JP Morgan reported late last month that its total exposure to oil & gas credit (directly on its books, I would assume) is $44 billion, or which $19 billion is currently rated junk. There was no update as to junk or junk-like corporates beyond energy, which in the end might be the more pressing concern. The old joke is that [...]
Barclays has received all the media attention in the past few days after announcing its exit from Africa. Specifically, the bank intends to divest enough of its 62% stake in the Africa unit so as to skirt tougher UK regulations intended to “ringfence” domestic operations; to keep the global bank from potential global financial horrors recurring and devastating once more [...]
Standard Chartered reported a massive yearly loss for 2015, the bank’s first in almost thirty years. The results were so bad that the company has publicly stated it might even “claw back” bonuses from about 140 executives. If the firm is truly interested in assigning blame, however, it might first look to Ben Bernanke and Janet Yellen (as primary representatives [...]
You simply cannot act as a money dealer when the money you are dealing is highly suspect. I am not writing about money in the true sense, such as any tangible form that falls under property laws of custody and bailment, but rather the wholesale “money” that is derived under the much looser and unconstrained terms of financial laws and [...]
With quarterly earnings we get quarterly bank earnings. Interest in them should be heightened by all that has happened since June 2014. And it is, only for seemingly the wrong reasons. Deutsche Bank, the latest, reported shockingly negative preliminary results which only continued the trend. Even though the media largely gets it backwards, at some point as enough time passes [...]
It’s one of those myths that persist no matter how many times it fails to live up to itself. Perhaps that is due to the fact that it originates in simplifying assumptions that allow econometric models nothing more than avoiding disqualifying singularities (infinity) in the equations. I am thinking about the assumption that is widely used in orthodox theory that [...]
Behind our new paywall, I have been documenting the behavior of “dollar” money markets as they relate to China and elsewhere (global, general liquidity) but recent data in repo demand a more open airing. There are numerous indications that US$ markets are a total mess, none more so than repo. That starts with GC repo rates that remain above the [...]
I covered a good deal of the background here, so I should only reiterate that it is a profound difference in actual mechanics this time as opposed to last. At the end of June 2004, Alan Greenspan’s Fed commanded that money market rates follow a new federal funds target (from 1.00% to 1.25%) and money rates did so. Of course, [...]
Now that the FOMC has announced its intentions, it has to sit back and wait to see if it can actually do anything. This is the direct consequence of using the federal funds rate as the primary target, as it is a dead market that nobody really uses anymore. The only reason the Fed is still leaning on federal funds [...]
Now that the FOMC has done it, we get to hear about how it was surely the “right” time for it. Unlike September, conditions are supposedly an order of magnitude more settled. That has given the policymaking economists the green light to make sure they start the normalization process before “overheating” becomes the central concern. With August a fading memory, [...]
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