On the heels of resignations from co-CEOs Anshu Jain and Jürgen Fitschen, Deutsche Bank loses another high profile employee as the bank's global head of commercial real estate departs for Blackstone. Jonathan Pollack's departure comes just one month after the bank's head of structured finance Elad Shraga left to start his own fund and seems to lend credence to the idea that Deutsche Bank may be in trouble.
And just like that, Goldman wins again.
Approximately two years ago, a commentary was published entitled “The One Bank”. The empirical foundation for the article (and the paradigm) was an extensive computer model, produced by a trio of academics at a university in Switzerland, and originally reviewed in an article from Forbes.
Emboldened by its recent “unprecedented” prosecutorial success, the DoJ will now pursue a fresh round of MBS-related settlements with banks that knowingly packaged and sold shoddy CDOs. Banks expected to settle in coming months include Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC,UBS AG and Wells Fargo & Co.
When we first brought the world's attention to the 330ET daily ramp in US equity markets, we were shrugged off as conspiracy wonks once again, but 2 years later - as trading activity has become increasingly focused in smaller and smaller windows during the trading day, so the mainstream media has finally been forced to admit that the US equity market has become nothing but Ebay - where everyone waits til the last second.
Having rebounded along with practically every other risk-asset class in the world over the last month or so, Chinese Iron Ore futures are collapsing tonight. Despite the promise of Chinese LTROs expanding credit (just like they didn't in Europe), iron ore prices are down around 4% - the biggest drop in over 2 years - to as low as CNY419 (or around $62) as China Iron & Steel Association warns that overcapacity in the seaborne iron ore market will persist through to at least 2019 as the world’s largest suppliers expand production further.
The Justice Department looks set to extract "unprecedented" guilty pleas from some of Wall Street's largest banks in connection with their role in rigging FX markets. Nevertheless, fears of triggering an "Arthur Andersen effect" will ensure that once again, TBTF institutions will suffer no material consequences.
Putting Uber's latest valuation in perspective, according to CapIq there were just 95 companies in the S&P500 with a market cap over $50 billion, suggesting Uber which did not exist when Lehman filed for bankruptcy, now has a market capitalization greater than 80% of the S&P. Specifically, at a $50 billion valuation, Uber is more "valuable" than FedEx, Marck, Deutsche Bank, General Dynamics, Nissan, Time Warner, Yahoo, Credit Suisse, Heineken and many other companies.
Morgan Stanley breaks down the buyback-equity rally relationship while WSJ flags "big borrowing" by both corporations and investors. In short: corporate debt issuance is at record levels and so are buybacks, stock prices, and margin accounts. When the cycle finally turns, look out below.
Bloomberg goes to China and discovers what we've known all along... that it's "as bad as the data looks, or worse."
"The world-beating surge in Chinese technology stocks is making the heady days of the dot-com bubble look tame by comparison...the industry is leading gains in China’s $6.9 trillion stock market, sending valuations to an average 220 times reported profits," Bloomberg reports, in yet another example of how stretched the margin-driven rally in Chinese stocks has become. We present the only chart you need to understand how this will end.
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- Tensions with Warren camp could loom over Clinton campaign (Reuters)
- Ackman Report on Herbalife in China Figures in Probe (WSJ)
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- Menendez's fate could sharpen Republicans' edge in Senate (Reuters)
- IRS Chief Chides Ted Cruz Over 'Abolish the IRS' Mantra (BBG)
- Yemen Houthi fighters backed by tanks reach central Aden (Reuters)