Back in September, the IMF issued a generic warning about EM corporate debt. The organization had estimated that total borrowing had exploded, from about $4 trillion in 2004 to $18 trillion in 2014; and perhaps even more than that. Concerns over such bloat typically focus offshore, and not without good reason. However, that understates the true degree of risk since [...]
Goldman Sachs is cutting back more in its staff than previously announced. Though not yet confirmed, Bloomberg writes that the reductions in the fixed income business are being increased. After posting absolutely horrible results for Q1, the job cuts were expected. The continuation of them, however, seems to be more drastic than first thought even though “market” conditions improved into [...]
Goldman Sachs did not disappoint. The bank’s earnings for Q1 were a disaster slightly worse than what was already anticipated as beyond bad. There was nothing that the firm did that it can say it did well, as Goldman’s CEO admitted there was weakness or “headwinds across virtually every one of our businesses.” For eurodollar or wholesale banks, that has [...]
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 [...]
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 [...]
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 [...]
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 the dominant feature of August was rising interbank “dollar” rates; everything that followed out in the open was traced to “whatever” was taking place in funding markets. Repo rates shot upward, as did unsecured LIBOR (leading to serious credit risk implications via TED). All that led into the yuan crisis escalating beyond the PBOC’s rather limited control (which [...]
Goldman Sachs reported weak earnings today, following Bank of America Merrill Lynch yesterday. The core problem at each is their dealer businesses, though it is difficult to get at that central function in the lumpy, conglomerated mess that passes for (incomplete) financial statements. Goldman’s FICC “revenue” dropped by almost a third in the second quarter from a Q2 2014 that [...]
The Federal Reserve under Alan Greenspan and then Ben Bernanke has escaped, largely, responsibility for the panic in 2008 mostly because there is no direct link between monetary policy and the housing bubble. The most stinging criticism that comes out of the era is Greenspan’s “ultra-low” interest rate setting for federal funds, but there is no smoking gun in the [...]
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