There was a sigh of relief, when moments ago JPM reported that it had beat expectations of a $1.25 print, when it announced $1.41 in adjusted EPS, with total revenue sliding by $700 MM to $24.1 billion but also beating lowered expectations of $23.8 billion. The largest U.S. bank by assets reported a profit of $5.52 billion, or $1.35 a share before 6 cents in adjustments, a drop of 6.7% compared to the profit of $5.91 billion, or $1.45 a share, in the same period of 2015. However, perhaps reminding that not all is well, JPM's consolidated loan loss reserve was a material $439 million greater than the preceding quarter and the biggest reserve build in six years, since Q1 of 2010.
Massive borrowing to pay the interest is everywhere and always a sign that the the end is near. The crack-up phase of China’s insane borrowing and building boom is surely at hand.
This morning's 160 point spike in Dow Futures - out of nowhere - was predicated on hopes of an Italian bank bailout. While this may seem like an odd reason to "buy buy buy" US equities, in the new normal, it really is not.. and when put in context, the 'bounce' in EU banks should do more to scare than soften investors' concerns...
... consider mom and pop and other people who read Barron’s. They are saving for retirement and to put their kids through college. They might have depended on a historic 8%-like return from stocks and bonds. Well, sorry. When interest rates get to zero—and that isn’t the endpoint; they could go negative—savers are destroyed. And savers are the bedrock of capitalism. Savers allow investment, and investment produces growth.
"We continue to live in a low default world for now though. Even though defaults picked up in 2015, B/BB default rates were still comfortably below their long-term average which they have been for well over a decade now with 2009 being the only exception. Indeed last year’s default rate for global Bs (up from 0.9% to 2.7%) was still lower than all of the first two decades of the modern era of leveraged finance up to 2003. So in spite of all the challenges we face this era has been characterized by astonishingly low default rates. There are clear signs the cycle is turning though, especially in the US."
it has been a rather quiet session, which saw Japan modestly lower dragged again by a lower USDJPY which hit fresh 17 month lows around 170.6 before staging another modest rebound and halting a six-day run of gains; China bounced after a slightly disappointing CPI print gave hope there is more space for the PBOC to ease; European equities rose, led by Italian banks which surged ahead of a meeting to discuss the rescue of various insolvent Italian banks, while mining stocks jumped buoyed by rising metal prices with signs of a pick-up in Chinese industrial demand.
"I Used To Be A Big Deal... And Then A Billion Dollars Walked Out The Door" - Hugh Hendry's Sad StorySubmitted by Tyler Durden on 04/10/2016 20:45 -0400
"A funny thing happened at the end of 2013 I wrote a letter to my new clients and I began with the preface "what if I was to tell you that I'd become bullish on equities; is that something you'd be interested in." The resounding message no. A billion dollars walked out the door.... "What, really, you're bullish?" - Hugh Hendry
According to Keith Neumeyer in his latest interview with SGT Report, that could spell disaster for socio-economic stability. Neumeyer, who is the CEO of one of the world’s top primary silver producers First Majestic Silver and the Chairman of mineral bank firm First Mining Finance, says that should The Fed and government policy makers implement negative interest rates and continue on their current course of bailing out big business while impoverishing average Americans, we could well see riots in the streets.
Things are going from bad to worse for the efficacy of the grand - and failed from the beginning - experiment known as Abenomics. As Bloomberg reports, Larry Fink's Blackrock has changed its stance on investing in Japan, and joins Citigroup, Credit Suisse, and LGT Capital Partners, the $50 billion asset manager based in Switzerland in their decision to head for the exits. Ironically, Blackrock's decision comes only a few months after blogging about "The Case for Investing in Japan", in which they explicitly cited increased demand for Japanese stocks.
The rules of the game are changing. Those stuck within the old paradigm of mainstream finance face huge threats to their retirement....and quite possibly even their current standard of living.
The yen’s strength may be tripping up U.S. stocks as the collape of the BoJ-inspired carry trade pressures leverage and risk-taking around the world. As Bloomberg notes, in the last 10 instances the yen rallied at least 1 percent against the dollar, the Standard & Poor’s 500 Index lost 0.8 percent on average, the most since at least 2008.
"...it was a miracle that the cameraman went unharmed..."
In late January, we asked "who will offer the first negative rate mortgage?" We didn't have to wait long before Denmark's Nordea Credit unleashed this idiocy. And now two banks in Belgium have followed suit, paying instead of charging interest on mortgages to a handful of customers. That all this will end in blood and a lot of tears is clear to anyone but the most tenured economists.
Customers flocked to the Heweilai Restaurant chain in the southern Chinese city when it introduced robots last year, but the chain has stopped using the machines. A staff member said the robots couldn't effectively handle soup dishes, often malfunctioned, and had to follow a fixed route that sometimes resulted in clashes."The robots weren't able to carry soup or other food steady and they would frequently break down."