Day: November 14, 2022

The Biden Administration Is Still Pushing For Their Unconstitutional Student Loan Bailout

 

The Biden administration continues to be making an attempt to get their unconstitutional scholar mortgage bailout rammed by.

Even Nancy Pelosi stated that Biden doesn’t have the ability to do that when she was requested about it final yr.

Biden and Dems at the moment are making an attempt to make use of the component of concern to make individuals settle for it.

CNBC stories:

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Biden administration warns of ‘traditionally giant improve’ in scholar mortgage defaults with out debt forgiveness

Scholar mortgage default charges may dramatically spike if the Biden administration’s mortgage forgiveness plan is blocked, a high official on the U.S. Division of Schooling stated in a brand new courtroom submitting.

The warning got here because the Division of Justice requested a federal choose in Texas to remain an order that has quickly blocked the Biden administration’s debt reduction program.

“Except the [Education] Division is allowed to supply debt reduction, we anticipate there may very well be an traditionally giant improve within the quantity of federal scholar mortgage delinquency and defaults because of the COVID-19 pandemic,” Schooling Division Undersecretary James Kvaal stated within the submitting.

The Biden administration stopped accepting functions for its scholar mortgage forgiveness plan final week after Choose Mark Pittman of the U.S. District Courtroom for the Northern District of Texas known as the coverage “unconstitutional” and struck it down.

In the meantime, six GOP-led states argued in one other lawsuit that the president’s mortgage reduction program threatened their future tax revenues and circumvented congressional authority.

The very fact is that we don’t have the cash. Biden is giving all of it to Ukraine.

Here’s a sign that the FTX cryptocurrency implosion hasn’t destroyed many stock investors: MarketWatch

 

The shockwaves from the rapid collapse of bankrupt FTX last week are raising urgent questions about the risks to financial markets beyond the cryptocurrency exchange’s troubled balance sheet. At least so far, analysts don’t believe the fallout has shocked retail investors overall.

“We are not yet seeing any spillover effects from the cryptocurrency crash,” analysts at Vanda Research, a firm that analyzes the moves and trends of everyday traders and investors, said Wednesday.

After FTX and its related entities filed for Chapter 11 bankruptcy on Friday, analysts at Vanda Research examined retail investor buying trends this week for “traditional assets” such as U.S.-listed stocks and ETFs.

“There has been no significant impact on retail supply for traditional assets as day buying has returned to [year-to-date] average so far this week,” they wrote in a statement.

According to Vanda, daily inflows from retail investors into US stocks and ETFs averaged $1.23 billion.

Over the past few days, companies and ETFs that give investors indirect exposure to cryptocurrencies are receiving less than 1% – 0.3% – of retail investor money flowing into stock markets, the research firm said. . Since the beginning of the year, daily inflows into these companies and ETFs have averaged 1.2% of daily inflows.

Over the past five trading days, the Dow Jones Industrial Average DJIA,
-0.12%
rose more than 3%, while the S&P 500 SPX,
-0.83%
rose nearly 6% and the Nasdaq Composite COMP,
-1.54%
increased by more than 8%. BitcoinBTCUSD,
+0.27%,
one of the earliest and most established cryptocurrencies, is down more than 1% over the same period.

The cryptocurrency market is “too small and too isolated to cause contagion in financial markets,” Citi analysts said.

None of this is to downplay the severity of FTX’s failure or to suggest that the knock-on effects are complete.

In October, approximately 19% of American adults said they owned cryptocurrency, according to a Morning Consult survey. Nearly half said cryptocurrency should be similarly or more regulated than other financial investments, the survey showed.

It is up from 42% in January, an achievement that preceded the failures of other cryptocurrency exchanges: Voyager Digital and Celsius Network.

It’s been a scary couple of days to hear from some investors who pulled their cryptocurrency holdings from FTX at the last minute.

As the case begins in US Bankruptcy Court for the District of Delaware, FTX’s attorneys said in court documents that the list of creditors could exceed one million.

There are open questions about whether creditors, including account holders, can recover their assets, bankruptcy experts told MarketWatch.

When FTX filed for bankruptcy on Friday, John J. Ray, the new CEO who took over from Sam Bankman-Fried, said FTX’s firms would “develop a process to maximize recoveries for affected parties.”

Also on Wednesday, the House Financial Services Committee said it was scheduling a December hearing on the FTX crash and expects news from Bankman-Fried.

