Risk Management

Deutsche Denial Tsunami Begins: Draghi "Not ECB Fault", IMF "Solid Base"

It is becoming very clear that the Deutsche Bank debacle is getting very serious. How do we know? Simple - everyone is denying everything. Overnight DB CEO Cryan denied any need to raise capital or need a bailout; this morning ECB's Draghi denied low rates were responsible, and denied The IMF's statement the bank is systemically important; and now IMF's Lagarde is denying any need for government intervention.

Is This Why Deutsche Bank Is Crashing (Again)?

Deutsche's dead-bank-bounce is over. The last few days have seen shares of the 'most systemically dangerous bank in the world' plunge almost 20%, back to record lows as the DoJ fine demands reawoken reality that the €42 trillion-dollar-derivative-book bank is severely under-capitalized no matter how you spin asset values. However, another question looms - Is Deutsche Bank cooking its derivatives book to hide huge losses...

Dow Futures Slide Over 100 Points Despite Fed's Dovish Relent; Oil Drops On IEA Pessimism

After yesterday's torrid rally, which sent stocks higher the most in 2 months on the back of Lael Brainard surprisingly dovish comments, we have seen an unexpected profit-taking session overnight in ES, with US equity futures down 0.6%, driven largely by a renewed drop in oil prices which slid after the IEA said a surplus in global markets will last longer than initially estimated, persisting well into 2017 as reported previously.

Here Is The Catalyst That Could Unleash A "Violent Rally In Risk" Today

After years of seeing the Fed operate within this “reflexivity conundrum. the markets have already spoken (meaning already financially tightened enough) to a point where the Fed ONCE AGAIN has to back away from their “hiking threat.”  Back to “none and done,” which will likely merit a pretty violent rally in risk and reversal in rates."

Is A VaR Shock Just Starting: Here Is The Checklist

It appears we have a disagreement between two JPMorgan analysts: while one, namely head quant Marco Kolanovic anticipates a significant deleveraging by quant and algo funds, JPM's fund flow guru is desperate to talk down the threat from a coordinated global selloff, and concludes that a VaR shock may not be imminent after all.

Bubbles And Elevators: From FONC To F##K!

Volumes have been written on behavioral finance and the seemingly “irrational” decisions investors tend to make to avoid straying from the herd. This article examines a current example coined “FOMO” (fear of missing out), in today’s texting parlance. Through a better understanding of the psychological dynamics of bubble mentality, we hope to help investment managers better grasp the complex role they must play when their concern for poor expected returns and higher levels of risk  are pitted against their client’s fear of not keeping pace with the market.

85% Of Wall Street Expects a "Dovish Hike Signal" From Yellen Tomorrow

Earlier this week, Citi's head of G10 FX strat Steven Englander conducted a survey among 350 participants asking them what they expect from Janet Yellen's Jackson Hole speech. According to the vast majority, or 85% of the respondents, Yellen will lean toward one 2016 rate hike with hiking risk “overwhelmingly” in December even as September hiking risk is seen as “modestly underpriced."