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Deutsche Bank forecasts US recession

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The Federal Reserve’s fight against inflation will spark a recession in the United States that begins late next year, Deutsche Bank warned on Tuesday.

The recession call, the first from a major bank, reflects growing concern that the Fed will hit the brakes on the economy so hard that it will inadvertently end the recovery that began just two years ago.

“We no longer see the Fed achieving a soft landing. Instead, we anticipate that a more aggressive tightening of monetary policy will push the economy into a recession,” Deutsche Bank economists led by Matthew Luzzetti wrote in the report.

That forecast is driven by red-hot inflation, with consumer prices rising at the fastest pace in 40 years. Hopes that inflation would rapidly cool off have been dashed, in part because of the war in Ukraine.

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Inflationary pressures have broadened out, raising concern that the Fed will have to rapidly raise interest rates to get prices under control. Deutsche Bank pointed to how energy and food commodity prices have spiked since Russia invaded Ukraine.
“It is now clear that price stability…is likely to only be achieved through a restrictive monetary policy stance that meaningfully dents demand,” the Deutsche Bank economists wrote.

In other words, the Fed can’t just tap the brakes on the economy. It needs to really slow the economy down.

Fed Governor Lael Brainard said Tuesday the Fed will need to “rapidly” shrink its balance sheet and “methodically” raise interest rates to cool off inflation. “It is of paramount importance to get inflation down,” Brainard said in a speech.

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Although Deutsche Bank cautioned there is “considerable uncertainty” around the exact timing and size of the downturn, it’s now calling for the US economy to shrink during the final quarter of next year and the first quarter of 2024, “consistent with a recession during that time.”
The good news is Deutsche Bank is not forecasting a deep and painful recession like the past two downturns.

Rather, the bank expects a “mild recession,” with unemployment peaking above 5% in 2024. That would still translate to considerable layoffs. During the Great Recession unemployment peaked at far higher levels of 14.7% in 2020 and 10% in 2009.
This coming recession would allow inflation to get back towards the Fed’s target by the end of 2024, Deutsche Bank said.

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“With the unemployment rate receding only slowly following the peak, inflation should continue to moderate, falling to the Fed’s 2% objective in 2025,” Deutsche Bank said.
Dimon sees a slowdown that ‘could easily get worse’
Others have recently warned of a growing probability of a recession, though they have mostly stopped short of predicting an outright downturn.

There is at least a one-in-three chance of a recession in the next 12 months, Moody’s Analytics chief economist Mark Zandi told CNN late last month. “Recession risks are uncomfortably high — and moving higher,” Zandi said.

Goldman Sachs has similarly said recessions chances have climbed to as high as 35%.
“The war in Ukraine and the sanctions on Russia, at a minimum, will slow the global economy — and it could easily get worse,” the JPMorgan Chase CEO Jamie Dimon wrote in his annual shareholder letter Monday, recalling that the 1973 oil embargo sent energy prices skyrocketing and pushed the world into recession.

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Fed Chairman Jerome Powell, on the other hand, pointed out in a speech last month that there have been instances in the past where the Fed was able to achieve a soft landing: Fighting inflation by raising rates without causing a recession. Powell pointed to 1965, 1984 and 1994 as examples.

However, the Fed chief also conceded there is no guarantee it will be able to pull off that feat this time.
“No one expects that bringing about a soft landing will be straightforward in the current context,” Powell said, “very little is straightforward in the current context.”

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Crime

Union Bank keeps mum as EFCC arraigns employee over fraud (Photos)

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The Economic and Financial Crimes Commission (EFCC) on Monday arraigned a former employee of Union Bank, Abdulmalik Salau, and two others for cybercrime and money laundering involving about N1.403 billion.

The other accused persons are Ismaila Atumeyi and Ngene Dominic. EFCC announced the arrest of the defendants in November.

The anti-graft agency’s spokesperson, Wilson Uwujaren, said in a statement that the trio were arraigned before the trial judge, Tjinani Ringim, of the Federal High Court in Ikoyi, Lagos.

They face 18 charges to which they all pleaded “not guilty” on Monday.

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Following their “not guilty” plea, the prosecuting counsel, Rotimi Oyedepo, called for the commencement of their trial, a request he anchored on the provision of section 273 of the Administration of Criminal Justice Act (ACJA).

“Therefore, we will, with all humility, ask your Lordship for the acceleration of this trial.

My Lord, Section 300 of the ACJA also expects the prosecution to give a very brief summary of the case it has against the defendants,” the lawyer said.

How defendants allegedly diverted bank’s N1.4billion’

Mr Oyedepo also informed the judge that the prosecution had lined up six witnesses to testify against the defendants.

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He said the prosecution would, through the witnesses, show to the court “how the defendants agreed among themselves to hack into the database of Union Bank Plc, transferred funds belonging to the bank and its customers and used the proceeds of this unlawful activity to acquire properties for themselves.”

