dark leverage

Didn’t Notice the Proposed Changes To the SLR? Don’t Worry, Most Markets Didn’t Either

By Jeffrey P. Snider|2017-07-11T16:14:20-04:00July 11th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US Treasury released its first report (under Trump) on re-examining financial regulations and their impact on economic growth. The publication was little noticed because most people don’t much care about Supplemental Leverage Ratios (SLR), though they should. For decades, regulators allowed banks to operate under Basel rules as if capital ratios were sufficient criteria for identifying risks, only to [...]

Further Trying To Define Liquidity

By Jeffrey P. Snider|2017-05-22T18:10:46-04:00May 22nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On December 3, 1999, Enron Communications announced that the company had begun operations selling bandwidth as an energy commodity. After publicizing the venture in May that year, it seemed natural given that they had been selling similar products in the energy sector, pioneering all sorts of products along the way. As the internet matured there was no way Enron would [...]

Trying To Define Liquidity

By Jeffrey P. Snider|2017-05-19T12:43:07-04:00May 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What is about math that makes us feel comforted? Numbers are objective, of course, but the using of numbers is not. Even in the hard sciences calculations are not strictly calculations for their own sake, they are interpreted and therefore given subjective meaning. I don’t intend to detour this argument into a teleological one, but in some ways that just [...]

The Eurodollar’s Soul; Part 2

By Jeffrey P. Snider|2017-05-02T17:15:44-04:00May 2nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Part 1 is here. The story of the asset bubbles is one of eurodollars alone. We can tell so much of the history of the past few decades by examining its pieces. The primary component has been derivatives, these financial instruments that are largely misunderstood shrouded often by what can appear to be incomprehensible complexity. That their own purveyors more [...]

The Eurodollar’s Soul; Part 1

By Jeffrey P. Snider|2017-05-02T17:16:26-04:00May 2nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You could say that SunTrust dodged a bullet. The Georgia bank was itself an amalgam of smaller banks cobbled together during the deregulation of the 1980’s. On the one side were the Florida subsidiaries based in Orlando, what came to be known as the Sun Bank. On the other was the Trust Company of Georgia, both coming together in 1985 [...]

China And Reserves, A Straightforward Process Unnecessarily Made Into A Riddle

By Jeffrey P. Snider|2017-03-07T18:01:05-05:00March 7th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]

The Math Thickens

By Jeffrey P. Snider|2016-10-26T16:34:03-04:00October 26th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It has been my contention for some long while that one of the biggest parts of this “rising dollar”, that is, again, nothing more than a euphemism for the various ways in which there is a “dollar” shortage, is balance sheet math. The problem in as simple terms as perhaps possible is that positions were taken, balance sheets constructed, and [...]

More Of The Same From Frankfurt

By Jeffrey P. Snider|2016-10-14T17:17:49-04:00October 14th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is quite interesting that two pieces of likely interconnected news hit today about everyone’s favorite German bank. First, Reuters reported rumors that C-suite officials from Deutsche Bank alerted their HR to perhaps expect double the job cuts from what was previously announced. Last October, the bank claimed that it would need to shed about 9,000 employees. Apparently, that might [...]

Suspicions About Bank Math: A Systemic Story Told Through Deutsche

By Jeffrey P. Snider|2016-10-11T18:18:15-04:00October 11th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As perhaps another in a very long line of indications as to what is unholy and wrong about today in banking and finance, over the weekend it was reported in the Financial Times that Deutsche Bank had received an improper accommodation on its “stress test.” In what can only be described as a clear example of cheating, DB’s capital position [...]

Zeroing In On ‘Something’; Another Bank Anecdote

By Jeffrey P. Snider|2016-10-06T17:16:13-04:00October 6th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If we objectively analyze what is taking place with global banks, it is that they are facing new constraints due to volatility and conditions across different capacities that are much different than modeled expectations. This was supposed to be the Hollywood ending but instead there is only “global turmoil.” This difference isn’t new; it has been ongoing at various speeds [...]

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