Wednesday, October 17, 2018

The Run Begins: Deutsche Bank Hedge Fund Clients Withdraw Excess Cash

Deutsche Bank concerns just went to '11' as Bloomberg reports a number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank. While the vast...

The Effects Of Money On Trade

There can be little doubt now outside of orthodox economics that the global economy is actually slowing, not accelerating as has been predicted. Economists themselves, however, continue to claim that things are getting better when the data strongly suggests otherwise. The latest depressing figures are from a pair of...

A Weaker Currency Is No Longer Economic Elixir It Once Was

A weaker currency, once the cure-all for ailing economies around the world, isn’t the panacea it once was. Just look at Japan, where the yen plunged 28 percent in the two years through 2014, yet net exports to America still fell by 10 percent. Or at the U.K., where the...

Why Wells Fargo’s Executives Will Keep Their Bonuses, Even After Fake Accounts Scandal

Last week, Wells Fargo CEO John Stumpf testified before the Senate Banking Committee after the bank paid fines for creating over 2 million fake customer accounts to boost their sales growth statistics. Stumpf, under fire from senators demanding that the bank claw back executive bonuses as punishment for the scandal,...

Global debt climbs towards fresh high as companies and countries keep on borrowing

Global debt issuance is on course to hit a record high in 2016 as figures showed sales this year topped $5 trillion (£3.9 trillion) at the end of September. Debt issuance rose to $5.02 trillion in the nine months to September 22, according to Dealogic, putting 2016 on course to...

The Deutsche Bank crisis could take Angela Merkel down – and the Euro

There are some words that make such an unlikely pairing that we find it hard to put them together. Italy and efficiency, for example. Or Bake Off and Channel 4. And 'Germany' and 'banking crisis' is another one. Our image of German banks, and the German economy, as completely rock...

Treasury Market’s Biggest Buyers Are Selling as Never Before

They’ve long been one of the most reliable sources of demand for U.S. government debt. But these days, foreign central banks have become yet another worry for investors in the world’s most important bond market. Holders like China and Japan have culled their stakes in Treasuries for three consecutive quarters, the...

Banks to Need Billions More Capital in Tests Under Fed Plan

Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Federal Reserve's annual stress tests that could also scrap some provisions that lenders have criticized. As the Fed has signaled for months, it is considering changes that would raise the...

ECB Board Member Admits Central Bank’s Monetary Policy Risks Tearing Up Social Fabric

Time to toss yet another "conspiracy theory" on the composite heap of "theories that became fact." A recurring theme we have pounded the table on over the past nearly 8 years is that central bank policy has been the primary driver leading to not only a record wealth and...

Profit Slump for S&P 500 Heads for a Sixth Straight Quarter

Analysts have been cutting estimates for U.S. earnings, after earlier projecting a return to growth during the third quarter. The third quarter was supposed to be when earnings growth returned to U.S. companies. Not anymore. Companies in the S&P 500 are now expected to report an earnings decline for the sixth...

Deutsche Bank’s Monumental Mess – Merkel Says No State Aid, Depositor Bail-In Coming Up?

The €72 trillion (notional) derivatives mess known as Deutsche Bank remains under severe pressure. It’s market cap is $17.43 billion. It has no earnings and pays no dividend. On April 23, Deutsche Bank was Fined $2.5 Billion over LIBOR rate rigging. Twenty-one people face criminal charges following a seven-year investigation. On...

Merkel Rules out Assistance for Deutsche Bank, Focus Reports

Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials. The German leader also declined to step into the Frankfurt-based bank’s legal imbroglio with the U.S. Justice Department, which...

UN fears third leg of the global financial crisis – with prospect of epic...

The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal...

Get ready for the mother of all stock market corrections once central banks cease...

Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years. For how much longer can stock markets keep delivering? Is there another...

Two of Fed’s Own Primary Dealers Warn Shock Hike Awaits Markets

There’s uncommon dissent in the ranks of the Federal Reserve's primary dealers over the central bank’s interest-rate decision this week. Two of the Fed's 23 preferred bond-trading partners -- Barclays Plc and BNP Paribas SA -- are betting against their peers and the bond market by forecasting officials will raise...

“We Haven’t Seen This Since The Great Depression” – Gallup CEO Destroys The “Recovery”...

I've been reading a lot about a "recovering" economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week. I don't think it's true. The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from...

