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    Deposit drain from smaller banks into financial giants like JPMorgan Chase has slowed, sources say

    The surge of deposits moving from smaller banks to big institutions including JPMorgan Chase and Wells Fargo has slowed to a trickle in recent days, CNBC has learned.
    The deposit drain, which roiled markets globally and forced regulators to intervene to protect bank customers, began improving around March 16, said people with knowledge of inflows at top banks.
    The situation is fluid and could change if concerns about other banks arise, said one person, who declined to be identified speaking before the release of financial figures next month.
    The past few weeks have exposed a glaring weakness in how some banks have managed their balance sheets, which could lead to more turbulence, said Citigroup CEO Jane Fraser.

    First Republic Bank headquarters is seen on March 16, 2023 in San Francisco, California, United States.
    Tayfun Coskun | Anadolu Agency | Getty Images

    The surge of deposits moving from smaller banks to big institutions including JPMorgan Chase and Wells Fargo amid fears over the stability of regional lenders has slowed to a trickle in recent days, CNBC has learned.
    Uncertainty caused by the collapse of Silicon Valley Bank earlier this month triggered outflows and plunging share prices at peers including First Republic and PacWest.

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    The situation, which roiled markets globally and forced U.S. regulators to intervene to protect bank customers, began improving around March 16, according to people with knowledge of inflows at top institutions. That’s when 11 of the biggest American banks banded together to inject $30 billion into First Republic, essentially returning some of the deposits they’d gained recently.
    “The people who panicked got out right away,” said the person. “If you haven’t made up your mind by now, you are probably staying where you are.”
    The development gives regulators and bankers breathing room to address strains in the U.S. financial system that emerged after the collapse of SVB, the go-to bank for venture capital investors and their companies. Its implosion happened with dizzying speed this month, turbocharged by social media and the ease of online banking, in an event that’s likely to impact the financial world for years to come.
    Within days of its March 10 seizure, another specialty lender Signature Bank was shuttered, and regulators tapped emergency powers to backstop all customers of the two banks. Ripples from this event reached around the world, and a week later Swiss regulators forced a long-rumored merger between UBS and Credit Suisse to help shore up confidence in European banks.

    Wearing many hats

    The dynamic has put big banks like JPMorgan and Goldman Sachs in the awkward position of playing multiple roles simultaneously in this crisis. Big banks are advising smaller ones while participating in steps to renew confidence in the system and prop up ailing lenders like First Republic, all while gaining billions of dollars in deposits and being in the position of potentially bidding on assets as they come up for sale.

    The broad sweep of those money flows are apparent in Federal Reserve data released Friday, a delayed snapshot of deposits as of March 15. While large banks appeared to gain deposits at the expense of smaller ones, the filings don’t capture outflows from SVB because it was in the same big-bank category as the companies that gained its dollars.
    Although inflows into one top institution have slowed to a “trickle,” the situation is fluid and could change if concerns about other banks arise, said one person, who declined to be identified speaking before the release of financial figures next month. JPMorgan will kick off bank earnings season on April 14.
    At another large lender, this one based on the West Coast, inflows only slowed in recent days, according to another person with knowledge of the matter.
    JPMorgan, Bank of America, Citigroup and Wells Fargo representatives declined to comment for this article.

    Post-SVB playbook

    The moves mirror what one newer player has seen as well, according to Brex co-founder Henrique Dubugras. His startup, which caters to other VC-backed growth companies, has seen a surge of new deposits and accounts after the SVB collapse.
    “Things have calmed down for sure,” Dubugras told CNBC in a phone interview. “There’s been a lot of ins and outs, but people are still putting money into the big banks.”
    The post-SVB playbook, he said, is for startups to keep three to six months of cash at regional banks or new entrants like Brex, while parking the rest at one of the four biggest players. That approach combines the service and features of smaller lenders with the perceived safety of too-big-to-fail banks for the bulk of their money, he said.
    “A lot of founders opened an account at a Big Four bank, moved a lot of money there, and now they’re remembering why they didn’t do that in the first place,” he said. The biggest banks haven’t historically catered to risky startups, which was the domain of specialty lenders like SVB.
    Dubugras said that JPMorgan, the biggest U.S. bank by assets, was the largest single gainer of deposits among lenders this month, in part because VCs have flocked to the bank. That belief has been supported by anecdotal reports.

    The next domino?

    For now, attention has turned to First Republic, which has teetered in recent weeks and whose shares have lost 90% this month. The bank is known for its success in catering to wealthy customers on the East and West coasts.
    Regulators and banks have already put together a remarkable series of measures to try to save the bank, mostly as a kind of firewall against another round of panic that would swallow more lenders and strain the financial system. Behind the scenes, regulators believe the deposit situation at First Republic has stabilized, Bloomberg reported Saturday.
    First Republic has hired JPMorgan and Lazard as advisors to come up with a solution, which could involve finding more capital to remain independent or a sale to a more stable bank, said people with knowledge of the matter.
    If those fail, there is the risk that regulators would have to seize the bank, similar to what happened to SVB and Signature, they said. A First Republic spokesman declined comment.
    While the deposit flight from smaller banks has slowed, the past few weeks have exposed a glaring weakness in how some have managed their balance sheets. These companies were caught flat-footed as the Fed engaged in its most aggressive rate hiking campaign in decades, leaving them with unrealized losses on bond holdings. Bond prices fall as interest rates rise.
    It’s likely other institutions will face upheaval in the coming weeks, Citigroup CEO Jane Fraser said during an interview on Wednesday.
    “There could well be some smaller institutions that have similar issues in terms of their being caught without managing balance sheets as ably as others,” Fraser said. “We certainly hope there will be fewer rather than more.”

