201806.07
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A Slight Hint Of A 2011 Feel

Whenever a big bank is rumored to be in unexpected merger talks, that’s always a good sign, right? The name Deutsche Bank keeps popping up as it has for several years now, this is merely representative of what’s wrong inside of a global system that can’t ever get fixed. In this one case, we have…

201805.31 5

Is Anyone Really Surprised DB’s Problems Had Nothing To Do With The DoJ Fine?

You need only go back a little less than two years for an example. In later 2016, Deutsche Bank was a huge problem everyone was discussing if only because they couldn’t avoid it. Despite “reflation” then gripping much of the world, the German institution stood out for all the wrong reasons. Those were easily dismissed…

201804.24
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The (Official) World Still Has A Ways To Go

Before Mario Draghi took over the ECB, he was head of the Bank of Italy. In between, Draghi was also Chairman of something called the Financial Stability Forum (FSF). This latter organization was created in 1999 “to promote international financial stability through enhanced information exchange and international cooperation in financial supervision and surveillance.” Draghi was…

201802.02 4

The Big German Zombie

It’s kind of a cheap shot to go back and rehash corporate statements from way back in the past. Still, when the topic is banking and why the monetary system refuses more than intermittent and minor progress, it’s worth the revisit. What’s different now than before 2008, really August 2007, is far more than regulation….

201712.04
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Three Years Ago QE, Last Year It Was China, Now It’s Taxes

China’s National Bureau of Statistics reported last week that the official manufacturing PMI for that country rose from 51.6 in October to 51.8 in November. Since “analysts” were expecting 51.4 (Reuters poll of Economists) it was taken as a positive sign. The same was largely true for the official non-manufacturing PMI, rising like its counterpart…

201712.04
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Just When You’ve Thought You’ve Seen It All

I could understand it if its track record was spotty, or partially mixed. But the level of denial runs deep and wide with the yield curve. There is a growing chorus of nonsense, really, which is attempting to spin the flattening as some kind of benign technical rotation that through illogical convolution equals the opposite…

201710.18
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A Derivatives Look At What Happened To ‘Reflation’

The Office of the Comptroller of the Currency (OCC) reports that total gross notional derivatives contracts owned and outstanding by domestic banks rose for the second straight quarter. The OCC statistics are one quarter behind, meaning that though banks themselves are reporting Q3 numbers with earnings all figures shown here are from the official compilation…

201707.24
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Why It Will Continue, Again Continued

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…

201707.12
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Inferring the Relative State of the ‘Dollar’ Shortage In Q1

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….

201705.03
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Noose Or Ratchet

Closing the book on Q4 2016 balance sheet capacity is to review essentially forex volumes. The eurodollar system over the last ten years has turned far more in this direction in addition to it becoming more Asian/Japanese. In fact, the two really go hand in hand given the native situation of Japanese banks. As expected,…