JPM’s Dimon eyeing Deutsche with Chinese cash

Is Jamie Dimon looking to goose-step into Frankfurt and take over troubled Deutsche Bank using Chinese money?

That appears to be to the story coming out of Germany as Deutsche’s stock spikes more than 6% in European trading on the news.

JPMorgan and Industrial and Commercial Bank of China are looking to take a stake — size unknown –to bolster the troubled bank, the report from the business weekly WirtschaftsWoche said.

WIWO also reported that German Chancellor Angela Merkel had met Axel Weber, the former Bundesbank head who is now chairman of Swiss bank UBS, to discuss his thoughts on Deutsche Bank.

Newly installed CEO Christian Sewing has not given the market any confidence in his ability to turn around the much maligned institution, which has paid nearly $500 billion in penalties and fines to global regulators for its bad banking actions over the last decade.

Sewing is also seen as an impediment to change since he made his bones at the bank during this troubling time as I have written before.

Before the summer ends something will happen with Deutsche Bank. Whether that’s a merger with fellow-troubled German firm Commerzbank or a bailout through cash injections from EU this bank right now is on the ropes and getting pummelled.

Advertisements

Goldman may be running its own “Storage Wars”

How close are we to seeing Goldman Sachs CEO Lloyd Blankfein standing in front of storage unit telling perspective bidders, “You can just look in, don’t touch, don’t go in.”

That the mental image I have from a story moving Thursday morning of Goldman repossessing a 217-ft luxury yacht from a former (i assume) client down in Palm Beach, Fla., according to a WSJ.com story.

Goldman, Morgan Stanley and UBS wealth management units have been active in lending cash to their clients against some esoteric belongings, such as wine collections, art collections and equity portfolios.

These banks are pushing these loans for two very specific reasons. They have an existing relationship with the client and knows his asset holdings. The banks also keep more of the profits from these loans, since there are little broker fees or other charges against the loan.

Goldman’s private bank has quadrupled its overall lending balances since 2012 to $29 billion. Morgan Stanley wealth-loan balances are up 420% since 2012 to $74 billion, according to the article.

To get back to the yacht, the luxury boat is listed for $39.9 million, according to broker​. The outstanding balance of the loan owed to Goldman is roughly $28 million. So there is some wiggle room to haggle with Lloyd.

Libor + 6 banks = no criminal charges

My apologies, I am in the last throes of a kitchen remodeling and its a little crazy in the mornings.

That said, so the Dept. of Justice slapped JPMorgan Chase, Citigroup, Barclays, UBS and Royal Bank of Scotland on Wednesday with a $5.8 billion penalty for pleading guilty to manipulating global currency markets and London Interbank Offered Rate (Libor).

Amazingly, despite regulators having e-mails and other correspondence between the traders — whom called  themselves the cabal — no criminal charges were brought against any persons.

So we found the “culprit” of the flash crash in his parents’ basement in London trading on his own, but when professionals working for banks act in a cabal to rig every loan written, no criminal charges filed. Please see the cashier on your way out.

Libor is used as the basis for loans written across the globe. No matter a mortgage, car loan or line of credit somewhere in the rate calculation Libor is in the equation.


So the Bureau of Economic Analysts has decided its Q1 2015 reading of the economy is skewed by seasonal adjustments. The same adjustments they have made for years all of a sudden is no good.

If you don’t like the outcome of a game, then change the rules. The first reading of GDP in Q1 was 0.05 percent (or 0.2 percent annualized) does not fit into the Fed’s equation of raising rates in the short-term so the formula must be changed.

I figure around this time in early August, when the first read of Q2 comes out showing two quarters of negative GDP ( the next two readings of Q1 will be negative) the BEA will say that Q2 seasonal adjustments are skewed as well. Fed chair Janet Yellen certainly can’t raise rates in a recession.

And so it goes, they must take us for fools.