There is little doubt as to Wall Street (and London) shrinking but nobody seems to be able to come up with an explanation for it. Typically willful blindness is the reason, as investment banks no longer want the duties but that just isn’t consistent with what is supposed to be a roaring economy. If anyone were to make out under [...]
As banks have trickled out their third quarter balance sheet filings, we gain more insight into the events of that quarter as well as some additional color as to the ongoing drama of the current one. Perhaps the most startling shift in an otherwise quite busy and at times despondent period was the universal compression of swap spreads into negative [...]
Goldman Sachs just reported an extremely rough quarter, and not just for a bank that has earned a reputation as being on the “right” side of trading. The bank’s (and it is a bank, now) annualized return on equity put it next to BofAML and below Citigroup, of all indignities. The reason, as always, is FICC. Reported revenue there was [...]
I think it is worth re-examining at this point, with a lull in the “dollar” at the moment, the effects of dark leverage upon actual bank mechanics and thus actual “dollar” supply. The idea of liquidity in the wholesale system is multi-dimensional and often confusing as it relates to what is typically believed. For example, the week the world woke [...]
Oh Europe. I have a growing sense that US credit markets are repeating the leadup to last October 15, though there isn’t any obvious expression of any such illiquidity (at the moment). For one thing, the eurodollar curve has taken the FOMC’s bluffs in complete stride, in fact doing the exact opposite as you would expect of a very close [...]
Indonesia has been here before, playing a key role in fomenting the Asian “flu” in 1997 and 1998. As it turned out, the slide in the rupiah last year, caught up in the taper drama of US “dollar” tightening, was just the initial phase of what looks to be shaping up as a protracted “dollar” problem. It never gets treated [...]
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