Above the Fold 

Russia Starting to Feel Sanction and Energy Squeeze 

In a show of defiance and newfound solidarity, Russia and China recently formed a closer alliance to provoke western allies (namely the U.S.) and increase their collective power. And while both nations are experiencing less-than-favorable economic conditions, the former Soviet Union is showing signs of a real cash crunch and potential economic disaster. What’s more, many experts believe that a Russia-China alliance may struggle as Russia is in a much weaker global position, leading to unfavorable power dynamics within that partnership.   

When Russia first invaded its neighbor Ukraine last February, energy supply disruptions triggered a surge in oil and natural gas, feeding Russia’s war machine with a windfall of rubles and dollars. Thirteen months later, its critical energy exports have not only lost tremendous value in the marketplace (oil and natural gas have since cratered), but major customers as well. Its currency has fallen more than 20% against the U.S. dollar and other major currencies in recent months as military costs surge amidst a continued decline in economic activity and foreign participation. Many of Russia’s youngest and strongest workforce members have also left to fight an unpopular war, leaving massive labor shortages across all sorts of businesses. At the same time, most western investors have abandoned businesses and lending practices within the nation. These effects can be exponential, pushing Russia further behind in areas such as technology, infrastructure and global trade. 
 

President Putin is finally acknowledging the effects of his war, but remains bellicose and stubborn. The world is now wondering just how far he’s willing to push his increasingly reluctant nation that’s slipping backwards into its former Soviet-era struggles. 

Three Things                                                

FTX Founder Charged (Again), Binance Troubles Mount 

The disgraced founder of now-defunct cryptocurrency exchange FTX is being charged with conspiring to bribe Chinese government officials in order to regain access to over $1 billion in frozen crypto assets (there are 13 charges in total). In 2021, Sam Bankman-Fried allegedly authorized another one of his companies, Alameda Research, to pay at least $40 million in crypto to unlock funds frozen by the communist nation during an ongoing investigation.  

In other news, Binance, which had played a role in the collapse of FTX, is now facing a lawsuit from the Commodity Futures Trading Commission, alleging rule violations and even illegal operations in the United States. Binance is experiencing billions in outflows and could even face a shutdown according to some.  

Tastes Like Chicken? 

The U.S. Food and Drug Administration (FDA) approved California-based GOOD Meat to bring its lab-grown chicken to the marketplace. The approval marks the second lab-grown meat producer to get the green light by the FDA, with several others working to gain approval from the regulator and the U.S. Department of Agriculture (both are required in order to sell the food products stateside). UPSIDE foods got the go-ahead back in November. Cultivated meat is created using a small sample of animal cells which are fed nutrients and grown in steel vats (bioreactors) before being processed into edible, formed cuts. Prices of lab-grown meats are still much higher than traditional, but proponents say these foods can reduce greenhouse gases and eventually help improve global nutrition and food supply.    

How a Simple Accounting Tactic May Have Saved Banks From Collapse 

A recent Wall Street Journal report revealed that at least six large U.S. banks shifted the classification of more than $500 billion in bond holdings so they wouldn’t have to report unrealized losses on bonds. As interest rates have soared, bond prices declined, greatly reducing the value of many banks’ reserve capital. Even though many of these bonds will pay 100% of their face value at maturity, most banks reported current market value, which meant deep losses and added capital requirements. But, by declaring maturity value, these accounting-savvy banks were able to avoid reporting losses and effectively locked in (and stabilized) their bond holdings, no matter how far markets dropped.  

In the Know                                                

Most Americans Still Live Paycheck to Paycheck 

In the latest regular report by LendingClub, more than 62% of Americans were living paycheck to paycheck in February, up from 60% the month before. What’s more, nearly half of six-figure earners also were just a pay cycle away from serious economic consequences. And even though energy prices have come down, inflation and stagnant wage growth are still major factors in the average consumer’s struggle. The report also showed that an increased number of Americans have found a side hustle to make ends meet.