“The fall of FTX caused massive damage to over a million users, many of whom were ordinary people who invested their hard-earned savings into cryptocurrency exchange FTX, only to see them disappear within seconds,” Maxine Waters, the California Democrat, said in a statement.

Spillover Results Of FTX Incident Causes Market Turmoil, Bitcoin, Ethereum Fall

The crypto market once more went right into a downward spiral after crypto DeFi lender Genesis suspended withdrawals citing difficulties which occurred on account of the FTX incident. 

This was adopted by Circle (issuer of USDC stablecoin) confirming its publicity to Genesis. Nonetheless, the corporate assured customers that their lending settlement with Genesis is powerful. Tether (issuer of USDT) confirmed that it had no publicity to Genesis.

Because of all these detrimental information, virtually each main crypto, together with Bitcoin (BTC) and Ethereum (ETH), fell. DeFi tokens fell by a a lot better share than others.

The crypto market cap fell about 2.17 per cent to $831.85 billion and its buying and selling quantity was down by 3.31 per cent to $60.09 billion, in line with knowledge from Coinmarketcap.com at 8.50 am.

At the moment’s prime gainer was Belief Pockets Token (TWT); it was up 10.23 per cent at $2.19. The highest loser was Huobi Token (HT), which was buying and selling at $4.58 with a lack of 7.39 per cent within the final 24 hours to Thursday morning. 

Cryptocurrency Costs

Bitcoin: BTC fell 1.88 per cent to $16,613.88.

BTC’s commerce on November 16 was extremely unstable and rancid. Its buying and selling quantity shrank and so did its value. However round 4.40 pm BTC consumers’ exercise surged by a major margin and consequently BTC managed to recuperate a few of its losses.

Its lowest intraday buying and selling value was $16,430.11, whereas its quantity was down by 6.76 per cent at $33,315,235,515.

Ethereum: Ethereum’s value fell 4.03 per cent to $1,211.29 within the final 24 hours to Thursday morning.

ETH’s commerce too was additionally unstable and directionless. ETH made no important value strikes and stayed confined to a slim vary of $1,191 and $1,264. Nonetheless, ETH’s buying and selling quantity was up. 

The bottom value for ETH was $1,192.99. ETH’s buying and selling quantity was up by 6.49 per cent at $12,009,052,297.

Different Altcoins: Solana’s (SOL) value was down by 1.65 per cent at $14.31 in the present day.

Ripple (XRP) was down by 1.48 per cent at $0.3753 and its 24-hour buying and selling quantity was down by 27.19 per cent at $1,274,396,863.

Cardano (ADA) was down by 3.51 per cent to $0.3308. Cardano’s 24-hour buying and selling quantity was down by 12.02 per cent to $267,758,041.

Binance (BNB) was down by 2.43 per cent to $271.71. Its 24-hour buying and selling quantity was down by 12.95 per cent at $913,303,728.

Meme Cash

Dogecoin fell 1.85 per cent at $0.08589. Its 24-hour buying and selling quantity was up by 18.83 per cent at $712,490,658.

Shiba Inu was down by 0.89 per cent to $0.000009195.

Decentralised Finance (DeFi)

Yearn.Finance (YFI) fell 3.87 per cent to $6,314.99. Its 24-hour buying and selling quantity was down by 5.07 per cent at $38,937,160.

Avalanche (AVAX) was down by 3.45 per cent at $13.13 and its 24-hour buying and selling quantity was down by 6.06 per cent at $152,511,719.

Aave (AAVE) was buying and selling with a lack of 5.12 per cent at $58.36 and its 24-hour buying and selling quantity was down by 19.36 per cent at $79,321,550.

Paying for climate damage could threaten funding for other global warming targets: NPR -thats news

Climate activists at the United Nations climate conference in Egypt call for money to pay for loss and damage caused by global warming in low-income countries.

Climate activists at the United Nations climate conference in Egypt call for money to pay for loss and damage caused by global warming in low-income countries.

Peter Dejong/AP

Facing increasing pressure to compensate low-income countries for the damage they are suffering from climate change, rich nations may try to move money they have already pledged to other global warming targets instead of getting new funds, according to experts and participants at the United Nations climate conference in Egypt.

a draft document released this week in talks says money for loss and damage, a key issue in the negotiations, should be added to climate finance already going to low-income countries to help them limit and adapt to global warming. The current funding deal, which was created more than a decade ago, reflects the fact that industrialized nations like the United States have emitted most of the pollution that warms the Earth, while poorer countries bear the brunt of it. damage caused by rising temperatures.