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    Bank turmoil is boosting appetite for specific sector ETFs. Here’s why

    It appears specific sector ETFs are gaining popularity as a way to cushion bank-turmoil fallout.
    According to VettaFi’s Todd Rosenbluth, the trend applies to ETFs holding only a few large companies in particular industries.

    “[They’re] going to be a complement to a broader S&P 500 strategy,” the firm’s head of research told CNBC’s “ETF Edge” on Monday. “We’re seeing this year that active management and actively managed ETFs in particular have been relatively popular in complement to an existing core strategy.”
    Rosenbluth asserts the narrow focus of big-cap sector ETFs can boost potential gains.
    “[In] the same way that you might do individual stocks of favored names … now you’re getting the benefits of five or six of these companies to augment that,” he added. 
    When asked whether these sector ETFs were attempting to reintroduce FAANG stocks — which refers to the five popular tech companies Meta, formerly Facebook, (META); Amazon (AMZN); Apple (AAPL); Netflix (NFLX); and Alphabet (GOOG) — Rosenbluth explained it’s difficult to build ETFs with exposure to only big-cap stocks because companies might be classified in different sectors.
    “You can’t get that right now easily with an ETF [holding] just those five or six stocks,” he said. “If you really wanted to make a call on just those five or six companies, there’s an ETF that soon is coming.”

    Yet, last week on “ETF Edge,” Astoria Advisors’ John Davi suggested bank upheaval could expose problems lurking in ETFs tied to specific sectors.
    “You need to be mindful of your risk,” said Davi, who runs the AXS Astoria Inflation Sensitive ETF.
    For others, the bank turmoil is creating opportunities.

    ‘Not just a stand-alone opportunity’

    Roundhill Investments, an ETF issuer, is planning to launch three big-cap sector ETFs: Big Tech (BIGT), Big Airlines (BIGA) and Big Defense (BIGD).
    These “BIG ETFs” will join its Big Bank ETF (BIGB), which launched last Tuesday. Its median market cap is $145.5 billion, per the company’s website.
    Dave Mazza, the firm’s chief strategy officer, sees similar opportunities for growth beyond the financials sector.
    “People are bidding up some of the larger names, especially in the banking space, because they may be the beneficiaries over the greater regulation coming there,” he said. “The intention here is that [the BIGB] is not just a stand-alone opportunity, but the idea [of] being a leader and potential sweep down the line.”
    The Roundhill Big Bank ETF is down almost 5% since its launch based on Friday’s close.

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    Investing isn’t free. But here’s why 20% of investors think it is

    Most investors pay annual fees for a variety of services, such as mutual funds and financial advice.
    Roughly a fifth of investors think they don’t pay anything, according to various surveys.
    Consumers often don’t write checks for these services. The money is generally deducted automatically from their account balance.
    High fees can eat into savings over the long term due to the power of compounding.

    Alistair Berg | Digitalvision | Getty Images

    Death and taxes are, as Benjamin Franklin famously declared, two of life’s certainties.
    Investment fees may be a worthy addition to that list in the modern era — though not all investors are aware of this near-universal fact.

    The fees financial services firms charge can be murky.
    One-fifth of consumers think their investment services are free of cost, according to a recent Hearts & Wallets survey of about 6,000 U.S. households. Another 36% reported not knowing their fees.
    A separate poll conducted by the Financial Industry Regulatory Authority Investor Education Foundation similarly found that 21% of people believe they don’t pay any fees to invest in non-retirement accounts. That share is up from 14% in 2018, the last time FINRA issued the survey.
    More from Personal Finance:Prioritizing retirement, emergency savings in shaky economyBank crisis causing recession may depend on ‘wealth effect’The IRS plans to tax some NFTs as collectibles
    The broad ecosystem of financial services companies doesn’t work for free. These firms — whether an investment fund or financial advisor, for example — generally levy investment fees of some kind.

    Those fees may largely be invisible to the average person. Firms disclose their fees in fine print but generally don’t ask customers to write a check or debit money from their checking accounts each month, as non-financial firms might do for a subscription or utility payment.
    Instead, they withdraw money behind the scenes from a customer’s investment assets — charges that can easily go unnoticed.
    “It’s relatively frictionless,” said Christine Benz, director of personal finance at Morningstar. “We’re not conducting a transaction to pay for those services.”

    “And that makes you much less sensitive to the fees you’re paying — in amount and whether you’re paying fees at all.”

