Whether it is a correct view or not, the markets seem to be ready to convince themselves that there will be a change in global central bank policy with, if not an across-the-board tightening (is 1/4% tightening?) then certainly a slow-down in liquidity creation which has been going on for the past ten years. Consequently, bond took a hit again today with the ten year actually reaching 1.82% before falling back and the Bund is continued positive territory for a good solid stretch now. But, at the prospect of having the champaigne pump turned off, equities suffered despite a couple of decent earnings reports from entities other than banks in what has been an otherwise disappointing earnings season.
What will be interesting this week will be what signals we get from the Bank of England who, having been on the wrong side for most of the summer may, it seems, be ready to indicate that a continuation of Mark's Mound of Money Making just may slow considerably despite what was indicated just before BREXIT and reiterated since then. If this is the case, things could really begin to move rate-wise which will be good for.....who...or is it whom?
Well, I as you might guess, fells it will be good for everybody provided the central banks get out and stay out of this thing so that some real values might be identified. Problem is there will be a few disruptions, particularly in the equities markets, but coming after the election is determined will have less political influence except for the fact that whoever wins will feel the immediate need to fill the space with fiscal stimulus which is of course even worse than the monetary kind---OK, we can argue that--and which deafens any cry and hence need for the economic restructuring that is so desperately needed everywhere. By this time next year the United States will owe in public securities well over $21 Trillion and that is a lot of jack, Jack. Will there be a reaction in markets? Little Paulie says no. Me. I'm not so sure but I don't have a Nobel. Then again, Lil' Paulie has been telling us that Obama Care is a roaring success for the past seven years. He has been silent on the subject lately and the President of Colombia just won the Peace Prize for a deal his people rejected. So you tell me? Who has more creds around this place?
Anyway, back to banks and perhaps another consensus thought. The big boys, Citi, B of A and JPM all be the street estimates by a rather healthy margin whilst the Savings and Loan Stagecoach got whacked as expected. The interesting thing, however, is the WHY not the WHAT that caused the success which caused so many sighs of relief and a rediscovered confidence in the system. Trading. Yep, that awful business that Dodd/Frank and Crazy Lizzy & Co. wish to obliterate. We'll talk more about that later but for the moment do you think that there might be a way to build a consensus that maybe--just maybe--trading ain't a bad thing. In fact, in more ways than one it might be a very good thing. Perhaps we'll start tomorrow.
Showing posts with label bank earnings. Show all posts
Showing posts with label bank earnings. Show all posts
Monday, October 17, 2016
Friday, April 13, 2012
MORE OF THE SAME
Oh my.
China's economy grew at an annualized rate of only 8.1% in the last quarter , well below estimates. The sky didn't fall but the equity markets did. Italy's 10 year auction didn't help a bit with bids of nearly 6.00% and of all things, J.P Morgan, led by the World's Greatest Banker, beat estimates by just a smidge, along with the World's Greatest Bank, Wells Fargo, who beat by just 2 cents. Gloom was the highlight emotion on the Street this morning. It got worse. The Dow closed down 125 points.
I'm not surprised about China. China, in the space of just a few years has become a middle-income country and as such you simply can't expect double digit growth from such a higher base. Italy--well, we've spoken enough about Europe and the box in which they've put themseves with unrealisticly false assumptions of the overall economic future of the region and a single-minded focus on saving the banks. But frankly, the less than exciting performance of the two banks considered to be the pick of the litter troubles me. Given the economic and job numers we saw from the end of 2010 I would have thought that the claimed pick-up in economic activity would have resulted in a stronger performance but that was not to be. Either the numbers were false or the economy had but a spurt...a false start so to speak...that did not result in increased financing opportunities. Admittedly, I have not gone through the detail of the numbers but with conditions as favorable as they appeared, I expected better. As a result, I am now eagerly awaiting Citigroup's release next week.
The conventional opinion is that in the face of the ongoing work-out of the retail housing sector, it has been difficult for the industry to attain personnel reductions and as a consequence, overall cost reductions. No doubt this is true but I suspect that the projected revenue numbers, even at considerably reduced levels, have been impossible to obtain as well. Coupled with the still almost complete uncertainty in the implementation of Dodd/Frank, the industry does not find itself in a good place. Unfortunately, in my opinion, there is nothing on the horizon to make one become optomistic. This is shaping up as a verry, very tough year.
Anyway, I'm having an early dinner, a bit of wine and off to bed. Everton/Liverpool tomorrow bright and early in the first semi-final of the FA Cup followed on Sunday by Tottenham/Chelsea. Classic cross-town rivalries at Wembly. For some happy few there are things more important than the financial state of the planet. Let's go you Whites!
Have a great weekend.
China's economy grew at an annualized rate of only 8.1% in the last quarter , well below estimates. The sky didn't fall but the equity markets did. Italy's 10 year auction didn't help a bit with bids of nearly 6.00% and of all things, J.P Morgan, led by the World's Greatest Banker, beat estimates by just a smidge, along with the World's Greatest Bank, Wells Fargo, who beat by just 2 cents. Gloom was the highlight emotion on the Street this morning. It got worse. The Dow closed down 125 points.
I'm not surprised about China. China, in the space of just a few years has become a middle-income country and as such you simply can't expect double digit growth from such a higher base. Italy--well, we've spoken enough about Europe and the box in which they've put themseves with unrealisticly false assumptions of the overall economic future of the region and a single-minded focus on saving the banks. But frankly, the less than exciting performance of the two banks considered to be the pick of the litter troubles me. Given the economic and job numers we saw from the end of 2010 I would have thought that the claimed pick-up in economic activity would have resulted in a stronger performance but that was not to be. Either the numbers were false or the economy had but a spurt...a false start so to speak...that did not result in increased financing opportunities. Admittedly, I have not gone through the detail of the numbers but with conditions as favorable as they appeared, I expected better. As a result, I am now eagerly awaiting Citigroup's release next week.
The conventional opinion is that in the face of the ongoing work-out of the retail housing sector, it has been difficult for the industry to attain personnel reductions and as a consequence, overall cost reductions. No doubt this is true but I suspect that the projected revenue numbers, even at considerably reduced levels, have been impossible to obtain as well. Coupled with the still almost complete uncertainty in the implementation of Dodd/Frank, the industry does not find itself in a good place. Unfortunately, in my opinion, there is nothing on the horizon to make one become optomistic. This is shaping up as a verry, very tough year.
Anyway, I'm having an early dinner, a bit of wine and off to bed. Everton/Liverpool tomorrow bright and early in the first semi-final of the FA Cup followed on Sunday by Tottenham/Chelsea. Classic cross-town rivalries at Wembly. For some happy few there are things more important than the financial state of the planet. Let's go you Whites!
Have a great weekend.
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