But industrialized countries have for years failed to fully finance those pledges. That makes the chances of a big new cash injection from losses and damages slim, especially as countries grapple with the recession threat and the war in Ukraine. And it is increasing the possibility that developed nations will now seek to transfer money from older funding commitments to potentially new loss and damage obligations, without actually increasing the general funds that low-income nations need to tackle climate change.

“We need to see money, extra money, flow into” loss and damage, says Michai Robertson, an adviser to the Alliance of Small Island States, which represents communities that are especially vulnerable to climate change. However, he says a reorganization of climate funds is likely to be “a reality that we will have to deal with a lot in the future.”

Failure to deliver new money for loss and damage would mean that the richest countries would continue their chronic underfunding of developing nations. That raises fears that this year’s climate conference will not spur a strong global response to climate change despite the urgency signaled by deadly events around the world.

Without more money, loss and damage could hurt adaptation efforts

One of the challenges of dealing with climate change is that countries have to do several things at once to protect their people, experts say. Countries must limit or mitigate further warming. They must adapt to the risks that people face. And they must compensate poorer nations for damage already done and for impacts that cannot be avoided, such as the displacement of communities from rising sea levels. All of that requires funding, which, given the scope of the problem, should increase over time.

So far, several countries have promised money for loss and damage. But the amounts are relatively small and the money is not new, says Taylor Dimsdale, director of E3G, a climate change think tank. Rather, countries are “simply dividing the same climate finance pie in different ways.”

If money is withdrawn from mitigation and adaptation efforts, it could mean more places and people will experience irrevocable loss and damage.

Over time, the amount of money that is available to low-income countries will likely increase so that claims for loss and damage do not eat up funds for extreme weather adaptation, says Gaia Larsen, director of access and deployment for climate finance at the Center for Sustainable Finance at the World Resources Institute. But right now, “developed countries are pulling back, mainly because they don’t want to provide much more money,” she says.

Reached for comment, a spokesman for John Kerry, the US presidential special envoy on climate change, noted recent comments in which Kerry said the country “has been very clear about its support to address the issue of loss and damage.”

The debate focuses on the creation of a new fund for losses and damages

However, it is not yet clear what kind of action world leaders would be willing to commit to in Egypt.

Frans Timmermans, executive vice-president of the European Commission, suggested on Wednesday that a decision on whether to create a new fund or financial mechanism to address loss and damage should be delayed while details are ironed out, including whether certain developing countries such as China should contribute. and how the money would be distributed. China is the world’s biggest emitter of heat-trapping pollution and second-biggest economy.

“Now, we believe that a process should be started where the [financial] Installation could be one of the outcomes,” Timmermans said in Egypt. “But we also believe that the existing instruments we have could be immediately mobilized to support the most vulnerable.”

The European Union and several member states said on Wednesday that they are providing over a billion euros ($1.04 billion) of new and existing funds for adaptation programs in Africa. An EU spokesman said the bloc is providing 220 million euros of new funds, including 60 million euros for losses and damages.

“So you see we have tools, funds, mechanisms to provide financial assistance now and move it quickly.” Timmermans said.

Kaveh Guilanpour, vice president of international strategies at the Center for Climate and Energy Solutions, says there could be “good reasons” to postpone the creation of a new loss and damage fund at this year’s climate conference.

It is not clear if such a fund “will quickly result in the flow of new finance,” says Guilanpour. And world leaders are looking for ways to use limited public money to attract other forms of funding, she says, including from the private sector.

Guilanpour says that climate litigation coupled with better attribution science linking extreme weather events to climate change could expose fossil fuel companies to greater liability for the impacts of rising temperatures. That could provide a valuable source of funding for loss and damage claims.

“There is a will and there is a recognition [among industrialized countries] that more funding is needed for loss and damage,” says Guilanpour. “But I think there’s also a question about where and how the money will come from.”

Developing countries are also looking for safeguards to ensure they get what they were promised.

Even if world leaders decide this week to create a new loss and damage fund, “we’re still going to have the blurred lines and rebranding that you see many developed countries doing right now,” says Robertson of the Alliance of Small Island States. .

“We’re going to have to make sure we set some clear rules about this and what can count as funding for this cause,” says Robertson, “especially to hold them accountable.”