    Small fees can add up to thousands over time

    Investment fees are often expressed as a percentage of investors’ assets, deducted annually.
    Investors paid an average 0.40% fee for mutual and exchange-traded funds in 2021, according to Morningstar. This fee is also known as an “expense ratio.”
    That means the average investor with $10,000 would have had $40 withdrawn from their account last year. That dollar fee would rise or fall each year according to the investment balance.
    The percentage and dollar amount may seem innocuous, but even small variations in fees can add up significantly over time due to the power of compounding. In other words, in paying higher fees an investor loses not only that extra money but the growth it could have seen over decades.

    It’s relatively frictionless. We’re not conducting a transaction to pay for those services.

    Christine Benz
    director of personal finance at Morningstar

    The bulk — 96% — of investors who responded to FINRA’s survey noted their main motivation for investing is to make money over the long term.
    The Securities and Exchange Commission has an example to demonstrate the long-term dollar impact of fees. The example assumes a $100,000 initial investment earning 4% a year for 20 years. An investor who pays a 0.25% annual fee versus one paying 1% a year would have roughly $30,000 more after two decades: $208,000 versus $179,000.
    That dollar sum might well represent about a year’s worth of portfolio withdrawals in retirement, give or take, for someone with a $1 million portfolio.

    In all, a fund with high costs “must perform better than a low-cost fund to generate the same returns for you,” the SEC said.

    Fees can affect moves such as 401(k) rollovers

    Fees can have a big financial impact on common decisions such as rolling over money from a 401(k) plan into an individual retirement account.
    Rollovers — which might occur after retirement or a job change, for example — play a “particularly important” role in opening traditional, or pretax, IRAs, according to the Investment Company Institute.
    Seventy-six percent of new traditional IRAs were opened only with rollover dollars in 2018, according to ICI, an association representing regulated funds, including mutual funds, exchange-traded funds and closed-end funds.

    10’000 Hours | Digitalvision | Getty Images

    About 37 million — or 28% — of U.S. households own traditional IRAs, holding a collective $11.8 trillion at the end of 2021, according to ICI.
    But IRA investments typically carry higher fees than those in 401(k) plans. As a result, investors would lose $45.5 billion in aggregate savings to fees over 25 years, based only on rollovers conducted in 2018, according to an analysis by The Pew Charitable Trusts, a nonpartisan research organization.

    Fees have fallen over time

    This annual fee structure isn’t necessarily the case for all investors.
    For example, some financial planners have shifted to a flat-dollar fee, whether an ongoing subscription-type fee or a one-time fee for a consultation.
    And some fee models are different. Investors who buy single stocks or bonds may pay a one-time upfront commission instead of an annual fee. A rare handful of investment funds may charge nothing at all; in these cases, firms are likely trying to attract customers to then cross-sell them other products that do carry a fee, said Benz of Morningstar.
    Here’s the good news for many investors: Even if you haven’t been paying attention to fees, they’ve likely declined over time.
    Fees for the average fund investor have fallen by half since 2001, to 0.40% from 0.87%, according to Morningstar. This is largely due to investors’ preferences for low-cost funds, particularly so-called index funds, Morningstar said.

    Michaelquirk | Istock | Getty Images

    Index funds are passively managed; instead of deploying stock- or bond-picking strategies, they seek to replicate the performance of a broad market index such as the S&P 500 Index, a barometer of U.S. stock performance. They’re typically less expensive than actively managed funds.
    Investors paid an average 0.60% for active funds and 0.12% for index funds in 2021, according to Morningstar.
    Benz recommends 0.50% as a “good upper threshold for fees.” It may make sense to pay more for a specialized fund or a small fund that must charge more each year due to smaller economies of scale, Benz said.
    A higher fee — say, 1% — may also be reasonable for a financial advisor, depending on the services they provide, Benz said. For 1%, which is a common fee among financial advisors, customers should expect to get services beyond investment management, such as tax management and broader financial planning.
    “The good news is most advisors are indeed bundling those services together,” she said.

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    Inside a $218 million private island in Palm Beach — Florida’s most expensive home for sale

    A private island in Palm Beach could become the most-expensive home ever sold in Florida, if it gets its asking price of $218 million.
    Developer Todd Michael Glaser and his partners bought 10 Tarpon Isle — the only private island in Palm Beach — for $85 million in 2021. They built a brand new house, turned the existing structure into a guest house, and added a giant pool, tennis courts and other amenities and have now relisted the property.

    “I paid $85 million without a hesitation because there’s only one of them,” Glaser said. “You watch art, they sell. There’s a Mercedes 300 SLR that just sold for $142 million. … That’s what this is … it’s a one of one.”

    Tarpon Isle, a private island in Palm Beach, Florida, is on sale for $218 million.

    When Glaser bought Tarpon Isle, it held a modest 1940s house and plenty of potential.
    “I came over the bridge, I saw the two trees and I said, ‘Guys, let’s knock down the garage and the guest house and the maid’s quarters and let’s build a brand new house,'” Glaser said.
    The new main house is over 9,000 square feet. With the guest house, tennis pavilion and other structures, the property now has over 21,000 feet of living space. There are 11 bedrooms, 15 full bathrooms and seven half-baths.

