Italy Wags Finger at Germany Over Deutsche’s
Woes - (www.wsj.com) When
shares in Deutsche Bank AG, Germany’s largest lender, tanked last
month, sparking rumors of a state-funded bailout, Italian politicians couldn’t
help indulging in a bit of schadenfreude. Scolded by Berlin for years for his
apparent failure to sort out Italy’s endemic bank problems, Premier Matteo
Renzi showed evident pleasure in wagging the finger back at Germany. “I am
sure German authorities will do everything needed to prevent Deutsche Bank’s
crisis from worsening,” he told Italian state television late last month. “We
have always said that as far as the issue of credit is concerned, Europe has to
do everything needed to fix the situation of banks and that the main concern
comes from German banks.”
Reek
of Desperation Surrounds EU Banks, Regulators Prepare for “Derivatives Clearing
Crisis” - (www.wolfstreet.com) The
past week’s events in Europe were dominated by the pound sterling’s spectacular
flash crash to its lowest point in 31 years. As is often the case with flash
crashes, we will probably never know what exactly triggered the currency to
free-fall by 6% during Asian trading hours, though the most cited cause, apart
from a “fat finger,” is the gathering realization that a so-called “hard” Brexit
is a very real possibility. But it’s an eventuality that can be expected to
play out in roughly two and a half years’ time, at the earliest, and in light
of the powerful forces arrayed against it, it may never occur at all. In the
meantime, something far more dangerous is happening on the other side of the
English Channel: the slow-motion meltdown of the Eurozone’s banking system.
This Was the Week the World Got Really Anxious
About Globalization's Future - (www.bloomberg.com) Weak
global trade, fears that the U.K. is marching towards a hard Brexit,
and polls indicating that the U.S. election remains a tighter call than
markets are pricing in have
led a bevy of analysts to redouble their warnings that a backlash over
globalization is poised to roil global financial markets—with profound
consequences for the real economy and investment strategies. From the
economists and politicians at the annual IMF meeting in
Washington to strategists on Wall Street trying to advise clients, everyone
seems to be pondering a future in which cooperation and global trade may look
much different than they do now.
Illusion of Liquidity Burns Traders Blindsided
by Pound’s Crash – (www.bloomberg.com) The
inexplicable volatility that roiled the British pound last week came as no
surprise to Bank of America Corp., which just days earlier warned that
liquidity in the $5.1 trillion-per-day global currency market was far worse
than anyone imagined. Sterling sank 6.1 percent in a span of minutes in early
Asian trading Oct. 7, following at least three other bouts of puzzling
foreign-exchange turbulence in
the past two years. The latest episode involved the fourth-most-traded
currency, serving up a stark reminder of the pitfalls that investors face in
the world’s biggest financial market as banks -- the traditional middlemen --
step back amid post-crisis regulations.
Carl
Icahn Shuts Trump Taj Mahal After 26 Years Of Operation; 3,000 Union Workers
Lose Their Jobs – (www.zerohedge.com) The
Trump Taj Mahal, which Donald Trump opened 26 years ago calling it "the
eighth wonder of the world", officially closed today. To be sure, the now
defunct structure had no trace of ownership to Trump, and instead was until
yesterday owned by Trump's friend and fellow billionaire Carl Icahn, who closed
the casino on Monday morning, making it the fifth casualty of Atlantic City's
casino crisis. Nearly 3,000 workers lost their jobs, bringing the total jobs
lost by Atlantic City casino closings to 11,000 since 2014.
Pound’s Dramatic Week Leaves Traders Skeptical of Quick Recovery - (www.bloomberg.com)
Kuroda Says Can Lower Short, Long-Term Bond Rates If Necessary - (www.bloomberg.com)
Shanghai Adopts Measures to Curb Rocketing Property Prices - (www.bloomberg.com)
US Turns Up Heat on Russia as Ties Deteriorate - (www.ap.com)
IMF, global finance leaders fret over populist backlash - (www.reuters.com)
Two big hedge funds unwind bets against Deutsche in sign of confidence - (www.reuters.com)
Deutsche Bank as Next Lehman Brothers: Far-Fetched but Not Unthinkable - (www.nytimes.com)
Corporate-Bond Issuance in Emerging Markets Jumps - (www.wsj.com)
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