The US Treasury Department announced today that it has completed an auction of 20-year bonds. Quite unlike the one 7s auction – you know, that one – this particular bond sale was positively uninteresting. Like all the rest of the bills, notes, and bonds since February 25, there an overwhelming number of bank dealers and other participants some of whom [...]
Perhaps it shouldn’t come as a surprise. After all, during the first quarter of this year several key banks announced they had had enough. Goldman Sachs, Nomura, Credit Suisse, as well as others, they all broadcast cuts to key operations. The FICC stuff, or bond trading to put it euphemistically. The very place the world actually gets dollars. Only, they [...]
It isn’t just US or European banks which are shrinking. The nature of this post-August 9, 2007, world is just that – global. Sure, there are regulations which have made investment banking more expensive. But there isn’t a rule or law that Wall Street (really Lombard Street) wouldn’t “discover” a way to circumvent it if they all thought it was [...]
In January 2017, there was a lot of praise for Goldman Sachs especially in London. This stood in obvious contrast to another global peer being savaged. While Deutsche Bank couldn’t pull its name out of the sewer, GS’s London unit was heralded for standing up when the market needed it. Brexit was a fascinating story in ways that had absolutely [...]
In the continued absence of regular data, as the US federal government attempts to get back up to speed before the next lull, it is perhaps appropriate to continue on with this week’s parade of anecdotes. Here I’ll discuss three of them, each seemingly unrelated to the others. To begin, we start with Chinese robots. It is the age of [...]
Goldman Sachs reported FICC revenues of just $1 billion in Q4 2017. That was the lowest for the Wall Street firm, technically a bank, since it converted from properly a securities business to one during the worst of 2008. That was 50% less in “bond trading” than Goldman had produced during Q4 2016. You start to get the sense that [...]
Goldman Sachs was the latest Wall Street bank to jump on low volatility. Despite an enormous gain in prop trading, most of the rest of the firm’s results were moving in the wrong direction. In its market making segment, for example, the firm booked $2.1 billion in net revenue in the third quarter, 22% less than what it took in [...]
Part of “reflation” was always going to be banks making more money in money. These days that is called FICC – Fixed Income, Currency, Commodities. There’s a bunch of activities included in that mix, but it’s mostly derivative trading books forming the backbone of math-as-money money. The better the revenue conditions in FICC, the more likely banks are going to [...]
The OCC reports that total gross notional derivatives outstanding jumped by nearly 8% in Q1 2017 over Q4 2016. At $178 trillion, that is even more than the reported total for Q3 last year. The latest estimates largely confirm the idea that bank balance sheets were relatively more accommodative in 2017 than especially later 2016. Among the more buoyant categories [...]
It may sound overly basic, but the times being what they are there is a very well deserved need to be elementary about certain things again. That starts with banks and really defining what is and is not one. When money was money, banking was a very simple procedure, though not quite so stylized and rudimentary as it is often [...]
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