Chillin' out till it needs to be funded
Despite extended losses on the markets bringing banks to a new low amidst the promised 10,000 Wall Street Job cuts and whittling trading revenues for the second quarter, the Volcker rule has been stuck with lengthy commentary assumed to be not helping the law after the first version saw 12-17 tests on every trade to prove the viability and legality of the trade to be reported to SEC
A government shutdown averted, a market accountability for banks
Fitch however is ahead in derating banks in the US instead of the axe chop meant for Spain, Italy and France (from AAA while its banks hardly look solvent and its own deficit well past the watermark) that is calndarised at S&P keeping the entire Eurozone on ratings watch for three months. Fitch is also alluding to the lack of support for these 8 from the mighty US government which has apparently also managed to avoid a last minute shutdown with a deal for Homeland Security and other government expenses incl veterans benefits till September 30, 2012. the Payroll Tax benefits are likely to be extended again but discussions for the same are still on.
The Eight banks that could receive and would still need suipport have now bveen derated to a minimum support floor rating of A( Individual instrument ratings would be issued for Fitch seemingly goes on to praise these 8 including Morgan Stanley, Goldman Sachs, Citi and Bank of America esp singling out GS and BAC for better capabilities, but while the smaller regional banks can be resolved without capital infusion the big 8 would still need government support ina “stress” scenario Fitch points to globally tightening regulation and reduced profitability for banks even as they improve Capital levels as a warning.
Barclays had a two notch downgrade to A-. Deutsche Bank also had its Support Floor reduced to A. The other two were the French Credit Suisse to A and BNP to A+. France as a sovereign is widely expected to get a downgrade even as it vehemently compares itself to UK’s balance sheet for effect
IMF talks of the great depression
Even as Europe had a nice morning opening after the economic data from the US yesterday, the Euro staying above 1.30, LAgarde made a point to remind everyone that they could be in for as wide a depression as the one in the 30s
Soup kitchens. Dole queues. Jarrow marches. Bank failures. Trade wars. Falling prices. Desperate poverty. Dust bowls. Fascism. The long descent into war.(Guardian)