The Banking and Strategy Initiative

Chillin' out till it needs to be funded

The banks are ready for a comeback..maybe not!

Berkshire Hathaway 2009

Some change is definitely in the air as more focussed and attentive thought leadership is finally coming out of leading bank investment banking teams, until now letting only their own sector equity strategists take the floor. Instead of staying ut and just letting results season pass them by, true leaders come to the fore when their substantive opinion, which can always make or break trends, come to a point where they know they have a winning hand and much as anyone else would like to believe most of us did know when and where to speak about the housing market even in the last decade. A lot of the overhang on the economy can be lifted if banks can actually come into their own again

Here’s hoping for PIMCO

UBS is past the post and the ones looking for a scrunchy comeback from the banks are getting mighty restless esp winning combinations and teams at Citi and JP Morgan as Europe finally faces up to its misdeeds. PIMCO of course is well on its way to making a second big bad call going long on banks at this fas clip without Goldman Sachs back to the steed.

1.1.1 Dimon is on the front foot

Bank regulation probably got blamed squarely on the weekend when Dimon was part of Washington meetings on wy we are slowing growth and also pushed on Canada asking them to avoid ‘bailing out ‘ on themselves by going off the deep end on regulatory over leanings. One does professionally feel that the goose is a little overcooked especially in the Commonwealth’s older charters like Canada and UK

1.2.1 Steve Englander is pretty sure on National FX strategies

Steve Englander of Citi took a big bite today when he pointed at the sore currency strategies of the myriad Swiss, Korean, Brazilian and others pumping money into their own currencies with no end in sight and even China making no money wise decisions choosing seemingly an inglorious basket to keep the home-brewed recipes for fiscal stability a upper hand. The mix of currencies in its reserves basket may give it a headache or to, according to Citi

1.3.1 JP Morgan’s refreshing look at competition to iPad

I was sure about getting caught there? Well, whoever thought it was a good idea is unlikely to survive more than 5-6 weeks as the Amazon product is likely increasing volumes int his market and culling ‘hopes’ for a recession No it would be a real litmus test of whether we really have a recession or not, though perhaps not the only one. yes I believer leadr’s qualities tell on the quality of commentary also and these hree ideas out just today shw the depth of confidence and winning abilities of the survivors at the investment banks, both Citi and JP Morgan effectively loudly disowning the likes of UBS and James Gorman.

Update: Seemingly, that was only a result of news from Apple supply chain cuting its Q4 supply orders, without access to supply chain rumors from dubious expert networks. I would still say it is an improved ment in investment confidenc e in the banks at the most fundamental level 


1.4.1 America is yet not confident of coming back to mortgages with just 300,000 home sales for the month and BfA is still struggling with its plans to get rid of the 2006 remnants at its glorious failures in redesign

1.4.2  Unfortunately the investment banks cannot really hope to become the primary businesses of any of these banks and will stay with a revenue rat of $6-9 bln at best for a year, each reporting $1 bln plus in a quarter with good deals.

There’s a new confidence in the air

It’s distinctly different when opinion makers like us say things are turning around than when instead of lying around in wait , bank leaders come out with substantive opinion on industry and economic trends. Till now we just had equiy economics taking the front seat in media and many of the comments were just about  the banks themselves. Even a Obama Linkedin townhall will probably matter more in such a time than a divided congress and the loud ratings agencies.

So what’s going right for the investment banks

There are new deals to be done in the M&A business even as buybacks take a stranglehold on the cash lying in treasuries, even if in the mid market segment. Also, the good are being rewarded for staying good and the distinctly no. 2 like UBS and Morgan Stanley are being shown the door in most profit calls

The crisis has unfolded probably to the extent it could and there are no unlikely surprises to be thrown from a Deutsche bank rumor o a Europe turning a new leaf to Euro bonds

..and who’s not!

Only UBS and Morgan Stanley and others in a distinctly follower mode in the earlier avatar have been broken. Even niche banks who could be squeezed are probably sitting on agood number of deals like Evercore and others. Europe had to unfold sooner than later but the Euro is not breaking up in a hurry

Of course who is right!

And probably one likes to wait for Goldman Sachs to also come out of it bu that;s not SEC stepping down

Nope just a dalliance in easy fall season

However this could just be early commentaries of an annual plan time as you turn to a new se of trends for nitpicking and find a few more gaps in capital still not covered.

And then back to results season for more uneasy facts

7.1.1 Berkshire Hathaway knows what it’s got

A buyback of more than $28 billion along with Corporate America’s buybacks worth $400 bln are possibly a sign we have run out of ideas for sustainable growth

7.2.1 Greece is bankrupt for all practical purposes, and so Europe has to do everything right to stop from imploding

7.3.1 Basel 3 hit exactly the point where liquidity could hit the entire capital base of a bank and it’s still a problem till that’s made impossible and a lot of ringfencng will have to be still done even if regulators ease up


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This entry was posted on September 27, 2011 by in Financial Markets and tagged , , , , , , , , , , .


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