    Tarpon Isle, a private island in Palm Beach, Florida, is on sale for $218 million.

    Unlike many Palm Beach mansions, which are Mediterranean-styled giants festooned with gold carvings and mahogany, Tarpon Isle is a study in modern simplicity, where the star of the home is sweeping water views on all four sides.

    The master bedroom suite is a large complex of closets, bathrooms and sitting areas. The larger of two bathrooms is a temple of white Italian marble, covering the floors, countertops, ceiling and oversized shower. A large soaking tub perched in front of the windows overlooks the Intracoastal Waterway.

    A waterfront bathroom inside the main home on Tarpon Isle, a private island in Palm Beach, Florida, on sale for $218 million.

    “It’s the best bathroom I ever did,” Glaser said. “My wife picked it, and she did an incredible job. I’ve never seen anything like this bathroom.”
    Outside, there’s a new 98-foot pool overlooking the views of the water to the south. A large dock can fit multiple boats or a mega-yacht. The guest house features resort-like amenities, including a spa, massage room, salon and entertainment area.
    “That’s the way we designed it,” Glaser said. “When people come to Palm Beach they bring their families, they’re on vacation.”

    A dock servicing Tarpon Isle, a private island in Palm Beach, Florida, on sale for $218 million.

    Glaser said the human-made island, which was built in the 1940s, has a high sea wall. Because it’s well protected in the Intracoastal and well elevated, it has easily weathered big storms and tidal surges, he said.
    Granted, $218 million is an ambitious price, even for Palm Beach. The record sale in the enclave was Oracle founder Larry Ellison’s $173 million purchase of billionaire Jim Clark’s oceanfront estate last year.

    A living space inside the main home on Tarpon Isle, a private island in Palm Beach, Florida, on sale for $218 million.

    Palm Beach is the most expensive real estate market in the country, with an average sale price of nearly $13 million, according to Douglas Elliman and Miller Samuel. Many homes saw their prices more than triple during the pandemic as ultra-wealthy buyers from the Northeast fled to Florida, and the coveted properties in Palm Beach in particular.
    Christopher Leavitt of Douglas Elliman, who is listing the property alongside Christian Angle Real Estate, said interest in the property has been strong, especially from hedge fund managers and finance chiefs looking to relocate south.
    “The buyer of this home is someone who wants the one and only private island on the island of Palm Beach, surrounded 360 degrees by water, accessible by your boat or a private bridge,” Leavitt said. “It’s somebody who wants that one property that no one else has, that one trophy property.” 
    Glaser declined to say what profit he would make if the home sells for its asking price. He added that he and his investors spent “a fortune” on the new home and improvements. But he said the buyer will be making a long-term investment.
    “Whoever buys this house, in five years they’re going to be very happy with the purchase,” he said. “It’s a legacy property that they’ll own for the rest of their lives.”

    Tarpon Isle, a private island in Palm Beach, Florida, is on sale for $218 million.

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    Can you bring weed on a plane? It’s complicated

    Marijuana is legal for recreational use in many states, but possession is still illegal under federal law.
    Travelers looking to bring small amounts of marijuana face confusing state and federal laws.
    Some airports in states where weed is legal have placed amnesty boxes so travelers can throw out their pot before boarding.

    Illustration by Gene Kim

    As weed becomes legal in more states, how and if travelers can bring their stash on board remains up in the air.
    Twenty-one states and Washington, D.C., have legalized recreational use for adults 21 years and older, and 37 states and Washington, D.C., have medical marijuana programs. But marijuana is still illegal under federal law.

    That leaves travelers hoping to fly with pot on domestic U.S. flights to face an ever-changing patchwork of conflicting state and federal laws.
    Traveling between states where marijuana is legal in both the origin and destination may sound straight-forward, but with overlapping jurisdictions and hard-to-enforce guidelines, it gets complicated.

    Can I fly with marijuana?

    Technically, no. Under federal law, the possession and sale of marijuana is illegal.
    Despite President Joe Biden’s recent pardons for anyone convicted of a federal crime for simple possession and his directive to review how marijuana is scheduled under federal law, marijuana is still classified as a Schedule I substance.
    According to the Drug Enforcement Administration, Schedule I substances have no accepted medical use and have a high potential for abuse. That also includes drugs like heroin and LSD.

    And even though airports are locally owned and operated, air travel still falls under federal law.
    “Most people are under the impression that it is acceptable to travel with cannabis since it is legal in California, however, they are not aware of the travel restrictions,” said Karla Rodriguez, police captain at Los Angeles World Airports, which operates Los Angeles International Airport. “Additionally, passengers need to be aware of the legality of cannabis in other states or countries.”
    She said most arrests involve “passengers who take an amount which is more than what is considered personal use.”

    What about medical marijuana?