This record number in Nvidia earnings is a scary sight

Nvidia Corp.’s financial results had a bit of a surprise for investors, and not on the good side — product inventories doubled to a record high as the chip company gears up for a questionable holiday season.

Nvidia reported fiscal third-quarter revenue that was slightly better than analysts’ reduced expectations Wednesday, but the numbers weren’t that great. Revenue fell 17% to $5.9 billion, while earnings were cut in half thanks to a $702 million inventory charge, largely relating to slower data-center demand in China.

Gaming revenue in the quarter fell 51% to $1.57 billion. Nvidia said it is working with its retail partners to help move the currently high-channel inventories.

While the company was writing off the inventory for China, its own new product inventory was growing. Nvidia
NVDA, -4.54%
reported that its overall product inventory nearly doubled to $4.45 billion in the fiscal third quarter, compared with $2.23 billion a year ago and $3.89 billion in the prior quarter. Executives cited its coming product launches, designed around its new Ada and Hopper architectures, when asked about the inventory gains.

In the semiconductor industry, high inventories can make investors nervous, especially after the industry had so many supply constraints in recent years that quickly swung to a glut of chips in 2022. With doubts about demand for gaming cards and consumers’ willingness to spend amid sky-high inflation this holiday season, having all that product on hand just amps up the nerves.

Full earnings coverage: Nvidia profit chopped in half, but tweaked servers to China offset earlier $400 million warning

Chief Financial Officer Colette Kress told MarketWatch in a telephone interview Wednesday that the company’s high level of inventories were commensurate with its high levels of revenue.

“I do believe….it is our highest level of inventory,” she said. “They go hand in hand.” Kress said she was confident in the success of Nvidia’s upcoming product launches.

Nvidia’s revenue reached a peak in the April 2022 quarter with $8.3 billion, and in the past two quarters revenue has slowed, with gaming demand sluggish amid a transition to a new cycle, and a decline in China data-center demand due to COVID-19 lockdowns and U.S. government restrictions.

For its data-center customers, the new architectures promise major advances in computing power and artificial-intelligence features, with Nvidia planning to ship the equivalent of a supercomputer in a box with its new products over the next year. Those types of advanced products weigh on inventory totals even more, Kress said, because of the price of the total package.

“It’s about the complexity of the system we are building, that is what drives the inventory, the pieces of that together,” Kress said.

Bernstein Research analyst Stacy Rasgon believes that products based on Hopper will begin shipping over the next several quarters, “at materially higher price points.” He said in a recent note that he believes Nvidia’s numbers were likely hitting a bottom in this quarter.

“We remain positive on the Hopper ramp into next year, and believe numbers have at this point likely reached close to bottom, with new cycles brewing and an attractive secular story even without China potential,” Rasgon said in an earnings preview note Tuesday.

Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

Nvidia Chief Executive Jensen Huang reminded investors on a conference call that the company’s inventories are “never zero,” and said everyone is enthusiastic about the upcoming launches. But it doesn’t take too long of a memory to conjure up a time when Nvidia went into a holiday with an inventory backlog that included new architecture and greatly disappointed investors: Four years ago, Huang had to cut his forecast for holiday earnings twice amid a “crypto hangover” with similar dynamics to the current moment

Investors need faith that this holiday season will not be the same, even as demand for some videogame products declines after a pandemic boom just as the market for cryptocurrency — some of which has been mined with Nvidia products — hits a rough patch. Huang said that Nvidia’s RTX 4080 and 4090 graphics cards based on the Ada Lovelace architecture had an “exceptional launch,” and sold out.

Nvidia shares gained more than 2% in after-hours trading Wednesday, suggesting that some are betting that this time will be different. That enthusiasm needs to translate into revenue for Nvidia so that this big gain in inventories does not end up being part of another write-down at some point in the future.

: Retirement savers, especially Gen Z, hold steady, even in a rough stock market

Despite market turbulence that ate into retirement account balances and left workers feeling worse about their finances, the majority of retirement savers kept their contributions steady and Generation Z savers actually hiked their contribution rates, new data from Fidelity Investments showed.

Although average account balances have decreased, the data suggested retirement savers continued to focus on the long-term: total 401(k) savings rates held strong, the number of IRAs at Fidelity continued to increase, and the percentage of employees with 401(k) loans remained low for a sixth consecutive quarter, the firm found. 

