Iskaral Pust

Because they probably felt the same. Everyone thinks they’re the main character surrounded by nuisance NPCs.

That’s the beautiful irony. It’s like when the board of a soccer club makes a statement that they have full confidence in their manager/coach: you know he’s a dead man walking unless there’s a miraculous improvement.

Deutsche Bank have received a dreaded public statement of confidence by Olaf Scholz. I have no non-public information about them or any weaknesses but after their many years of deeply shady practices, I’d be quite happy to see them disappear. But the European politicians won’t want to lose too much top-end global banking market share to the Americans, so I expect DB will be backed to the hilt.

Most of the anglosphere outside of the US have mortgages that are variable or else re-set very quickly. They’ve had a very easy run for the past decade or more but they’ll be suffering some hardship now. Places like Australia, NZ, Canada, Ireland and the southern half of England also had a significant run up in house prices, so any recent buyers are especially at risk once their first re-set arrives. We have a 7yr ARM with five years remaining at the initial fixed rate (unusually short in the US these days). I hope that’s long enough to see short rates decline again but even if it isn’t, my entire mortgage is only ~1.2x my current annual gross income. I’m not overextended unless my income declines a lot permanently. There is enormous uncertainty right now whether we’re in a (1) temporary cyclical phase of higher interest rates (driven by unusual overheating by excessive stimulation, both monetary and fiscal, during COVID) that will soon return to secular stagnation and low rates, or (2) a new secular era of higher inflation potential due to more labor bargaining power for wages, transition to green energy and re-shoring/friend-shoring that will keep interest rates higher than the past decade. My long term accounts are all still in stocks, but my discretionary accounts (which are just as large) are all in cash earning a very nice yield. I have in mind a valuation at which I’d move that cash into stocks, but we’re not close yet.

I doubt Liverpool have the financial capacity to outbid City or RM for Bellingham. But that was always the case, so I don’t understand why they deferred MF signings for two years to specifically target Bellingham.

Remember when Spurs had a hot run of form a year ago as Kulusevski balanced Kane and Son? That seems a very long time ago.

I forgot that. I was too quick to take a victory lap. They had a couple of great chances late on for that BP try but didn’t finish. I especially remember James Ryan knocking on when he tried to pop it up to Lowe right on the line.

I haven’t seen the game yet but it sounded like a harsh red from the description. I do hope Keenan is OK, though. Lots of players need to heal and recover before the WC. Despite a great 6N for Ireland, I would still favor the French over the Irish in the WC. Their ceiling looks higher and they can play multiple styles, whereas Ireland really just maximize their one style.

Grand slam! And a bonus point win in every game. Peaking several months before the WC once again.

“Usually” this amount of monetary tightening by central banks would be enough to cause a recession, although there is a lag to those effects. We’ve seen the slowdown already in the most interest rate-sensitive sectors, e.g. housing/construction and speculative start-ups, but it hasn’t percolated yet into the rest of the economy. The recent overheating of the economy wasn’t driven by a rapid expansion of credit (as in 2008 and “usually”), so it’s not quickly reversed by higher interest rates. Corporate and household balance sheets look mostly very healthy, albeit deteriorating recently for lower income quintiles, because of COVID-era effects (like lower spending for a while, fiscal transfers and govt PPP loans, plus refinancing mortgages at very low yields even as house prices rose) and very low unemployment, which is partly demographic due to Boomers retiring. So it’s not at all obvious how much monetary tightening is needed to cause a recession to slow inflation — and it’s very difficult to get the latter without the former now that inflation is embedded in wage growth and the services portion of core inflation. We may already be on a lagged path to an imminent recession or we may have more Fed tightening ahead. It’s very uncertain. This is why the markets keep overreacting to every little economic data print.

