Macaskill on Markets
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Sideways: The bankers are coming for AI!
Junior bankers should relax about the threat to their jobs from AI and lean into opportunities to bluff their way to Wall Street glory. -
Macaskill on markets: How to win the rate-hike PR war
A move back up in rates is creating a PR battle among Wall Street banks. JPMorgan was punished for a cautious outlook, Goldman Sachs promoted strong fixed income trading results and Bank of America projected a Zen approach to rate moves. -
Sideways: Powell’s Basel III surrender makes strategic sense
The Fed chair has made a remarkable, virtually unconditional surrender to opponents of his plan for Basel III implementation in the US. The tactical withdrawal is embarrassing, but it makes strategic sense.
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A US climate bill filled with green credits will create business for banks and provide relief from the backlash against ESG products.
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West Virginia state treasurer Riley Moore has opened another front in a campaign by Republican officials in the US against banks that promote ESG policies.
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HSBC Asset Management’s head of responsible investing has had it up to here with consultants and regulators lecturing him on climate change risk.
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Luring star bankers from rivals – like Citi’s appointment of JPMorgan veteran Viswas Raghavan – can bring hidden costs beyond the expense of replacing stock options for the lucky new hire.
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Wall Street bankers tempted to pick a fight with the Federal Reserve should take a lesson from the insider trading plea deal by investor Joe Lewis.
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Opposition to the proposed Basel III endgame for US banks is now so widespread that a climb down by the Federal Reserve is likely. Wall Street bankers like Jamie Dimon can stop crying wolf about increased capital requirements and think carefully about publicly threatening their regulators.
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Our resident seer hears Ted Pick say don’t worry about the $20 million Morgan Stanley loyalty bonuses.
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Banks and investors opposed to European Union derivatives clearing plans have made an astonishing charge: the EU is worse than the US in jealously guarding its own markets.
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A tactical retreat on crypto regulation might help SEC chair Gary Gensler to avoid being bogged down in a war of attrition for the rest of his term.
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Tottenham Hotspur’s Joe Lewis was indicted for insider trading just before yen volatility presented an opportunity for profitable currency dealing.
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Banks including NatWest and JPMorgan are struggling to put out reputational risk-management fires.
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An odd legal case trying to pin the blame for Credit Suisse additional tier-1 (AT1) bond losses on former chief executive Brady Dougan and other veteran managers could complicate the task of recovering losses for holders of $17 billion of bonds that were wiped out in the takeover by UBS.
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Veteran banker Tom Montag is to join the board of Goldman Sachs in a bid to bolster support for embattled chief executive David Solomon. Weak second quarter earnings could make this task harder.
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Could trading of US sovereign credit default swaps trigger a global systemic meltdown? Probably not, but default swap shenanigans aren’t helping to calm jittery markets.
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The bank has started the process of choosing a successor to CEO James Gorman just as it tries to settle an investigation into its equity block trading practices. This could pose a challenge for Ted Pick.
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JPMorgan’s AI model to interpret central bank messaging came out just as it emerged that Jerome Powell had been pranked into discussing policy with Russian provocateurs. Euromoney’s distinctly obvious heuristics model (D’Oh!) might be needed.
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Relative winners after a year of interest rate hikes include Bank of America and Citigroup. Losers are led by regional US banks, while alternative asset managers argue that higher rates present a historic opportunity.
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Michael Klein can’t be expected to ‘devote significant time and attention’ to the unlikely prospect that UBS will allow a CS First Boston spin-off without being paid. Greensill-style invoices for Klein’s theoretical future services could be the answer.
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Interest rate risk management has been complicated by the fall in yields after the US bailout of SVB’s depositors. Clients may feel that hedging chiefly benefits Wall Street dealers rather than themselves.
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Goldman Sachs likes to mix it up when it comes to choosing peer banks for market share comparisons.
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Commodity trading could deliver further hefty profits for banks, led by Goldman Sachs, but there are multiple risks as well as opportunities for dealers.
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The UK broadcaster’s chair Richard Sharp is familiar with accusations of conflicts of interest from his time at Goldman Sachs.
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Goldman Sachs might wonder if the time is coming to rebrand from being Wall Street’s Bank of Dave (Solomon).
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FTX founder Sam Bankman-Fried faces the full wrath of US authorities, as rival agencies compete to make the most hyperbolic charges against the former crypto exchange head. Death by metaphor could be his provisional sentence.
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The gating of Blackstone’s $69 billion private real estate fund Breit highlights the risks in semi-liquid investment vehicles, even ones that perform strongly. Pitching US private market exposure to European and Asian retail investors may be slowed by the setback.
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Euromoney’s Mystic Maca looks into what’s in store next year and sees some big Wall Street reshuffles.
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Elon Musk is full of praise for his bankers at Morgan Stanley. It’s a shame his $44 billion Twitter deal is set to cost the bank money rather than earning a tip for good service.
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Bankers are sending mixed messages about market strains. Dire warnings about year-end pressures, pleas for regulatory help and assurances that banks can sort this out are being deployed simultaneously.
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From Spacs and securitized products to executive compensation and supply-chain planning, Credit Suisse could split its investment bank into more than three parts.
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Removing UK bonus caps and undermining the BoE could exacerbate a sterling crisis while entrenching US IB dominance.
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Wall Street’s junior human capital resources may not appreciate that there is now a bear market for their output, and that could spell tough times ahead.
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Bank shares have failed to close a valuation gap with fintech competitors despite the prospect of higher interest income from rate hikes. Will the Fed’s newly tough stance on inflation-busting finally give bank stocks some respect?
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If Rishi Sunak prevails in the race to be the UK’s prime minister, then Goldman Sachs will still have one alumnus as head of a leading European economy, even if Mario Draghi steps down from leading Italy.