The market is prone to temporary fits of shared enthusiasm – for emerging-market debt, for Internet stocks, for residential mortgage-backed securities, for Greek government debt. Traders need not wait to see when or whether the profits materialize. IBGYBG, they say – I’ll be gone, you’ll be gone. There are numerous routes to bezzle and febezzle... traders borrowed money from the future. And then the future came, as it always does, turning the bezzle into a bummer.
Deutsche Bank warned it expects to record a third-quarter loss of $7 billion, tied to a huge write-down in its corporate-banking-and-securities segment. The bank said the charges are driven by the impact of expected higher regulatory capital requirements and its disposal of Postbank. It also said it will consider reducing or eliminating its common dividend for fiscal 2015.
DEUTSCHE BANK SEES 3Q NET LOSS EUR 6.2 BLN
DEUTSCHE BANK TO RECOMMEND DIVIDEND CUT OR POSSIBLE ELIMINATION
What if we were to redraw the world map based on the (un)sustainability of national debt levels?
The US and world economies are drifting inexorably into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable “morning after” consequence of the 20-year global credit binge which has now reached its apogee. The apparent global boom during that period was actually a central bank driven excursion into the false economics of household borrowing to inflate consumption in the DM economies; and frenzied, uneconomic investing to inflate GDP in China and the EM. The common denominator was falsification of financial prices. By destroying honest price discovery in the financial markets, the world’s convoy of money-printing central banks led by the Fed elicited a huge excess of financialization relative to economic output.
In the real world, any casino (legal or otherwise) which refused to pay when the “house” lost would quickly be driven out of business
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The US has now joined Canada, Cyprus, New Zealand, the UK, and Germany with plans to seize bank accounts during the next financial crisis.
"As you know, the environment for global macro fundamentals-based trading continues to be challenging. That factor, combined with the lack of certainty over when a recovery will take hold, led us to conclude that the time was right to return capital to you."
But what’s different this time?
Following Friday's disastrous payrolls report, which confirmed all the pre-recessionary economic data and signaled that instead of approaching "lift-off" and decoupling from the rest of the world, the US economy is following the emerging markets into a slowdown in what may be the first global, synchronized recession since 2008, the market saw its biggest intraday surge since 2011 and the sharpest short covering squeeze in history, we are happy to announce that the "market" is now solidly back in "bad news is good news" mode.
The results from Portugal's elections are beginning to trickle in and according to exit polls, Coelho's coalition has prevailed. According to Bloomberg, the ruling coalition of Prime Minister Pedro Passos Coelho has won 38%-43% of vote and 108-116 seats.
Once again the reactions of desperate government policies looks like creating an even worse situation thanks to unintended (though entirely foreseeable) consequences. Amid the prospect of sharply higher shipping taxes in Greece - designed to increase revenues and 'fix' the debt-ridden nation, WSJ reports many of Greece’s world-leading shipowners are actively exploring options to leave their home country. With Greece controlling 20% of the world's shipping fleet, the 'quadriga' of Greek creditors' demands to raise taxes (because debt restructuring is out of the question) on such an 'easy target' as the world's largest shipping industry appears likely to backfire as an entire industry's revenues move out of reach of government taxers.
Moves will be made to ban physical cash in the coming months.
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Good news! Bad news is again great for stocks, and overnight we had just the right amount of bad news from Japan, China and Europe to send stocks surging on the first day of the final quarter.