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’It’s going to be a miserable third quarter for banks, say banks
US bank reporting season is almost upon us and we’re looking forward to investigating the mysteries surrounding the performance of the bulge bracket since the turn of the year.
To give you a sense of how bad it’s been for the 1 per cent,
The mystery of US banks’ second mortgage exposure
How big a hit should US banks take on their second mortgage portfolio?
A question that’s been asked again and again (and again and again) by this blog and others. Regulators are worried: Bloomberg reported last month that the Fed and the OCC are checking whether banks have put aside enough reserves to cover losses.
Moody’s downgrades 12 UK financial institutions
And you thought it was going to be a quiet Friday?
No such luck. Moody’s has today downgraded 12 UK financial institutions. Here are the details (our emphasis):
London, 07 October 2011 — Moody’s Investors Service has today downgraded the senior debt and deposit ratings of 12 UK financial institutions and confirmed the ratings of 1 institution.
Goldman predicts a fire sale of USD assets by French banks
There were a few cheeky titbits in an otherwise workmanlike Goldman Sachs note published Wednesday on US banks.
First up for a teasing: French banks. As we know, US banks are sitting ducklings in the middle of the European maelstrom.
The end of the beginning?
Have Eurozone policy makers finally got it?
The signs are certainly encouraging, says Citigroup.
… in the last 2 weeks we have moved from not being sure that Europe was coordinated enough and didn’t ‘get’ it &
The mystery of US banks’ European exposure
This might just be the most important piece of paper in US banking right now:
FFIEC 009 is the form US banks send to regulators about their exposure to Europe (sovereigns and corporates) and it provides the basis for many of the estimates of vulnerability.
Le Spleen de Morgan Stanley
All is not well in the kingdom of Stanley. The CDS spreads have blown out and the market is concerned. Very, very concerned. Moody’s Analytics is here to tell us all about why that is.
The first [concern] is the exposure of MS to European institutions and the second is the level of trading revenues in the third quarter.
A genuinely stressful stress test
Wouldn’t it be nice if bank stress tests were, well, stressful?
Too often they look like they’re done by him:
When they should be done by her:
Fortunately Arbuthnot’s Mr. Banks, James Ferguson,
Goldman: European banks are killing US
Correlation is to financial journalists what patriotism is to scoundrels. Nevertheless, this chart from a Goldman Sachs note published on Wednesday still suggests just how quickly US and European banks have begun to move in lockstep:
Six weeks to save the eurozone
There might have been nothing concrete from the IMF meeting in Washington over the weekend, but the outline of a plan to rescue the Eurozone and its banks was sketched out.
- There would be a haircut or writedown of Greek sovereign debt of 50 per cent.
Nomura make the (likely, ambiguous) case for the defense
Not intentionally, perhaps, but Nomura’s equity analysts do a half-decent Perry Mason impersonation in a note sent out late Friday.
The note offers a fresh estimate for how much the banks sued by the FHFA stand to lose,
On SocGen’s pawnshop defence
Societe Generale has released ‘hard facts’ about its liquidity position on Monday.
Among the points the bank says it has managed to successfully manage a reduction in access to USD funding through a disposal of USD legacy assets,
Ackermann unplugged
RTRS – SOME BANKS WOULD NOT SURVIVE HAVING TO REVALUE ALL SOVEREIGN DEBT AT MARKET LEVELS – SPEECH TEXT.
A statement of the obvious you might think. But what makes the above interesting is the source:
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
US government attempts bank raid
Friday promises to be an ugly day for US financials:
Stories in the New York Times the Wall Street Journal on Friday suggest that a grand mortgage settlement is farther away than ever and that banks — or at least one bank (guess which!) — are coming under increasing pressure to prepare for the worst.
No tail risk, please. I’m a bank
Spotted by the sharp-eyed creditplumber in a new paper from the Bank of England’s Paul Fisher:
And the footnote:
How many indeed.
Buffett’s $1bn day at the office [updated]
Don’t call it a bail-out.
Our apologies for another BofA post but analyst reaction has been coming in and though most it can be summed as “confidence boost that changes little”, we think there’s a couple of extra points worth mentioning.
Searching for Büffet
There was an interesting close in Europe on Thursday:
Bloomberg reports that DAX futures “fell as much as 4.1 percent as a cascade of trades pushed the volume in the contracts to a quarter of the daily average between 3:45 p.m.
Snap news
Breaking pre-market news on Thursday,
- New York Fed “very concerned” about European banks facing funding difficulties in the US — report.
- Holcim suffers as Swiss franc rises — statement.
- Foster’s Group rejects SABMiller bid — statement.
Goldman: this is not 2008
US financials are melting on Monday:
As at pixel time, we’re facing a broad-based sell-off but the banks are among the hardest hit.
However, Goldman Sachs, appropriately enough, reckons this will be a short-term soft patch.
How Andy Haldane gets his haircut
It’s no coincidence that with the shift to central clearing looming on the horizon, the Bank of England’s director for financial stability is talking about this subject.
Haircuts, that is.
As readers will no doubt be aware,
US financials still lagging
US stocks are up slightly today, and the rally is happening entirely in the so-called “real” economy.
As per the norm since earnings season kicked off last week, financials are underperforming — here’s a look at the S&P vs the KBW bank index:
A touch of anglo-periphery contagion
Adding to the sharp moves in Italian and Spanish banking stocks on Monday were also some rather sharpish slides in the UK banking sector — just ahead of the close of trade.
Not forgetting the Great British Krona versus the dollar…
What’s a Swiss central bank to do?
As has been well documented, the Swiss franc’s relentless rise has been causing no end of headaches.
Swiss exporters, Swiss banks and even Polish and Hungarian mortgage holders have all been affected.
The cost of being a global Sifi
Global Sifi buffers is both the likely new name of FT Alphaville’s pub trivia team and a hotly followed piece of financial regulation.
The Financial Stability Board is not due to formally announce its capital recommendations until November,
How much is this plain vanilla derivative in the window?
Just to be totally clear we’re talking plain vanilla derivatives like, say, interest rate swaps a bank might arrange on behalf of a company. But it seems they’ve taken on a more exotic flavour, of late.
Feedback loops to give you (credit) nightmares
It’s a changed, changed world.
The introduction of bail-ins and burdensharing means capital markets will never be the same.
Intuitively, making creditors share some of the pain of public bailouts make some sense,
Now you see it now you don’t – collateral transformation
It’s an answer — of sorts — to the $2,200bn dollar question.
Avid regulatory watchers will remember that the central clearing counterparties (CCPs) due to arrive under upcoming collateral reform will require billions worth of high-quality collateral to be posted by users of derivatives.