He added that the prosecution would show how the third defendant, a former member of staff of Union Bank Plc, allegedly worked with the others and “succeeded in hacking into the database of the bank”

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He alleged that the defendants, in different instalments, moved over N1.4 billion into the accounts of FAV Oil and Gas Limited and Atus Homes Limited.

The prosecuting lawyer added: “The exhibits that the prosecution will tender include the documentary exhibit that shows that the sum of $480,000 was found in the possession of the third defendant and that the sum of N326, 400 million cash was found in a black Escalade car in the possession of first and second defendants.

“My lord, the case is such that, in its nature, requires the cooperation of both the prosecution and the defence team to see its expeditious determination.

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“I, therefore, urge your lordship, pending the determination of the case, to remand the defendants in a correctional facility, where adequately trained personnel will see to their welfare and wellbeing.”

EFCC alleged that part of the offences allegedly committed by the defendant was contrary to and punishable under section 16(1) of the Cybercrimes (Prohibition, Prevention, etc.) Act, 2015.

Another of the offences was also said to violate section 18( a), 15 (2) of the Money Laundering Prohibition Act, 2011, as amended and punishable under section 15(3) of the same Act.

Defence lawyers deny allegations, apply for bail

Responding to the prosecuting counsel, Bolaji Ayorinde, the lawyer representing the first and second defendants, Messrs Atumeyi and Dominic, said: “No iota of evidence has been admitted against the first and second defendants.

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The defendants having pleaded “not guilty” to the charges, Mr Ayorinde said “they are constitutionally and legally under the presumption of innocence until otherwise determined by the court.”

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The defence lawyer added:* “In order to further the presumption of innocence of the first and second defendants, we filed on November 30, 2022, an application for bail seeking your lordship’s admission to bail of the first and second defendants pending the hearing and determination of the charge against them.

“The prosecution has responded to the application by serving on the first and second defendants a counter filed on 5 December 2022.”
He said in ensuring an expeditious and speedy dispensation of the case, he was prepared to move the application for bail immediately.

The application for bail for the first and second defendants is ready for hearing. The summons for bail is dated November 30, 2022. Since it seeks admission of the defendants to bail in very liberal terms, the grounds of the application are well stated in the summons,” he said.

Mr Ayorinde, who described the offence as bailable, stated that the defendants, “who were arrested and detained as far back as November 1, 2022,” would not jump bail.

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He maintained that the “incarceration of the first and second defendants ought not to continue, even if on some terms. Their rights to bail have not been taken away; the charges preferred against them are bailable.”

The third defendant’s lawyer, Babatunde Ogunwo, also denied the allegations levelled against his client and “adopted “wholeheartedly” the argument of Mr Ayorinde.

EFCC’s lawyer, Mr Oyedepo, opposed the defendants’ bail applications.

“In the very unlikely event that the court disagrees with our submissions, we pray your lordship to impose such conditions that will secure the attendance of the defendants, particularly the first and second defendants whose applications are being argued.”

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The judge adjourned until Tuesday for ruling on the bail application of the first and second defendants.

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One year old boy drowns after falling into bucket of water in Anambra

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A boy, 1, has d!ed after falling into a bucket of water in Nnewi, Anambra state.

The child’s parents reportedly left him in the care of his siblings when the tragedy occurred on Saturday, Dec. 3.

The siblings were busy playing when the child made his way to buckets of water arranged outside and fell into one.

He was found too late.

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Videos shared online show loved ones praying for the boy to come back to life. No one is seen performing CPR in the video.

Sadly, the boy gave up the ghost.

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Men who refuse polygamy contributing to prostitution – Ned Nwoko

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A Nigerian lawyer and politician, Prince Chinedu Munir Nwoko, popularly known as Ned Nwoko, has accused men who do not marry more than one wife of contributing to immorality in society.

The former lawmaker, who stated this in his recent interview with the Guardian, urged Nigerian men to emulate the northern men by marrying more than one wife.

He said: “Many women are out there without a husband, especially in the southern part of the country, and there is a high level of prostitution. If the southern men emulate their northern counterparts by marrying more than one wife, that could probably change the situation.

“An average southerner may have one wife with girlfriends, and he is spending money on the girlfriends, sometimes even more than his wife.

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“For instance, the man, who has three wives, concentrate on them, every money he makes is spent on his family, and he is more likely not to have a girlfriend or concubines. The money those with several girlfriends spend on them is a gift, not an investment in the family.”

Nwoko, who has multiple wives, noted that he and the Ooni of Ife, Oba Enitan Ogunwusi, are serving Nigeria by marrying many wives.

Ned, who further claimed to have the same background as Ooni, explained that their grandfathers were kings and had served Nigeria in that capacity. “And we are now also serving Nigeria by marrying many wives.”

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