Macaskill on markets: Making Markets Great Again in 2017

By:
Jon Macaskill
Published on:

Jon 'Mystic Mac' Macaskill takes a look at the year ahead in banking and trading

July

SoftBank announces that its $100 billion technology fund is setting a new eventual fundraising target of $1 trillion and upgrading its goals to transform investing in the sector.

"Once people saw I could get access to Donald Trump with vague talk of huge new projects and completely unsubstantiated promises about job creation, and then Apple gave us the tech housekeeping seal of approval, I decided to keep pushing my luck," said SoftBank founder and chairman Masayoshi Son. "Those ex-Deutsche Bank guys I have running the finances for the Vision Fund have already got an awesome office right beside Buckingham Palace in Mayfair and are hard at work creating complex new structures that ensure we will retain most of the profit and offload the risk to junior investors. That is what I call technology at its best!"

August

Former Credit Suisse CEO Brady Dougan reveals that his new merchant bank is already generating more trading and advisory revenue than his old firm within months of going operational.

"It really isn’t very complicated, though I can make it look complex when I need to," said Dougan. "You just raise a few billion dollars from Middle Eastern sovereign wealth fund investors, top it up with some of your own cash, add as much leverage as you can get your arms round and steer well clear of regulators while you put some big trades on. The regulators have been staring at their shoes since Trump got in and his people started messing them about, so there is basically nothing to worry about. Except how long this rally lasts, of course."

September

Bill Gross, the former head of PIMCO and onetime 'Bond King’, uses his Janus fund’s monthly newsletter to declare that the multi-decade global bond rally is finally and irrevocably over.

"I didn’t join the Trump Dump of bonds at the end of 2016 when he was elected because I was too busy working on a complicated analogy likening my cat’s taste in ice-cream to the new Netflix show 'Stranger Things’ and explaining the implications for municipal debt in the US versus Mexican peso denominated high-yield bonds," said Gross. "Where was I? Yes - bonds! It’s time to sell them. Sell them all and get into stocks while the going is still good. Any stocks will do while we ride this crazy growth rocket to what I am already calling the New Everything Is Awesome."

October

The 30th anniversary of the Black Monday market crash of 1987 is followed by a collapse on a bigger scale that is quickly dubbed Trump Tuesday, as investors flee stocks in sectors that had rallied during 2017 on hopes of growth and less regulation.

"Time for Janet Yellen to step down early from failing Fed and let my policies make the markets great again. Huge rally on way!" said president Trump in the first of a series of early hours tweets after the sell-off.

"People are saying this could be the biggest sell-off ever seen!"

"Glad I sold my stocks in time and only have licensing deals in rest of Trump Empire. Goldman guys in team say they sold too. Best people so important!"

November

Investment banks disclose substantial trading losses from Trump Tuesday that wipe out revenue gains made earlier in the year. Goldman Sachs is one of the few banks to avoid the carnage.

"We are taking this opportunity to finally pull out of debt and equity sales and trading," said Deutsche Bank CEO John Cryan. "Our stock dealing losses were broadly in line with those at peer banks, but we have also been forced into a multi-billion dollar write down on our investment in SoftBank’s $100 billion Vision Fund. It turns out that we owned the tranches that wipe out when technology stocks in the 'Special Sauce’ basket fall below a certain level. Live and learn! Maybe!"

December

Goldman Sachs announces it is establishing a consortium called MarcusHedge to handle the risk management and trading needs of a group of 10 banks that were once competitors, but are now withdrawing from market making.

"It appears that some former competitors lack the information flow and key client interaction that we enjoy at Goldman," said CEO Lloyd Blankfein. "Their technology probably isn’t as good as ours either, and God knows, their marketing certainly isn’t. We are pleased that we can now take over the difficult job of hedging and dealing for them with the guaranteed liquidity and reasonable margins on offer at MarcusHedge. The health of the banking system is one thing that president Trump and his team members don't have to worry about as they begin the important work of making the markets great again."