— Jamie Dimon’s 38-page letter to JPMorgan shareholders, April 8 2015
© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
OK, one country can print in its own currency, while the other can’t. There is also no suggestion of an intimate circle of support in the US by which banks and the government prop each other up (as that’s what the Federal Reserve is for).
Here’s a list from the Federal Reserve of good and bad practices by bank holding companies tasked with planning how to stay capitalised under its stress tests and big forward-looking capital reviews. (Ergo: “…designing an internal capital planning process that simply seeks to mirror the Federal Reserve’s stress testing is a weak practice“.)
It doesn’t name names. More’s the pity. Read more
PROHIBITION AGAINST TRANSACTIONS INVOLVING STRUCTURED OR SYNTHETIC PRODUCTS.—
A grateful hat tip to the FT’s Shahien Nasiripour for constructing and sending us the following basic spreadsheet.
It shows the discrepancy between the Fed’s estimates of how the largest banks would perform in its latest stress test scenario, versus how the banks themselves said they would fare (click to enlarge): Read more
Quite the rally in T-bills… continuing apace on Friday, now that the Transaction Account Guarantee has become increasingly, quietly, talked about in the past tense ahead of a year-end renewal deadline.
(Chart of the 1-year T-bill, click to enlarge. The yield on a T-bill maturing in January was close to zero at pixel time) Read more
Goldman’s Q3 is out, and it’s raised the roof in trading / the dividend:
The Board of Directors of Group Inc. increased the firm’s quarterly dividend to $0.50 per common share from $0.46 per common share…
As the FT reports, total net revenues doubled, to $8.35bn, and it’s a marked changed from the third quarter last year.
Although, does this count for something? — 1 per cent quarterly growth in FICC: Read more
US banks as one of the last big carry opps, really? Chart via Ralph Axel at BofA Merrill Lynch:
Of course, the bank has already opened the kimono (as Jamie Dimon might say) on the unwinding – and transfer to its investment bank – of the synthetic credit trades built up by its Chief Investment Office. Read more
*JPM $4.4B PRETAX LOSS FROM CIO TRADING LOSS
*JPMORGAN 2Q EPS EX-DVA $1.09, EX ALL GAINS 67C, EST. 76C
Click for Goldman’s ‘living will ‘ for regulators, listing how it would try to resolve by selling parts of its business under bankruptcy:
In hindsight, CIO’s traders did not have the requisite understanding of the risks they took…
JPMorgan’s chief executive Jamie Dimon is up before the US Senate Committee on Banking, Housing and Urban Affairs on Wednesday, to discuss “A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase?”. (Here’s the testimony Jamie prepared earlier.) Read more
Portrait of a bank capital-counting model in trouble – charts via Barclays Capital:
Trouble getting this stuff through compliance…?
Just the one tweet so far from Goldman Sachs on its own shareholder meeting. Read more
NEW YORK–(BUSINESS WIRE)–JPMorgan Chase (NYSE: JPM) announced today that Ina Drew, Chief Investment Officer, has made the decision to retire from the firm. Ina has served the firm for more than 30 years, most recently as head of our Chief Investment Office.
Matt Zames, currently co-head of Global Fixed Income in the Investment Bank and head of Capital Markets within the Mortgage Bank, will succeed Ina as the firm’s Chief Investment Officer and continue in his mortgage-related responsibilities. Matt will also join the firm-wide Operating Committee. Daniel Pinto, currently co-head of Global Fixed Income with Matt, will become sole head of the group. Daniel will also remain CEO of our Europe, Middle East and Africa region, based in London. Read more
Earlier this year the Fed proposed new rules that would limit banks’ exposure to each other even more than the Dodd-Frank reforms, coming into force next year, already demand. The banks went away to think about it, and it’s safe to say they have some concerns. Goldman Sachs, in fact, has sent the Fed 20 pages-worth of its concerns just ahead of a meeting in New York today with Daniel Tarullo, the Federal Reserve governor, and assorted big bank executives.
In short, Goldman summarises, “parts of the Proposed Rules appear likely to damage, rather than strengthen, the systemic safety of the US financial sector and ultimately the US economy.” Oh, and it’s going to cost the US up to 300,000 jobs according to their calculations and cut economic growth by up to 0.4 per cent. Read more
Something on the Treasury sell-off last week from RBC’s Michael Cloherty, which we found interesting… it’s another theory about what caused the selling, and whether it’s ‘the big one’ for risk.
We noted earlier that during the sell-off, the yield curve flattened, i.e. the rise in yields on longer-dated bonds was more or less matched at the short end. Whereas you might expect (say) 30-year Treasuries to be particularly sold off, if a fundamental paradigm shift in real rates is suddenly here. So – Cloherty says the selling of short-dated bonds reeks of a carry trade being closed out. Read more