    Well, that changes things.
    The Transportation Security Administration said that medical marijuana products that “contain no more than 0.3 percent THC on a dry weight basis or that are approved by FDA,” are permitted in both carry-on bags and checked bags.
    TSA agents wouldn’t likely ask to see a medical marijuana card unless the traveler was carrying a larger amount or was traveling through a jurisdiction where weed was entirely illegal, an agency spokesperson said.

    OK sure, but will TSA search me?

    TSA said it is not actively searching for marijuana but rather focuses screening procedures on “potential threats to aviation and passengers” like weapons and explosives.
    “The TSA is looking for anything illegal, but they are not law enforcement,” said William Kroger, a defense attorney who’s represented clients arrested for marijuana at airports.
    Kroger says if agents find marijuana in a passenger’s luggage, the TSA doesn’t have the power to arrest travelers. It can, however, call local police. Some local police officials told CNBC they would follow local laws in that situation.
    The DEA could be alerted by local law enforcement if the quantity of marijuana exceeds personal use or officers have reason to be suspicious that the traveler intends to sell marijuana.

    What if the TSA finds marijuana on me?

    While the TSA isn’t actively searching for marijuana or other federally illicit drugs, if it does find an amount that exceeds local limits, which vary widely for both weed and THC-infused edibles, it will alert local officials.
    Some airports offer amnesty boxes for travelers to discard their pot before traveling. There are 12 at Chicago’s O’Hare International Airport and one at Midway International Airport, according to the Chicago Department of Aviation.
    Cannabis products are legal for personal use in Illinois as of Jan. 1, 2020, and residents can possess up to 30 grams, or about an ounce, of cannabis flower.

    A Cannabis amnesty box at O’Hare International Airport in Chicago
    Leslie Josephs | CNBC Photo

    “When the amnesty boxes are cleared and there are items in the box, officers will create a report, inventory the cannabis or cannabis products and then they will be disposed of similar to how narcotics are disposed of,” a spokesperson for the Chicago Police Department said in a statement.
    In New York and New Jersey, airport police enforce those states’ laws, said a spokesperson for the Port Authority of New York and New Jersey, which oversees the area’s largest airports. New York and New Jersey each legalized marijuana for recreational use in 2021.
    Travelers at Denver International Airport can return their marijuana to their vehicle or pass it to someone not traveling if it’s no more than 2 ounces, according to the Denver Police Department. Colorado legalized recreational pot back in 2014.
    They can also surrender it to police officers where it will be “sent to get destroyed and not returned to them,” said Jay Casillas at the Denver Police Department. “Any amounts greater than 2 ounces will warrant an investigation where they may be subject to arrest and may face charges.”
    However, the severity of the penalty is largely up to the jurisdiction, said Kroger, the defense attorney. In states with harsher marijuana laws, “you could be facing serious time in jail or prison,” he said.

    Can I fly high?

    Airlines’ contracts of carriage, the document that lists policies for everything from overbooked flights to lost baggage, state that intoxicated travelers can’t fly.
    In a practice that’s similar to how a passenger trying to board barefoot will be denied boarding, airlines can refuse to allow a customer to get on the plane if, according to Delta’s rules, for example, “the passenger’s conduct is disorderly, abusive or violent, or the passenger appears to be intoxicated or under the influence of drugs.”

    What about traveling internationally?

    Again, no. Marijuana rules vary across the world, but it is still banned outright in many countries, and while many of the high-profile prison sentences for carrying weed through foreign countries are for large quantities, even smaller amounts could carry hefty fines or more severe punishments.

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    Why there may be no return to ‘normal’ for the U.S. used vehicle market

    A notable decline in used vehicle prices toward the end of last year has been roughly cut in half in 2023, as inventories remain low following vehicle-production disruptions.
    The pause in new vehicle production during the pandemic has upended the used vehicle market and there’s no easy solution in sight anytime soon.
    Cox Automotive doesn’t expect the total number of used sales to return to pre-pandemic levels until at least 2026.

    Customers browse in a used car lot on February 15, 2023 in Glendale, California.
    Mario Tama | Getty Images

    All new vehicles become used cars and trucks once they’re sold.
    It’s an obvious statement, but one that needs to be laid out to explain the root cause for ongoing inventory and pricing issues in the U.S. used vehicle market, which has been a barometer for the country’s inflation levels.

    During the onset of the coronavirus pandemic in early 2020, automakers shuttered factories for weeks to stop the spread of Covid-19. It was an unprecedented action that eventually led to additional supply chain problems, such as an ongoing semiconductor chip shortage, causing factories to cease production again for weeks, if not months, at a time in recent years.
    The lack of production meant fewer new vehicles would become used models for consumers to purchase, leading to inventory constraints in both the new and used vehicle markets, as well as record prices due to resilient demand.
    It’s been three years since those initial plant closures, but American consumers — as well as the Biden administration — hoping for the used vehicle market to return to “normal” pre-pandemic levels shouldn’t hold their breath.
    A notable decline in used vehicle prices toward the end of last year has been roughly cut in half in 2023, as inventories remain significantly down following vehicle-production disruptions. There’s also been an uncharacteristically large number of consumers buying out leases to avoid sky-high car prices and increasing interest rates.
    “It looks like it will persist for some time,” said Chris Frey, senior industry insights manager at Cox Automotive. “It’s really a function of this hole in new production, creating a dynamic where wholesale or general used values are higher because there are millions of fewer new vehicles that would eventually turn into used.”

