The Sunday Brew #26
In this brew - bank crisis in the US, VICE potentially filing for bankruptcy, a leaked Google document raising concerns about its AI strategy, and the annual Berkshire Hathaway shareholder festival.
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Welcome to The Sunday Brew, free curated newsletter published weekly by The Percolator. We curate the key news & events around business, techn & entrenpreneurship, so you get them without scourging the internet.
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TOP STORY
Mounting Risk of Bank Crisis in the USA Persists
Earlier this month, JP Morgan Chase acquired First Republic Bank in a bailout to salvage what was the second largest bank failure in the United States. While many had hoped that this would be the end of a series of collapses, it appears that the trend may continue.
Now, on Thursday in light of indications that two more regional banks, PacWest based in Los Angeles and Western Alliance in Arizona, may be at risk of failure, regulators have taken action to suspend trading in their shares.
Currently, the crisis appears to be contained within the United States, with the exception of Credit Suisse in Switzerland. Some of the reasons that are believed to be contributing to the crisis include:
The business models of the affected banks;
Regulatory failures;
The prevalence of small and mid-sized banks in the US;
The rapid increase in interest rates by the US Federal Reserve.
According to Bill Ackman, the CEO of New York-based hedge fund Pershing Square, the entire US regional banking system is in jeopardy.
“Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble. We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC, and our government wake up? We need a systemwide deposit guarantee regime now.”
Bill Ackman
Join the conversation by sharing your views in the comments.
WEEK’S PICK
After BuzzFeed, VICE Faces Troubled Times
After the recent shutdown of BuzzFeed News, another digital media outlet is now experiencing financial difficulties. VICE, which was valued at $5.7 billion in 2017, is now only worth a fraction of that amount. Despite taking on $30 million in debt financing in February, VICE has undergone significant layoffs in recent months.
After shutting down its TV news program, Vice News Tonight, and merging its global operation, Vice World News, into Vice News, reports have emerged that VICE is now considering filing for bankruptcy. Read On »»»
Google Doc Leak Casts Doubt on their AI Success
Earliner this week
published, that an anonymous individual shared a document on a public Discord server, claiming it was leaked from Google. The document includes quotes from Google researchers expressing concern over the lack of a competitive advantage, or "moat," possessed by both Google and OpenAI in the field of AI due to ongoing open source research.“But the uncomfortable truth is, we aren’t positioned to win this arms race and neither is OpenAI. While we’ve been squabbling, a third faction has been quietly eating our lunch.”
Although the credibility of the source may be in question, the analysis presented in it is quite sound. Read On»»»
Berkshire Hathaway Annual Shareholder ‘Festival’ 2023
Over 30,000 shareholders of Berkshire Hathaway have gathered in Omaha, Nebraska for a weekend full of events that extend well beyond the standard annual general meeting - it's no wonder they refer to it as a "Festival."
Over these couple of days, numerous BH managers, including the esteemed value investors Warren Buffet and Charlie Munger, will provide shareholders with insight into their investment approach and market opportunities by answering their questions. Read On »»»
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The Sunday Brew by The Percolator brings to you curated news on tech, business & entrepreneurship, from across the internet to give your week a perfect start.
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