 39%.
BMW has successfully passed on inflation to consumers while increasing profit margins.
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5. NYC Ranks Last for Salary Savings
According to consumer finance firm SmartAsset, out of 76 major U.S. cities, New York ranks last in how far a $100,000 salary goes—leaving only $35,791 in savings after taxes and expenses.
New York is also among the ten most expensive cities in the U.S., along with San Francisco, Los Angeles, Boston, and Seattle.
In contrast, Memphis tops the list, where a $100K salary leaves $86,444 in post-expense savings. However, NYC’s median household income exceeds $70,000, while Memphis lags at $44,000.
SmartAsset’s formula deducts federal, state, and local taxes from $100,000, along with housing, groceries, energy, transport, and other costs.
While NYC’s high living costs shrink savings, its typical household income is significantly higher than many other cities.
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6. $15B in Deposits Flow to U.S. Banks
Sources revealed that in the days following SVB’s collapse, Bank of America gained $15 billion in new deposits, making it one of the biggest beneficiaries of the banking crisis.
Other giants like JPMorgan Chase, Citigroup, and Wells Fargo also took in billions in new deposits.
As pandemic-era stimulus receded, total bank deposits had been declining. At the end of last year, Bank of America’s deposits fell $8 billion quarter-over-quarter.
Recent turmoil reversed that trend, as customers fled to large banks perceived as “too big to fail.”
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7. Blackstone Defaults on $325M CMBS
Blackstone’s $325 million CMBS loan on the Hughes Center in Las Vegas has been transferred to special servicing by KeyBank after the firm said it could not make upcoming payments.
A Blackstone spokesperson said the 2013 office investment has been heavily impacted in the past three years. Fortunately, U.S. office holdings account for just 2% of Blackstone’s global real estate portfolio.
Blackstone bought the 1.5 million square-foot Hughes Center for $347 million in 2013. The property spans 68 acres, with 110,000 square feet of retail and 10 office buildings.
Sources said the property’s suburban location and high vacancy rates led Blackstone to mark down its equity stake.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.