“The market has taken some dramatic turns this year, including the best month this past October since 1976,” said Kevin Barry, president of workplace investing at Fidelity Investments. “Retirement savers have wisely chosen to avoid the drama and continue making smart choices for the long-term. This is important, because one of the most essential aspects of a sound retirement savings strategy is contributing enough consistently—in up markets, down markets and sideways markets — to help reach your goals.” 

Read: Why you shouldn’t ‘set and forget’ your retirement accounts

Total 401(k) savings rates were stable. The total savings rate for the third quarter, which reflects a combination of employer and employee 401(k) contributions, remained fairly steady at 13.8%, compared with 13.9% in the second quarter and 14.0% in the first quarter of the year. That was slightly below Fidelity’s suggested savings rate of 15%. 

The majority of workers (86%) kept their savings account contributions unchanged and 7.8% actually increased their contribution rate. Men continued to save at higher rates than women (14.5% vs. 13.5%), while preretiree baby boomers saved at the highest levels (16.5%). Gen Z participants increased their savings levels this quarter, moving from 10% to 10.3%. 

Read: Your 401(k) has had a wild year. How to know when it’s time to rebalance.

“Generally, retirement savings rates was not an initial option for people when they wanted to make changes in their financial picture. We also didn’t see people tapping into loans,” said Mike Shamrell, Fidelity’s vice president of thought leadership. “A lot of people are realizing that retirement savings is a marathon, not a sprint. And over the long haul, you will encounter a lot of market scenarios. Staying the course and taking a long perspective is really the strongest path.”

The majority of retirement savers still aren’t making changes to their asset allocation. Only 4.5% of 401(k) and 403(b) savers made a change to the asset allocation in the third quarter, less than the 5.0% that did so in second quarter and those who made a change in third quarter a year ago (4.8%). Of the savers that made changes in Q3, about 85% only made one, with the top change involving shifting savings to more conservative investments (29%). 

Outstanding 401(k) loans and average loan amounts continue to decline. Despite inflationary pressures, the percentage of 401(k) savers initiating a new loan continues to remain low, with only 2.4% of participants doing so in the third quarter. In addition, the percentage of participants with a loan outstanding remained at 16.7% for third quarter—a significant drop, compared with 18.7% in third quarter of 2020 in the early days of the pandemic.

On the down side, the percentage of individuals with negative feelings about their finances (32%) is now greater than those who have positive feelings (30%), which is a sharp contrast to just a year ago, when the percentage of workers who felt positive about their finances (45%) was more than twice the percentage of those with negative feelings (22%). 

Also, average retirement account balances decreased for the third consecutive quarter. 

The average IRA balance was $101,900 in the third quarter, a 24.9% decrease from a year ago, and an 8% decrease from last quarter, and a 33% increase from 10 years ago. 

The average 401(k) balance dropped below the six-figure mark to $97,200 this quarter, down 22.9% from a year ago, 6% from the second quarter and and a 28% increase from 10 years ago. For baby boomers, the average 401(k) balance was $197,400, while Gen X had $126,800. Millennials’ average balance was $36,900 and Gen Z’s average was $4,900.

The average 403(b) account balance decreased to $87,400, down 21% from a year ago, a decrease of 6% from last quarter, and a 48% increase from 10 years ago.

Despite this, Gen Z 401(k) savers actually increased their balances slightly this quarter, Fidelity said. Although their balances are smaller, among Gen Z savers, who are heavily invested in target-date funds, the average account balance actually increased by 1.2% over last quarter. 

“Gen Z is really seeing the positive benefits of auto services like auto-enrollment in company plans,” said Shamrell. “Retirement is many years away, but they seem to be the group staying the course, which is probably the best approach they can take.”

As of the third quarter, 85% of Gen Z savers have all of their 401(k) savings in a target-date fund. The use of target-date funds as a default option continues to increase in popularity, with a 93.2% plan sponsor adoption rate in the third quarter of 2022, up from 88.3% in the third quarter of 2017, just five years ago. 

The number of IRA accounts continues to increase, especially among Gen Z and millennials. 

The total number of Fidelity IRA accounts continues to climb, reaching 13.2 million, an 11.2% increase over Q3 of last year. The number of accounts reporting a contribution also increased by 2.3% year-to-date between the third quarter last year and this year.

Across generations, Roth accounts tend to be the retail retirement savings vehicle of choice, with 61% of all contributions going to a Roth in third quarter of 2022. 

