The capital and now loss projections for Deutsche Bank are, as much as they can be, more straight forward. In terms of Credit Suisse, the dubiousness of the implications is proportional to the “story.” Whereas Deutsche last week shocked Wall Street (and Europe) with a huge potential loss in FICC activities (their CB&S segment), any actual surprise was far overdone [...]
Since some markets seem to be waiting on either longer lingering in ZIRP (US) or renewed and heavier QE (Japan, Europe) it is worth examining exactly what they are anticipating. Obviously, that desire doesn’t extend into the real economy since the downward fluctuation in 2015 pretty much dissolves and absolves any direct monetarism correlation. What is left is a high [...]
After a relief rally, risk assets are at a critical juncture. We may be seeing a bottoming in global risk assets and hopefully another up-leg in the current expansion. But pessimism and risk aversion are high. We will need to see better economic news to alleviate the fears that higher interest rates will push us into recession. The popping of [...]
The wedge pattern that was formed by the S&P 500 Index ((IVV)) finally resolved itself with a big move downward in August. The market corrected to the 1867 and retested that low in late September. Since the beginning of October, the market bounced off that level and has been on a tear. We might finally be in the midst of the [...]
You wouldn’t know it from stock trading or commodities, but when China reopened after its latest Golden Week holiday there was an obvious effect. Stocks have continued to surge while commodities overall have had a good week (copper up another $0.07 today, with WTI at about $50). Inside the money markets, however, China’s open was met with far less enthusiasm, [...]
Most people would look at a 40-month deviation as being rationally altering, maybe even something so permanent. The Fed, on the other hand, along with economists, have convinced themselves that somehow three and a half years is but a temporary detour. And so monetary policy and the recovery outlook itself are supposed to somehow straddle that inconvenience while still emitting [...]
What is taking place on the wholesale level of the supply chain is simply unprecedented. Admittedly, the current iteration of the wholesale data series only dates back to 1992, so there is some possibility of a similar disparity at some point in actual economic history. However, at present, inventory continues onward with only a slight deviation and slowing recently while [...]
It may be unexpected to economists, but the sudden and uniform economic downside that is either appearing or strengthening almost everywhere in the world is closely tracking the wholesale “dollar.” In many cases, that flows through China and so is given that gloss, but there can be little doubt now about either cause or effect. In Japan, machine orders (a [...]
With China prepared to open again after a weeklong holiday absence, the breaking news from Deutsche Bank signaling a huge loss expectation for Q3 is not good timing. As noted previously, China’s various wholesale “dollar” fill, in the end, is truly dependent on a good and robust “dollar” environment appearing sometime soon. Deutsche was one of the last global holdouts [...]
Even a quick glance at recent t-bill rates commands further attention. There is obviously a lot going on in the bills market just in the past few months, which may only be unexpected in the sense that there isn’t a plain connection between US government bills and the fireworks elsewhere. T-bills used to be, however, the primary source of repo [...]
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