You should check out the regs involved. IIRC (and it’s been a long time) they were aimed at industry insiders fueling negative rumors, which all of the fragile banks claimed during 2008. So if you have concerns about a bank trading counterparty, you cannot say anything that would be construed as rumor-mongering but you can confirm whether that bank is still an accepted counterparty for your trading desk.

Silicon Valley Bank got into difficulties because they had a classic asset-liability mismatch, which triggered an old-fashioned run on the bank. Their deposit base grew rapidly as tech start-ups received lots of venture cap. They bought Treasury bond assets to back those deposits but, in a greedy reach for yield, they bought a large proportion of long-dated Treasury bonds for more yield. But then yields rose and inverted as the Fed finally fought inflation. Bank customers can now get a much higher yield in a money market fund so they started to withdraw deposits. To meet these withdrawals, SVB sold a bunch of long-dated bonds at a lower price (yields go up means price goes down), then disclosed this reduced value of assets (only because it was realized; otherwise the assets are held at book value), which got noticed and started rumors, which became a run on the bank. There are other small, regional US banks with similar fragility since Trump rolled back banking regulations on smaller banks that don’t represent a systemic risk. It’s not like Lehman Brothers with crazy leverage and risky credit; it’s just an asset-liability duration mismatch that destroys you if your overnight depositors actually withdraw their money, but not a problem at all if your depositors don’t all withdraw their money. SVB were complacent and deeply incompetent in simple risk management. This has nothing to do with Credit Suisse who have been a shit show for a long time and needed to raise more capital to offset losses, even after they already recently sold a chunk of their asset management business to Apollo. But some of their largest investors have recently sold their stakes (Harris Associates) or refused to invest more capital (Saudi National Bank). So Credit Suisse needs a lot of capital and no-one looks interested in providing it. A different type of rumor kicked off and there are reports of at least some banks (e.g. BNP Paribas was mentioned in the FT) are concerned about trading with them, so the Swiss central bank is stepping in. (BTW since Lehman it is illegal to fuel rumors irresponsibly about banks so people are circumspect about what they say and where) So SVB and Credit Suisse are quite different but banks fundamentally need credibility to function. That’s a design feature of fractional reserve lending. And credibility just took a hit for the entire industry. There is, however, also a real underlying problem for banks though, not just confidence of their customers: interest rates rose a lot and banks have not passed that through to their depositors. But depositors have a choice and can move a lot of their money into money market funds or similar to earn a better yield, without locking it up in an unsecured CD (certificate of deposit) at the bank. There have been enormous flows of money into money market funds this week. Now that savers can actually earn meaningful rates of interest, banks will have to compete for deposits and not just take them for granted.

@IheartIheartTesla even our most junior people have their target bonus represent at least 20% of their target comp, with actual bonus depending on both individual and company performance, and actual bonus can vary from 0 to 2x of target bonus in any given year. At my level, target bonus has to be at least 50% of target comp, and aside from my base+bonus I also have profit participation. This past year with strong individual performance by me and by the firm overall, my base pay turned out to be less than 30% of my total actual comp, while bonuses and other incentives were more than 70% of total. My comp has only grown each year at this firm but it could very easily swing downward for a year or two.

I turned down the CIO role at the spin-off venture. I think it’s the right call. The president is disappointed because he’s personally excited and very invested in this. I’ll help him part time but no more than that. My bonus this year was excellent but I’m banking most of it. I think our most senior people will be forced to restructure our comp deals for the next few years. I’m going to have even more of my comp tied up in future profits rather than cold, hard cash.

Sorry @Chataya de Fleury and @Mlle. Zabzie, both situations sound bad in their own way. Bonuses drop sharply at asset management firms when the portfolio is down. That’s part of the cycle and you just plan for it. But the extra personal animus that Chats has experienced lately makes it more than that. Watching the crypto implosions and now reckless* risk management at SVB and some other regional banks makes me think there will be some new S-Ox style regs ahead for financial risk controls. Just like post-Enron was a good job market for accountants overall even if AA imploded.