Forums  > General  > DB  
     
Page 1 of 1
Display using:  

Jurassic


Total Posts: 255
Joined: Mar 2018
 
Posted: 2019-07-07 17:38
https://www.foxbusiness.com/financials/deutsche-bank-to-cut-18000-jobs-exit-equities-sales-by-2022

Maggette


Total Posts: 1151
Joined: Jun 2007
 
Posted: 2019-07-08 07:21
In Germany you will always have public support if you kick out "these speculators" in favor of classical "solid" commercial banking :).

Ich kam hierher und sah dich und deine Leute lächeln, und sagte mir: Maggette, scheiss auf den small talk, lass lieber deine Fäuste sprechen...

nikol


Total Posts: 784
Joined: Jun 2005
 
Posted: 2019-07-08 10:30
Morgan Stanley follows

https://www.bloomberg.com/news/articles/2019-07-08/morgan-stanley-turns-bearish-on-global-stocks-as-challenges-grow

Jurassic


Total Posts: 255
Joined: Mar 2018
 
Posted: 2019-07-08 11:16
"Low interest rates, for example, make investment banking less profitable."

Why is this so?

nikol


Total Posts: 784
Joined: Jun 2005
 
Posted: 2019-07-08 16:44
Range of factors.

Major motivation for a company to go public (company does it once) is to get cheaper financing (loans) from banks. Low near zero interest => there is no "cheaper" loan, all are cheap => companies lose incentive to go public, except startups. Also those complex rules for dissemination of information by public companies. See how "world wide favorite" Elon Musk plays his game..

And see yourself how startup landscape changes.

- from the way how banking industry generated profit: legal consultancy, access to their private bank's clients-investors, underwriting.

- to ICO's, STO's or VC's directly (all those startup networks, boot-camps, cradles, communities etc. offer pre-selection, training, initial funding, project prototyping, mentoring, networking, scaling up).

Also, imagine that all publicly traded companies make their own blockchained distributed ledger of stocks and tokenize them. Everything goes to wallets and will be traded inside digital exchanges, like those crypto-exchanges. Depositary Companies, Clearing Houses become retarded or reduce their function to "cloud based" security specialists.

Another dimension is geopolitical.

Jurassic


Total Posts: 255
Joined: Mar 2018
 
Posted: 2019-07-08 20:07
that is only considering the ECM business really though

nikol


Total Posts: 784
Joined: Jun 2005
 
Posted: 2019-07-08 20:34
Derivative portfolio of Global Markets is plain forward, i.e. discount(r).E[S_T]. All these zoo of underlyings as spots, volatilities, correlations, asset classes etc. only obfuscate this simple fact. Underlying S_T is just notional for the banking book, which generates an oldie Net Interest Income (basically margin on interest) and which is going down and forces banks to dig into business of transactions (quickly explored by FinTech).

While banks spend money protecting NII, their source of liquidity and ultimate protection (in case of bad times) - deposites - has dried out.

PS.
>> that is only considering the ECM business really though <<
The title of article posted by you has this "deutsche bank to ... exit equities sales"

deeds


Total Posts: 448
Joined: Dec 2008
 
Posted: 2019-07-10 11:50
Hi Nikol

thanks for acute observations...seems writing plain forward on S_T may not suffice...we probably shouldn't be thinking simple lognormal diffusion here, but at least some kind of delta-gamma evolution of portfolio punctuated by event sensitivity and tail risk?

Don't want to overcomplicate, but not sure 'plain' is fair...forward on a portfolio of options doesn't seem like forward on a security or portfolio of simple securities...

Likely missing something, look forward to your correction

nikol


Total Posts: 784
Joined: Jun 2005
 
Posted: 2019-07-10 12:18
I am grossly oversimplifying, but think about banking business from the point of view of bank's CEO who has little to do with stochastic calculus.

In their perception "derivative portfolio" was linked to facilitation of clients hedge needs. Then it grew to the standalone betting machine which he thinks is possible to constrain with Market and Credit Counterparty risk limits. But at the bottom, what matters is funding rate and possibility to have static hedge. Otherwise, there is Risk of Joke like this.


deeds


Total Posts: 448
Joined: Dec 2008
 
Posted: 2019-07-10 13:50
Thanks, context now understood.

Agree

: )))

EDIT: (data point there for you on my sociology, Jurassic, in a quant valuation role and i took the first possible misreading!)

nikol


Total Posts: 784
Joined: Jun 2005
 
Posted: 2019-08-28 12:53
A week before collapse of Lehman NP had messages with bold hints (especially if read backwards). Today it is in MarketWatch

https://www.marketwatch.com/story/a-lehman-like-market-disaster-could-happen-this-week-analyst-warns-2019-08-27

15 Sep it will be 11 years since the previous one.


PS. I am thinking about the use of all those https://www.moodysanalytics.com/-/media/whitepaper/2018/economic-capital-model-validation-a-comparative-study.pdf
Previous Thread :: Next Thread 
Page 1 of 1