Economic Outlook

The Final Shoe Drops On Germany’s Deutsche Bank

Posted by Michael Kern

on Wednesday, 10 July 2019 9:04

Forget profits for Deutsche Bank for 2019. The German lender is undergoing a radical restructuring that will see 18,000 jobs slashed worldwide and has already taken a 5 percent toll on shares.  London was bustling this morning, according to Twitter, with descriptions of staff frantically packing their stuff in order to get out the door before their security badges quit working.

And that was just London.

Trading staff in Asia were cut loose, too, and the purge also launched in the bank’s New York offices.

All in all, 18,000 jobs are expected to be cut by 2022. That means 20 percent of the bank’s staff. But mostly the focus is on investment banking operations, which haven’t earned enough to justify the risks–or the costs.

The restructuring will cost DB $8.3 billion. That comes on top of Q2 losses of $3.1 billion….CLICK for complete article

“The Mood Is Pretty Hopeless”: Scenes Outside Deutsche Bank Offices Evokes Lehman Collapse

Posted by ZeroHedge

on Tuesday, 9 July 2019 9:14

At the end of the day, all of the frenzied whispers in the press about Deutsche Bank CEO Christian Sewing’s sweeping restructuring hardly did it justice. Instead of moving slowly, the bank started herding hundreds of employees into meetings with HR, first in its offices in Asia (Hong Kong, Sydney), then London (which got hit particularly hard) then New York City.

By some accounts, it was the largest mass banker firing since the collapse of Lehman, which left nearly 30,000 employees in New York City jobless. Although the American economy is doing comparatively well relative to Europe, across the world, DB employees might struggle to find work again in their same field.

According to Bloomberg, automation and cuts have left most investment banks much leaner than they were before the crisis, and the contracting hedge fund industry, which once poached employees from DB’s equities business, isn’t much help. Some employees will inevitably find their way to Evercore, Blackstone – boutique investment banks and private equity are two of the industry’s top growth areas – or family offices, which, thanks to the never-ending rally in asset prices (and the return of bitcoin), are also booming.

Oh, and of course, there’s always crypto. Some evidence has surfaced to suggest that many young bankers are already looking to make the leap….CLICK for complete article

Monday’s Bloodbath In Asia Reflects Everything From Liquidity Worries To Tech Supply Chain Jitters

Posted by TheRealHeisenberg

on Monday, 8 July 2019 9:19

An “inauspicious” start to the new week morphed into a full-on rout in Asia Monday as purported “liquidity pressure” tied to forthcoming IPOs helped push Chinese stocks to their worst loss in months and tensions with Tokyo tanked South Korean equities.

The Shanghai Composite dove the most in the region, falling 2.6%, in the worst session since May 6, the day after Donald Trump restarted the trade war. The CSI 300 fell 2.3%, while small caps and tech shares ended the session down 2.7% after shedding as much as 3.4%.

While some of the selling was attributed to the prospect of a less accommodative Fed following Friday’s blockbuster June payrolls print, the imminent launch of China’s new tech board (later this month) sparked concern about liquidity being pulled away from other mainland shares….CLICK for complete article

How Malta Is Becoming the Global Capital of Crypto

Posted by Cointelegraph

on Thursday, 4 July 2019 9:35

Some things never change, like the Megalithic Temples built in Malta over 5,000 years ago. These days, however, that may be the only thing that remains unchanged in Malta. With a population of just under half a million and being mostly famous as a destination for European teenagers to study English during their summer vacation, Malta has recently become a star on the crypto map.

Having already had a positive experience hosting online gambling companies, which makes up a very significant portion (13%) of Malta’s GDP, the island is now turning its head toward the world of crypto in an effort to repeat its previous success. A lucrative tax incentive system, government initiatives, and clear and friendly crypto regulation are bringing fruitful results: Many large cryptocurrency exchanges, such as OKEx and Binance, have already established their headquarters in Malta….CLICK for complete documentary

The Fed’s Stealth Stimulus Has Arrived

Posted by Wolf Richter

on Friday, 28 June 2019 8:31

Let me just throw this out there for us to kick around: The Fed has already accomplished more with its verbiage so far this year than it had in the past when it actually cut rates multiple times, all the way down to near zero, and did trillions of dollars of QE. We’re already seeing the first results. Here’s why.

The US government can directly stimulate the economy by borrowing trillions and spending them in the US on infrastructure, on its employees, armaments, etc. The Fed cannot do this. It can only try to manipulate the credit environment in a credit-based economy.

The way the Fed tries to stimulate the economy is to loosen up credit, meaning it wants to encourage banks and other entities to lend, and encourage or force investors to invest more by taking larger risks for less return, as they begin to chase yield. The hope is that this will result in easy access to borrowed money for businesses and consumers, that they can borrow cheaply, and that they will go out and spend and invest this money. This spending and investment stimulate the economy….CLICK for complete article