Younger generations continue to lead the way, with the number of accounts for Gen Z increasing by 83% compared with third quarter last year and the number of millennial accounts increasing by 25%. In particular, millennial Roth IRA accounts with a contribution increased by 5.8% year-to-date. In addition, younger generations (Gen Z and millennials) now make up make up roughly half (45%) of the tax-exempt workforce, Fidelity said.

Fidelity said its third-quarter analysis of savings behaviors and account balances included data from more than 35 million IRA, 401(k), and 403(b) retirement accounts.

This record number in Nvidia earnings is a scary sight

Nvidia Corp.’s financial results had a bit of a surprise for investors, and not on the good side — product inventories doubled to a record high as the chip company gears up for a questionable holiday season.

Nvidia reported fiscal third-quarter revenue that was slightly better than analysts’ reduced expectations Wednesday, but the numbers weren’t that great. Revenue fell 17% to $5.9 billion, while earnings were cut in half thanks to a $702 million inventory charge, largely relating to slower data-center demand in China.

Gaming revenue in the quarter fell 51% to $1.57 billion. Nvidia said it is working with its retail partners to help move the currently high-channel inventories.

While the company was writing off the inventory for China, its own new product inventory was growing. Nvidia
NVDA, -4.54%
reported that its overall product inventory nearly doubled to $4.45 billion in the fiscal third quarter, compared with $2.23 billion a year ago and $3.89 billion in the prior quarter. Executives cited its coming product launches, designed around its new Ada and Hopper architectures, when asked about the inventory gains.

In the semiconductor industry, high inventories can make investors nervous, especially after the industry had so many supply constraints in recent years that quickly swung to a glut of chips in 2022. With doubts about demand for gaming cards and consumers’ willingness to spend amid sky-high inflation this holiday season, having all that product on hand just amps up the nerves.

Full earnings coverage: Nvidia profit chopped in half, but tweaked servers to China offset earlier $400 million warning

Chief Financial Officer Colette Kress told MarketWatch in a telephone interview Wednesday that the company’s high level of inventories were commensurate with its high levels of revenue.

“I do believe….it is our highest level of inventory,” she said. “They go hand in hand.” Kress said she was confident in the success of Nvidia’s upcoming product launches.

Nvidia’s revenue reached a peak in the April 2022 quarter with $8.3 billion, and in the past two quarters revenue has slowed, with gaming demand sluggish amid a transition to a new cycle, and a decline in China data-center demand due to COVID-19 lockdowns and U.S. government restrictions.

For its data-center customers, the new architectures promise major advances in computing power and artificial-intelligence features, with Nvidia planning to ship the equivalent of a supercomputer in a box with its new products over the next year. Those types of advanced products weigh on inventory totals even more, Kress said, because of the price of the total package.

“It’s about the complexity of the system we are building, that is what drives the inventory, the pieces of that together,” Kress said.

Bernstein Research analyst Stacy Rasgon believes that products based on Hopper will begin shipping over the next several quarters, “at materially higher price points.” He said in a recent note that he believes Nvidia’s numbers were likely hitting a bottom in this quarter.

“We remain positive on the Hopper ramp into next year, and believe numbers have at this point likely reached close to bottom, with new cycles brewing and an attractive secular story even without China potential,” Rasgon said in an earnings preview note Tuesday.

Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

Nvidia Chief Executive Jensen Huang reminded investors on a conference call that the company’s inventories are “never zero,” and said everyone is enthusiastic about the upcoming launches. But it doesn’t take too long of a memory to conjure up a time when Nvidia went into a holiday with an inventory backlog that included new architecture and greatly disappointed investors: Four years ago, Huang had to cut his forecast for holiday earnings twice amid a “crypto hangover” with similar dynamics to the current moment

Investors need faith that this holiday season will not be the same, even as demand for some videogame products declines after a pandemic boom just as the market for cryptocurrency — some of which has been mined with Nvidia products — hits a rough patch. Huang said that Nvidia’s RTX 4080 and 4090 graphics cards based on the Ada Lovelace architecture had an “exceptional launch,” and sold out.

Nvidia shares gained more than 2% in after-hours trading Wednesday, suggesting that some are betting that this time will be different. That enthusiasm needs to translate into revenue for Nvidia so that this big gain in inventories does not end up being part of another write-down at some point in the future.

