“Your enemies always get strong on what you leave behind.”
— Mario Puzo, The Godfather
It's fair to say the market had at least 5 days to identify the next limping gazelle. Yet, most have been caught flat footed. Unsurprisingly. There were plenty of hints and warnings along the way.
How do we know the $60bn FIMA borrower was Swiss? How much is the maximum lot each foreign central bank is allowed to borrow under the agreement?
According to the latest weekly money markets (MM) fund flows, deposits continued to leave the banking system this past week.
If we swapped our open source analysts with those in markets, finance and banking would be much safer. But, Al-Qaeda and ISIS would be fighting over control of Muswell Hill, London.
Counterparty hedging with Credit Default Swaps (CDS) certainly doesn't help the optics of the situation, however, that's never the root cause of concerns. If some people take comfort wearing a helmet when skydiving 10K feet out of a plane, then so be it. The Deutsche Bank (DB) stock may be buoyed back up if some dead weight at the top fell off, but it's probably too late.
DB has been another quasi-decade long story, and most of the general public is (frankly) fed up with it. We're in the hands of the regulatory gods now.
We'll continue welcoming their top clients here as fast as they're haemorrhaging deposits.
Welcome new friends!