    Cox Automotive reports wholesale used vehicle prices are up by 8.8% this year through mid-March, according to the Manheim Used Vehicle Value Index, which tracks vehicles sold to dealers at auction. The prices are trending higher, and the index is heading back toward a record of 257.7 basis points set at the start of 2022. It was 238.6 as of mid-March.
    Used vehicle inventory is down 21% from a year ago and off a whopping 26% from pre-pandemic levels of 2.8 million available vehicles in 2019. Cox Automotive doesn’t expect the total number of used sales to return to pre-pandemic levels of about 38.2 million units until at least 2026, Frey said.
    Adding to the production hole is a change in leasing. Cox reports a 20% increase in consumers who leased their vehicles buying them out instead of trading them in from 2019 to 2022. The increase occurred as residual values of the vehicles in some cases were far above expectations, making it significantly cheaper to buy the vehicle than lease another amid inflated prices and rising interest rates.
    “It’s still under a lot of pressure, just like it was last year,” said Benjamin Preston, an autos reporter for Consumer Reports. “Prices came down a little bit … but the bottom line is they’re just way higher than they were before the pandemic.”
    Cox Automotive previously forecast wholesale prices on the Manheim Used Vehicle Value Index to end 2023 down 4.3% from December 2022. The company has not revised that forecast but may need to do so amid the increasing wholesale prices.
    Cox reports the average listed price of a used vehicle was $26,068 in February, the most recent data available, down from records last year of more than $28,000 but significantly higher than the roughly $22,000 average it reported two years ago. Retail prices for consumers traditionally follow changes in wholesale prices.
    So, what’s the solution? There’s no other course but an increase in new vehicles being produced in order to boost the number of future used models. Automakers are expected to lift production this year, but they’ve also pledged to not overbuild like they have in the past.
    “We’re unlikely to go back to pre-pandemic levels. Vehicles cost way more now,” Frey said regarding used car pricing. “The landscape has changed. [Automakers] are not manufacturing as many as they have because they got the taste of gold — huge profits from not having so many vehicles in manufacturing.”

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    More women become truckers as the industry tries to overcome a shortage of drivers

    Women made up almost 14% of professional drivers in 2022, according to Women In Trucking, up from just 7.9% in 2018.
    Women have been joining the trucking industry at higher rates not just for driving roles, as women in dispatcher and safety roles both top 40%.
    Associations like Women In Trucking work to increase the rate of women drivers, technicians and executives, particularly younger women or those switching careers.

    Vanita Johnson
    Courtesy: Vanita Johnson

    After 13 years in teaching and education administration, Vanita Johnson switched to a position she always wanted — behind the wheel of a big rig.
    Johnson took a three-week course in trucking, got her commercial driver’s license and became an independent owner-operator. She eventually joined a larger company and has been hauling shipments for over two years.

    She’s one of many in the trucking industry leading efforts to bring more women into the fold. Associations like Women In Trucking work to increase the rate of women drivers, technicians and executives, particularly younger women or those switching careers, like Johnson.
    “Trucking comes with its ups and downs, but you can overcome each challenge because we have women pioneers that were out there before us that have paved the way,” Johnson said. “You have that support route there to help you navigate through this male-populated industry, and it offers freedom and travel.”
    Johnson said during her time in trucking she’s found her male counterparts to go above and beyond to help her navigate the industry. The wages have also been a plus compared with her teaching salary, she said.
    Efforts to introduce more women to trucking became even more pressing when the Covid pandemic took hold in the U.S., sending the service and education industries into upheaval. Comparatively, trucking never slowed down. Many teachers and service workers made the switch to trucking, along with nurses and other women from the medical field who faced burnout.
    Now, with the industry facing a daunting driver shortage, initiatives to bring in women drivers from other industries have escalated. Unions including the International Brotherhood of Teamsters have worked to end violence and harassment of women on the job and remove barriers to women entering the industry, including safety risks, wage inequities and lack of training and support.

    The share of women truckers has increased significantly in recent years: Women now make up almost 8% of truck drivers and sales delivery drivers, according to the U.S. Bureau of Labor Statistics. That number is even higher — 14% — for Class A license road drivers (which includes any driver who can operate vehicles weighing over 26,000 pounds), almost double what it was just five years ago, according to the 2022 Women In Trucking Index.
    Women also account for a third of C-Suite executives in transportation, compared with nearly 24% in executive positions four years earlier, according to the index.
    Ellen Voie, CEO of WIT, said women often make for quality candidates as truckers because they’re less likely than men to take risks on the road, and they possess strong multi-tasking, communication and organizational skills. According to the American Transportation Research Institute, male commercial drivers are 20% more likely to be involved in a crash in areas such as traversing intersections.
    “More and more women are going into safety roles, like director safety or safety manager, and that’s a great place for women because women are more risk averse, whether it’s in the boardroom or whether it’s as a driver,” Voie said.

