When I was a child in the 1960s, I remember reading an illustrated article about what the world would be like in 50 years – approximately where we are right now, in fact. It looked pretty exciting.
“History does not repeat itself, but it often rhymes” Mark Twain
Despite the obvious differences in cause, the current virus-triggered economic meltdown and the Great Financial Crisis of 2007-2008 have some peculiar parallels.
It’s been a few months since I posted to this blog site; the long gap has had various causes, some of which are interesting (to me) others rather tedious. But a couple of news items in the last week or so have prompted me to come back.
It appears that Deutsche is shutting Equities and 18,000 people will lose their jobs. But one job seems safe – the Chairman’s. Continue reading “DB’s last safe job”
48 days later: let’s call the whole thing off…
A few weeks after the much touted – and long anticipated – merger talks between Deutsche Bank and Commerzbank started, they have come to a sudden grinding halt.
British politics is changing: there’s Nigel Farage’s new Brexit party; there’s The Independent Group. But will these nascent parties succeed?
In this long read blog piece, to attempt an answer, I use a key theory from organisational microeconomics which helps explain both the existence and success of political parties.
Short answer? In the long term the new parties are probably doomed.
An examination of the trends in market share for two of the bank’s previously most dominant business lines (FX and the German derivative securities unit) suggests how tricky it will be for Deutsche to perform the balancing act it requires in order to recover.
A couple of
weeks years ago I gave a talk about my book “Why Aren’t They Shouting?” in front of a group of Belgian businessman at the Belgian embassy. The talk had a mixed reception. One gentleman, who worked at a hedge fund specialising in foreign exchange, took exception to my claim that automation has made the FX market more fragile.
Well I hope that, last night, he did not have any
GBP/USD USD/JPY positions stopped out near the lows. If he did I’m sure that now he would be more willing to agree with me.
Just over twenty years ago, Deutsche Bank bought my old employer Bankers Trust for $10 billion; now DB looks like it may well merge with Commerzbank.
My experience of the first deal makes me fear mightily for the success of the second.
On the tenth anniversary of Lehman, it’s worth asking: could it really have been avoided?
Mark Johnson is out of prison, at least for the time being. It’s a small, significant step in the right direction. But it’s just a step.
There is more work to be done.
Continue reading “Thing with feathers: Mark Johnson’s bail pending appeal”
[A version of this article originally appeared in Euromoney. It is reproduced here with the permission of the Editor]
Mark Johnson, the HSBC FX trader found guilty of wire fraud last October and sentenced to two years in jail this April, is appealing his conviction.
You should care about the outcome.
A number of news items and events this week have made me think about the world of investment banking again after a few relaxing weeks off for good behaviour.
They have not been happy thoughts.
From rumour, to leak, to background briefing, to common knowledge, to ‘absolute commitment’, to emergency weekend meetings; and from there to a summary firing and replacement – all in less than two weeks.
Cryan’s gone as CEO, Sewing is in, and a whole bunch of new problems are just starting for my old shop Deutsche Bank.
Continue reading “Unpicking the Sewing at Deutsche”
“How is it going?” I asked an old friend from the markets over lunch recently. “You know, Curtains and Tigers,” he replied, cryptically.
I knew what he meant.