FTX Collapse Slaps the Winklevoss Brothers

Cryptocurrency brokerages Gemini and Genesis are reassuring people that their operations are still solvent after the massive collapse of exchange FTX.

The insolvency of FTX could result in more companies in the industry facing severe liquidity issues, including crypto exchanges and lenders.

Gemini, the exchange founded by the Winklevoss twins, is attempting to calm crypto investors. The exchange said on Wednesday that it would halt withdrawals on its Earn accounts that provide interest. The lending partner for the Earn accounts is Genesis.

“We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days.,” Gemini said.

Gemini said it hopes to have more information in a few days.

“We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible,” Gemini said in a tweet. “We will provide more information in the coming days.”

‘Disappointed’

The company also said, “We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program,” in a tweet.

Gemini’s other products and services are not impacted since the company is a “full-reserve exchange and custodian,” according to a tweet. “All customer funds held on the Gemini exchange are held 1:1 and available for withdrawal at any time.”

Gemini faced another setback around 12:00 PM ET when it experienced an outage from AWS, the cloud platform of Amazon. The outage was restored within a few hours

“We experienced an Amazon Web Services EBS outage with one of our primary databases,” the company tweeted. “We have restored the database and are bringing the exchange back up.”

On Nov. 9, two days before FTX filed for bankruptcy, Cameron Winklevoss, who founded cryptocurrency exchange Gemini with his twin brother Tyler, fired a thinly veiled criticism at FTX.

“We do not do anything with your funds unless explicitly authorized and directed to do so by you,” he posted on Twitter. “Regulatory oversight is important as it ensures that companies like Gemini do what they say they do.”

Genesis Stops Customer Withdrawals

Crypto exchange Genesis confirmed on Wednesday that it has stopped customers from making withdrawals and issuing new loans, the latest company to be severely impacted from the collapse of FTX.

The brokerage told TheStreet in an email that it’s “number one priority is to serve our clients and preserve their assets,” a spokesperson said.

“Therefore, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business,” Genesis said. “We are working diligently to shore up the necessary liquidity to meet our lending client obligations.”

The division that has halted the withdrawals is Genesis Global Capital, which works with institutional clients and had $2.8 billion in total active loans as of the end of the third quarter of 2022.

Genesis said it has three primary business lines: spot and derivatives trading, lending and borrowing, and custody.

“Our spot and derivatives trading and custody businesses remain fully operational,” the company spokesperson added.

Genesis said via Twitter it is working on a plan for its lending business such as injecting new capital that will be announced next week.

“We have hired the best advisors in the industry to explore all possible options,” the company tweeted. “Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”

The company reinforced that Genesis Global Trading, its broker/dealer that holds its BitLicense, is “independently capitalized and operated – and separate from all other Genesis entities,” in a tweet.

Genesis faces major losses when Three Arrow Capital, which is also known as 3AC, became insolvent in May.

The crypto company filed a $1.2 billion claim in bankruptcy court.

Genesis does not have any outstanding liabilities linked to Three Arrows Capital.

“3AC negatively impacted the liquidity and duration profiles of our lending entity Genesis Global Capital,” the company tweeted. “Since then, we have been de-risking the book and shoring up our liquidity profile and the quality of our collateral.”

FTX Practices

FTX was once a major brokerage for trading crypto and the bankrupt company said it could have as many as one million investors who are seeking to recoup their losses.

The Bahamian-based brokerage filed for bankruptcy after facing massive liquidity issues when its acquirer, Binance, backed out of a merger.

Several other crypto firms, including Celsius and Voyager Digital, also filed for bankruptcy in 2022 as they also faced liquidity issues and falling prices in bitcoin and other digital asset prices.

FTX was an exchange used by crypto investors that included retail and institutional traders such as several hedge funds. It was backed by numerous high profile venture capitalists such as SoftBank, Ontario Teachers’ Pension Plan, Sequoia Capital, Temasek, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital, Lightspeed Venture Partners, and funds and accounts managed by BlackRock.

The insolvency of FTX, which filed for Chapter 11 bankruptcy on November 11, was the result of a liquidity shortfall when clients attempted to withdraw funds from the platform a few days ago. The liquidity shortfall appears to have been the result of FTX’s founder reportedly transferring $10 billion of customer funds from FTX to his cryptocurrency trading platform Alameda Research, according to Reuters, citing two sources that “held senior FTX positions until this week”.