Recession

Scandal-Plagued Deutsche Bank Terminates Head Of I-Banking As Part Of Sweeping Restructuring

Moments ago, Europe's largest bank by assets and by gross notional derivatives, announced a raft of high-level management changes as part of an anticipated and sweeping restructuring of key divisions and senior-level committees. As WSJ reports, Colin Fan, the investment-banking co-head responsible for securities trading, will resign effective Monday. But the most profound change is that Deutsche Bank will split its investment bank into two pieces: one, focused on mergers and other deals, corporate finance and transaction banking services such as cash management, and the other on trading and global markets.

After 6 Years Of Austerity, 36% Of Greeks In Poverty

Thousands of austerity measures, dramatic cuts in incomes, incredible hikes in taxes. Five and a half years in deep recession. Three bailout agreements. And where do Greeks stand now? On top of the Eurozone when it comes to poverty. More than one out of three Greeks, that is “36% of the Greek population is at risk of poverty and social exclusion,” the EUROSTAT found out - the highest rate within the Euro Zone.

Weekend Reading: Weighed, Measured And Found Wanting

"Since Washington doesn't understand what went wrong in 2007 and 2008, so the Fed, the White House and Congress are recreating the very same conditions for another financial bubble. If it pops, we could replay the same devastating effects as occurred during the first bubble in 1999 and 2000.

The Slowdown In Global Trade In 6 Charts

The last two US recessions have severely damaged the growth rate in global trade. In each case, the trend growth rate of trade since 1991 (which is when the CPB World Trade Monitor data begins) was effectively cut by at least a percent. Emerging markets have helped to keep global trade afloat especially relative to developed markets, however, even in emerging markets we have seen a step down in the growth rate of trade.

With Traders "Completely Lost", Here Are The Consensus And Contrarian Trades

Credit Suisse has released a reported titled "Client perspectives: lost and bearish" in which it lists the 12 bricks of the global wall of worry and adds that "this is the first time that we have come across so many people who say they are completely 'lost' in the current environment." So, to help out those who just have to be in this market yet share the same total confusion, here is BofA listing what the two key trading camps in the market: "the consensus" and "the contrarians" are doing.

Industrial Production For Oil And Gas Well Drilling Drops To Lowest This Century

Industrial Production growth in The US has now slwoed for 10 straight months, rising just 0.4% YoY in September - the weakest growth since Dec 2009 - signaling the path to recession is clear. Manufacturing production YoY slowed to just 1.4% - the slowest since Feb 2014. For the 8th month of the last 9 IP fell MoM with a 0.2% drop in September as a modest revsion higher in autos was offset by a plunge in Oil and Gas Drilling to the lowest this century (down 4% after rising 1.7% last month).

Russia And Iran Moving To Corner The Mideast Oil Supply

There is no time to lose. Russia is on the march, in unison with the emboldened and enriched Iranians, thanks again to our president. Putin and the ayatollahs know they will enjoy only another 464 days with this president and that none of his likely replacements will be so complacent and flexible, to use his own term. We should therefore expect that they will want to make as much hay as they can while the sun reflects off of Obama’s insouciant grin.

There Goes The Final Pillar Of The US "Recovery": The Loan-Growth Paradox Explained

One year ago we reported that companies were using secured bank debt to repurchase stock: a stunning, foolhardy development. It so unbelievable we promptly forgot this bizarre tangent into "use of loan funds"... Until today when we found that it was, indeed, all a lie and that the banks themselves had become complicit in perpetuating not only the worst possible capital misallocation, but being an accessory to the US stagnation, soon to be replaced with full-blown recession.

BlackRock Warns Of "Land Mines" As Benefits Of Lower Yields For Corporate Issuers Fades

As we have warned numerous times - and any trader old enough to have actually lived through a credit cycle can attest to - there is only so much releveraging shareholder-friendly exuberance firms can do before the company's balance sheet becomes questionable. That inflection point has come for US equities. The deterioration of balance-sheet health is "increasingly alarming" and will only worsen if earnings growth continues to stall amid a global economic slowdown, according to Goldman Sachs and JPMorgan's Eric Beinstein warns "the benefit of lower yields for corporate issuers is fading." The weakness is widespread as BlackRock fears "you’ll continue to see some land mines out there."

The Economic Doomsday Clock Is Closer To Midnight

Central banks are fearful and unwilling to normalize but artificially high valuations across asset classes cannot be sustained indefinitely absent fundamental global growth. Central banks are in a prison of their own design and we are trapped with them. The next great crash will occur when we collectively realize that the institutions that we trusted to remove risk are actually the source of it. The truth is that global central banks cannot remove extraordinary monetary accommodation without risking a complete collapse of the system, but the longer they wait the more they risk their own credibility, and the worse that inevitable collapse will be. In the Prisoner’s Dilemma, global central banks have set up the greatest volatility trade in history.

Schlumberger: This Is "The Most Severe Downturn For Decades", "The Recovery Now Appears To Be Delayed"

"The business environment deteriorated further in the third quarter. However, the cost reduction actions we took in previous quarters and the acceleration of our transformation program enabled us to protect our financial performance in what is shaping up to be the most severe downturn in the industry for decades.... In light of conservative customer budgets for next year, we are therefore entering another period during which we will continually adjust resources in line with activity, as the recovery now appears to be delayed."

3 Things: The Fed Is Screwed

The Federal Reserve is quickly becoming trapped by its own "data-dependent" analysis. Despite ongoing commentary of improving labor markets and economic growth, their own indicators are suggesting something very different. As we have stated previously, while the Federal Reserve may hike interest rates simply to "save face," there is indeed little real support for them doing so. Tightening monetary policy further will simply accelerate the time frame to the onset of the next recession. Of course, the Fed knows this which is why they recently floated the idea of "negative interest rates" out into the markets. In other words, they already likely realize they are screwed.

Ignorance Is Not Bliss

You’re doing yourself a disservice if you don't have a basic working knowledge of what, say, a volatility surface means. We're not saying that we all have to become volatility traders to survive in the market jungle today, any more than we all have to become game theorists to avoid being the sucker at the Fed’s communication policy table. And if you want to remove yourself as much as possible from the machines, then find a niche in the public markets where dark strategies have little sway. Muni bonds, say, or MLPs. The machines will find you eventually, but for now you’re safe. But if you’re a traditional investor whose sandbox includes big markets like the S&P 500, then you’re only disadvantaging yourself by ignoring this stuff. Ignorance is not bliss...