Foreigners turn away from Treasuries just when needed most: Analyst

The biggest buyers of U.S. Treasuries have turned fickle on U.S. debt, just when they may be needed most. Peter Boockvar, chief market analyst at The Lindsey Group, points out that for a fourth month in a row, foreigners were net sellers of U.S. notes and bonds, dumping $13.1 billion...

The Coming Bond Bubble Collapse

In this week’s podcast, Michael Pento, fund manager and author of The Coming Bond Bubble Collapse, explains how the United States is fast approaching the end stage of the biggest asset bubble in history. He describes how the bursting of this bubble will cause a massive interest rate shock that...

Foreign Central Banks Sell A Record $343 Billion In US Treasuries In The Last...

One month ago, when we last looked at the Fed's update of Treasuries held in custody, we noted something troubling: the number dropped sharply, declining by over $17 billion, bringing the total to $2.871 trillion, the lowest amount of Treasuries held by foreigners at the Fed since 2012. One...

The End of the G-20: Has the Group Outlived Its Purpose?

Over Labor Day weekend, the leaders of the G-20 countries gathered in Hangzhou, China, for their annual summit. Their goal this year: save the good name of globalization, which has recently taken a beating. In the wake of Brexit, the U.S. Republican presidential candidacy of Donald Trump, the rise...

Bayer’s $66bn takeover bid of Monsanto called a marriage made in hell

Vermont senator Bernie Sanders leads outcry over merger, saying deal is ‘a threat to all Americans’ and should be blocked by regulators. German chemical giant Bayer's $66bn (£50bn) deal to buy controversial US agrochemical giant Monsanto and create the world’s largest seeds and pesticides company is “a threat to all...

Bayer Clinches Monsanto Deal for $66 Billion With Fourth Bid

Bayer AG agreed to buy Monsanto Co. in a deal valued at $66 billion, winding up four months of talks to create the world’s biggest supplier of seeds and pesticides. Bayer will pay $128 a share in cash, the company said in a statement Wednesday. The bid -- this year’s...

Deutsche Bank: The US May Now Be In A Recession

Three months ago, we presented an analysis which showed something disturbing: according to Deutsche, the "current business cycle is already the fourth longest in the post- WWII period, and the corporate debt-to-GDP ratio suggests that imbalances are building", and that worse, as a result of soaring corporate debt and...

Fed’s Eric Rosengren Sees Reasonable Case for Gradual Rate Increases

Federal Reserve Bank of Boston president finds U.S. economy resilient despite drag from overseas. Federal Reserve Bank of Boston President Eric Rosengren said Friday that “a reasonable case can be made” for tightening interest rates to avoid overheating the economy. Holding rates at their current low level for much longer risks...

The Transatlantic Trade Deal TTIP May Be Dead – Something Even Worse Is Coming

Is it over? Can it be true? If so, it’s a victory for a campaign that once looked hopeless, pitched against a fortress of political, corporate and bureaucratic power. TTIP – the Transatlantic Trade and Investment Partnership – appears to be dead. The German economy minister, Sigmar Gabriel, says that...

Why a forgotten 1930s critique of capitalism is back in fashion

Seventy years ago the thinkers and writers of the Frankfurt School warned of capitalism's drift towards a cultural apocalypse. Has it already happened, but we’ve been too uncritical to notice? In Jonathan Franzen’s 2001 novel The Corrections, Chip Lambert liquidates his library. He sells off his collection of Frankfurt School...

Paying Taxes Is a Lot Better Than Phony Corporate Courage, Apple

Every fall the internet and its resident tech mumblers congregate for The Apple Event, a quasi-pagan streaming-video rite in which Tim Cook boasts of just how much money his company is making (a lot) and just how much good it’s introducing to the world (this typically involves a new...

McKinsey Study Shows 81% of US Worse off Than in 2005, France 63%, Italy...

The McKinsey study Poorer than Their Parents? offers a new perspective on income inequality over the period 2005-2014. Based on market income from wages and capital, the study shows 81% of US citizens are worse off now than a decade ago. In France the figure is 63%, Italy 97%, and...

The Weird New Normal of Negative Interest Rates

The United States, Germany, and other economic powerhouses haven't learned the dire lessons of Japan's lost decades. In 1998, when I was a reporter in Tokyo, an event happened that economists once thought impossible. Japan was at the height of its banking crisis, and as panic swelled, short-term market interest...

The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

Do you remember the subprime mortgage meltdown from the last financial crisis? Well, this time around we are facing a subprime auto loan meltdown. In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be...

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