    Navigating shortages

    Though many women joined the industry during the pandemic, Covid-19 lockdowns stalled training and testing for truck drivers. Supply chain disruptions during the pandemic, along with surging demand, exacerbated a years-long trucker shortage.
    The American Trucking Associations reported a shortage of 80,000 drivers in 2021 and has cautioned the shortfall could reach 160,000 by 2030.
    To address demand, the industry would have to recruit a million new drivers over the next decade, according to the ATA — although as of 2021, there were just under 2.1 million people employed as heavy and tractor-trailer truck drivers, according to the Bureau of Labor Statistics.
    A BLS report found annual turnover rates at large truckload carriers averaged 94% between 1995 and 2017.
    Demand for product and driver numbers appear to be improving this year, said Mike Kucharski, vice president of Illinois-based J.K.C. Trucking. Volume volatility remains a major problem — leaving the industry in flux with regard to hiring.
    “The American people are changing their diet, they can’t afford things as they used to, so with those things happening, the typical budget and volumes are coming down,” said Kucharski. “We’re kind of all fighting for the same product, and we’re not as busy as we used to be due to inflation.”
    Many truckers are paid only for driving time and are not compensated for overtime or time spent waiting for loading and unloading goods, adding to uncertainty for workers. Many also pay their own fuel costs and lack health care benefits.

    Angelique Temple
    Courtesy: Angelique Temple

    Angelique Temple, who has been in the trucking industry for 23 years, spent two decades pulling hazmat as a company driver, during which time she raised six kids. She switched gears in 2021 to become the owner-operator of her own company Tornado Transport, although she almost lost her business, as she was paying $5,000 a week just for fuel.
    Temple said she now drives routes of under 200 miles and works with local brokers to help ease “rollercoaster” price fluctuations. She runs medical supplies, dry food and other essential products while setting her own prices.
    It’s not so much a driver shortage, she said, as it is a shortage of qualified professionals.
    “You don’t have a lot of people out there that have the dedication and loyalty that it takes to do what needs to be done,” Temple said. “They don’t want to sacrifice. They just want to run and come back and make their money.”

    Women rev up for the industry

    Women have been joining the trucking industry at higher rates for more than behind-the-wheel positions. According to the 2022 WIT Index, women in both dispatcher and safety roles topped 40%, while women in human resources and talent management averaged nearly 75%.
    Women in technician roles, however, represent just 3.7%, according to WIT. The ATA found the industry will need about 200,000 technicians over the next decade to keep up with maintenance demands. The organization’s Women In Motion initiative hopes to accelerate progress to bring women into those roles.

    Trucks were designed for men. Uniforms were made for men. We didn’t even have showers at the truck stops for women because they were locker room showers, so really it wasn’t a level playing field.

    Ellen Voie
    CEO of Women In Trucking

    According to a February survey by insurance agency JW Surety Bonds, 83% of female truckers believed more young people should get into trucking. The survey of 386 truck drivers — 60% of whom were female — found female truckers were 18% less likely than male truckers to feel lonely on the job and 28% less likely to regret becoming a truck driver.
    “There are TikTok videos [where] a lot of women were excited to work independently, their schedules tended to be more flexible, and they’re seeing great pay,” said Maddie Weirman, reactive data lead at marketing agency Fractl, who led the research. “Women are starting to see that there are opportunities for them.”
    About 56% of female truckers made between $50,000 and $100,000 a year, while 41% made under $50,000, according to JW Surety Bonds.
    Driver software company Tenstreet found earlier this year that women were more likely than men to say they were paid fairly for their work at 58.5%, compared to 55.3% for men.

    Women were also more likely to be newer to professional driving and have driven for fewer carriers, yet women were more likely to report a good relationship with their dispatcher, according to the Tenstreet data.
    Brad Fulton, director of research and analytics at Tenstreet, said many women have been entering the industry “on the ground floor” with hopes of shaping it to be more equal and accommodating.
    “As women are getting more experience, they’re starting to realize some of the stresses,” Fulton said, adding that he expects the industry to start focusing more on work-life balance so workers are not “driving themselves into the ground.”

    There are safety concerns, too. A smaller proportion of women truckers, 68%, reported feeling safe when working on the whole, according to JW Surety Bonds, compared with 78% of male truckers. A majority of women surveyed reported carrying pepper spray and a knife to defend themselves in the event of harassment or assault.

    Empowering women truckers

    Sixteen years ago, when Voie launched WIT, the industry was just 3% women. Now, the women-focused organization has over 8,000 members in 10 countries.
    “Trucks were designed for men. Uniforms were made for men. We didn’t even have showers at the truck stops for women because they were locker room showers, so really it wasn’t a level playing field,” Voie said.
    WIT runs a Driver Ambassador Program for hands-on learning, as well as recognition programs like member of the month. WIT also provides mentorship for those entering the industry, as well as self-defense trainings and anti-harassment initiatives.
    Voie said social media has been instrumental in bringing attention to the industry. Clarissa Rankin, a professional truck driver for five years, runs a trucking account on TikTok that has pulled in nearly 40 million likes.
    “One of our top hits on TikTok was just a driver doing a pre-trip inspection, and we know it’s not truck drivers who are watching because they do a pre-trip inspection every day,” Voie said. “It’s people who are curious about the industry and also curious about women being able to do this job.”

