Comments
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FHWith the ECB exiting their bond buying in sovereign debt in December 2018, the only major buyer of Italian issues in recent years is taken away. Italy 10Y credit spreads are already close to 400 Bps above Germany. Rising rates are irrelevant compared to this credit story. Banks swap fixed sovereigns for floating ones. Not to mention that nobody really buys full CDS protection against IG sovereign holdings, available instruments also hardly offer liquidity for outstanding debt of 2600 billion USD. In case there will not be any miraculous solution (such as a new ECB program), Italian Banks will be in negative equity territory once spreads widen 100 more Bps. Watch how Italian spreads move equity markets and bunds. Italian spreads are the story these days. This does not even take into account the trillions of NPLs still on balance sheets. One could also question, why Italian spreads are this far off in the first place. Is the market unjustified in pricing in Italy's default ? I do not think so. It is their easy way out.
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KNThis gentleman does not seem to understand the inherent and hidden risks in the EU. Perhaps this was just a sales pitch?
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WMItalian banks just look like a disaster waiting for either a massive bailout (bail-in). In either case it will be just the "next" European bond crisis. At what point does everyone realize the Euro will not survive and why can't they get ahead of this inevitability? It is extremely difficult to believe that Deutsche Bank can survive any future European banking crisis and that German government bail outs will be necessary. Jerry is clearly a sharp practitioner per his resume, but he is discussing a very dry topic and it feels like he was somewhat political in his comments. Just didn't do it for me as an informative narrative on the banks......and the trouble Europe is really in.
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BW#Mises
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CESince 2005, 50 European banks and a Swiss Bank conspired along with their traders and stoled 55 billion euros from European as well as American Tax Payers. This was a scam lead by Germany & a story on the front page of October 19, 2018 Le Monde and continued on 4 full pages. What are the fines to each of the banks? How will European investors react to another theft by the banks?
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fcyawn...
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GFPLEASE PLEASE PLEASE!!! I have asked multiple times. PLEASE voice over the questions so we can HEAR them. There is some great content in these presentations, but the video is JUST A TALKING HEAD. There is no advantage to watching it versus listening to it EXCEPT the questions are only flashed on the screen for a few seconds. Trying to figure out what the question was from what the speaker then says is a terrible distraction, and often makes me lose the train of what they are trying to convey. You have multiple talented people on your staff who could do the voice-over of the questions, so the additional investment of time or money would be negligible, and it would make these presentations much more useful and friendly. Or am I missing something? Is there some over-riding reason that the questions must not be spoken?
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KBWhat’s up with the dizzying, try hard editing? Could you please keep camera angle still and/or make it audio only?
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RFGreat!!! Maybe next year. Thank You!
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OCI am surprised that he is recommending banks at the end of business cycle. There is something wrong with the banks, given that they are underperforming with increasing interest rates.
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MPAural Ambien
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CTwhats that saying about "hated" ideas ?
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NGMakes perfect sense that once the ECB stops its QE and corporate spreads widen out again, together with a steeper yield curve, that EU banks can start the process of rebuilding their profitability. So far, so obvious. The real question is how far this is reflected in the market already. I fear the bump up will be less than spectacular, but a certain amount of bullish impetus should be seen from the banking sector.
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CTwhy so many thumbs down?
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OOLike the topic a lot, but wish Jerry talked in greater detail. I find that it is a little too general and superficial, particularly with Italy and DB - use of the term 'cleansing' is not descriptive enough for different issues in Europe. Also light on fintech. I liked the AT1 section the most.
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DRWhy would I invest a cent in Europe until the EU decides to dissolve or unite? It's not like there are any discounts to be found currently. Italy could implode if not dealt with properly. I patiently standby to see more development. Populism in Europe appears far from over. Europes debt is insanely overvalued.
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DSMr. del Missier may be smart enough, knowledgeable enough, experienced enough, and quick enough to find value in European banks. I am not. There is a large migration of black swans heading toward Europe and European banks. Normally a black swan event is unknown, but with a migration some swans will surely land. Love Europe but investing in European banks is way above my pay grade. DLS
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SSThe NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.....hey Real News Real Vision - let's get Carmen on RV ---->A-SAP<------.....no more cheerleaders. Cleanup mode apparently needs to be pushed! . ed-u-cate yourself here: https://nypost.com/2018/10/11/whistleblowers-new-book-shares-secret-tapes-of-new-goldman-ceo/ https://www.thisamericanlife.org/536/the-secret-recordings-of-carmen-segarra
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SSI'll just leave this interview from Dr. Mark Skidmore here.....$21 Trillion “Missing” Money Huge Implications for Dollar.....time to Wake Up??? https://www.youtube.com/watch?v=H4XRbcBz2Z4
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yBThat was an interesting topic, however I personally think he could have given more details about some investment ideas (Risk reward on AT1s for instance vs. equities with some specific names). He also could have explained a bit more why DB stock price is down 47% since the end of last year while the STOXX 600 Euro Banks is down 26%.. Even though European banks currently offers good value, it looks like leading economic indicators are showing a slowdown in the European economic activity.. With a low global liquidity (as Michael Howell presented in his latest video), a potential slowdown in economic activity and elevated uncertainty, how much premium do Euro banks really offer?
Chapters
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European Banks
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Are Banks Prisoners of Low Yields?
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What Will Drive Bank Earnings in this Environment?
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Will the ECB be able to Raise Rates?
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Is there a Tipping Point on Rate Hikes?
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Can Italian Banks Cope with Rising Rates?
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Deutsche Bank
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European Banks vs. American Banks
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The Next 5 Years
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What are AT1 Securities?
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Risks of Brexit
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Final Takeaway