JP Morgan’s CEO Jamie Dimon caused a stir yesterday with his 45-page annual letter to shareholders. The phrase that gained him so much widespread attention was, “there is something wrong with the US.” Dimon mentioned secular stagnation and correctly surmised it was the right idea if for the wrong reasons. He then gave his own which included a litany of [...]
More than ten years after Alan Greenspan confessed to not understanding bonds and interest rates, the same assumptions that underpinned Greenspan’s “conundrum” remain as convention. If the Fed raises the federal funds rate by target or by corridor, then all rates should rise. It is believed to be just that simple, a fact (the belief) further established this week by [...]
We had become either sensitive or desensitized, depending on your definitions, to quarter ends full of turmoil and intrigue. In the monetary world, especially last year, each of the four seemed more interesting than the one preceding it – which was saying something given the state of the world during that time. Most of all, however, it was especially striking [...]
It has been my contention for some long while that one of the biggest parts of this “rising dollar”, that is, again, nothing more than a euphemism for the various ways in which there is a “dollar” shortage, is balance sheet math. The problem in as simple terms as perhaps possible is that positions were taken, balance sheets constructed, and [...]
It is quite interesting that two pieces of likely interconnected news hit today about everyone’s favorite German bank. First, Reuters reported rumors that C-suite officials from Deutsche Bank alerted their HR to perhaps expect double the job cuts from what was previously announced. Last October, the bank claimed that it would need to shed about 9,000 employees. Apparently, that might [...]
As perhaps another in a very long line of indications as to what is unholy and wrong about today in banking and finance, over the weekend it was reported in the Financial Times that Deutsche Bank had received an improper accommodation on its “stress test.” In what can only be described as a clear example of cheating, DB’s capital position [...]
If we objectively analyze what is taking place with global banks, it is that they are facing new constraints due to volatility and conditions across different capacities that are much different than modeled expectations. This was supposed to be the Hollywood ending but instead there is only “global turmoil.” This difference isn’t new; it has been ongoing at various speeds [...]
When Alan Greenspan raised rates more than a decade ago, he just commanded that they be raised and the markets dutifully obeyed. The myth was unchallenged that the Fed could, if it wished, flood the market with bank reserves to reduce rates or contrarily starve it of reserves to raise them. The events of 2007-09 were essentially direct defiance to [...]
Since rumors of a much lower DOJ settlement went viral last week, Deutsche Bank stock has rebounded. From a low of $11.48 last Friday, the stock was trading today above $13. This isn’t, of course, indicative of an end to all woes for the German bank, merely the latest is a long line of temporary reprieves. The problem for Deutsche [...]
In many ways it is surprising the bond selloff hasn’t been bigger. After all, the recovery narrative of the unemployment rate has had almost everything going for it since February, at least in terms of perceptions playing into expectations. There was the usual spring rebound in economic data that aided in the “worst is past” argument, while oil prices and [...]
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