We present the latest testament to Europe's 2+ years of failed Negative Interest Rate Policy. This week Eurostat published the latest quarterly savings rate data for the Euro area. What it found is that at 12.8%, the gross household savings rate in Q2 2016 had jumped to the highest level observed since the 13% in Q3 2011, confirming the ECB's NIRP policy has been a failure.
"In examining some of some of our favorite indicators’ recent trends, we did find evidence for an imminent recession. While the range of signals is wide, in aggregate they do suggest that, if data were to continue to weaken in line with the recent pace, history would point to a recession in the second half of 2017"
"We do not particularly like the profile of a credit where performance is skewed to an outcome that is so inherently unpredictable – in this case, guessing what a regulatory fine will be.... DB is likely to be a weak bank for several years from now, though, even with a capital increase."
A rally in global risk that started during last night's first presidential debate on the market's take that Hillary came out on top fizzled, following news that the DOJ is assessing how big a criminal fine it can extract from Volkswagen (-3.8%) over emissions-cheating "without putting the German carmaker out of business", while Iran's oil minister Zanganeh told reporters Iran is ununwilling to freeze output at current levels. Deutsche Bank dropped to a new all time low while its default risk hit fresh record highs.
The highly-anticipated first presidential debate of 2016 is finally upon us and here are all the things that you need to know but are likely too lazy or simply not interested enough to track down on your own
For the first time in history, yesterday saw VXX (the VIX ETF) traded more volume than the most-traded stock in the S&P 500. With speculative positioning at record shorts (extreme levered long stocks) and volume soaring beyond Aug 2015's previous record, we suspect this will not end well...
Goldman has been using the proceeds from the new deposits to directly fund speculative activity such as trading and investments, as well as more conventional activity such as creating looans. Goldman Sachs built up its consumer bank, led by 40-year-old Goldman partner and credit trading veteran Gerald Ouderkirk, whose job is to use consumer deposits and other types of funding for trades, investments and loans.
Price swings in financial markets have become increasingly muted as investors mull the outlook for monetary policy in the world’s biggest economies, but with a little turbulence starting to creep into markets, this record-breaking collapse in risk perceptions (and record levels of leveraged speculation) is a recipe for disaster.