    Regan Morton
    Courtesy: Regan Morton

    Regan Morton, a transgender woman in Indiana who helps lead WIT’s LGBTQ Task Force, said the industry has made her feel welcome. But she believes companies should better target potential drivers from the LGBTQ community.
    “The trucking industry, as far as the LGBTQ community, allows you to be able to be yourself throughout the day and not have to constantly deal with other people,” said Morton, who is a Teamsters member.
    Morton, whose father was a truck driver, said health care coverage is often a hurdle, especially for LGBTQ drivers. She said increasingly strict health regulations have made it difficult for drivers with conditions like diabetes to even enter the industry, adding that the long days make it hard to get home for doctor appointments. Some common insurance plans for drivers do not cover all health care needs throughout the gender transition process, she said.
    Despite these challenges, Voie said she sees more women-owned trucking businesses, as well as more women taking over their families’ trucking companies. WIT partnered with Expediter Services to help establish 150 women-owned businesses in transportation, including financing women drivers’ first trucks.
    Cari Baylor, president of her family’s eight-decade business, Baylor Trucking, called her family’s story a “Steven Spielberg, Tom Hanks kind of American dream story,” growing from one truck to over 200.
    Baylor Trucking once “saved Thanksgiving in Canada,” she said, after delivering Ocean Spray cranberry sauce shipments. The company also works with expedited shippers to delivery IVF kits, chemotherapy treatments and even Taylor Swift and NCAA merch.
    She said the industry has made strides in being more inclusive through improvements like automatic transmissions for all body types, more flexible work weeks and advanced technology equipped with everything from video capabilities to radar.
    The industry still has a ways to go with regard to installing better amenities at rest areas and adding safer truck parking, Baylor said, though she noted the benefits of introducing more women into trucking are wide-reading.
    “The trucking industry learned a lesson during the pandemic that we have to be more adaptive to healthier lifestyles for professional drivers regardless of sex,” Baylor said. “I want young women and those graduating from college to realize that they have so many opportunities beyond the professional driving role in the transportation industry.”

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    Nearly $100 billion in deposits pulled from banks; officials call system ‘sound and resilient’

    Federal Reserve data showed that bank customers collectively pulled $98.4 billion from accounts for the week ended March 15, as Silicon Valley Bank and Signature Bank failed.
    Officials at the Financial Stability Oversight Council, meeting in a closed session Friday, insisted the system “remains sound and resilient.”

    A First Citizens Bank branch in Dunwoody, Georgia, on Thursday, March 23, 2023.
    Elijah Nouvelage | Bloomberg | Getty Images

    Regulators again assured the public that the banking system is safe, as fresh data showed customers recently pulled nearly $100 billion in deposits.
    Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and more than a dozen other officials convened a special closed meeting of the Financial Stability Oversight Council on Friday.

    related investing news

    A readout from the session indicated that a New York Fed staff member briefed the group on “market developments.”
    “The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient,” the statement said. “The Council also discussed ongoing efforts at member agencies to monitor financial developments.”

    There were no other details provided on the meeting.
    The readout, released shortly after the market closed Friday, came around the same time as new Fed data showed that bank customers collectively pulled $98.4 billion from accounts for the week ended March 15.
    That would have covered the period when the sudden failures of Silicon Valley Bank and Signature Bank rocked the industry.

    Data show that the bulk of the money came from small banks. Large institutions saw deposits increase by $67 billion, while smaller banks saw outflows of $120 billion.
    The withdrawals brought total deposits down to just over $17.5 trillion and represented about 0.6% of the total. Deposits have been on a steady decline over the past year or so, falling $582.4 billion since February 2022, according to the Fed data released Friday.
    Money market mutual funds have seen assets rise over the past two weeks, up $203 billion to $3.27 trillion, according to Investment Company Institute data through March 22.
    Earlier this week, Powell also sought to assure the public that the banking system is safe.
    “You’ve seen that we have the tools to protect depositors when there’s a threat of serious harm to the economy or to the financial system, and we’re prepared to use those tools,” Powell said Wednesday during a news conference that followed the Fed’s decision to hike benchmark interest rates another quarter percentage point. “And I think depositors should assume that their deposits are safe.”
    Powell noted that deposit flows “have stabilized over the past week” following what he called “powerful actions” from the Fed to backstop the system.
    Banks have been flocking to emergency lending facilities set up after the failures of SVB and Signature. Data released Thursday showed that institutions took a daily average of $116.1 billion of loans from the central bank’s discount window, the highest since the financial crisis, and have taken out $53.7 billion from the Bank Term Funding Program.

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