Monthly Archives: July 2013

UBS to repay Swiss government bailout loan

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“The move draws a line under the Swiss government’s rescue of UBS nearly five years ago.  At the time the country’s biggest bank faced collapse over more than $50 billion in losses on mortgage securities.  The central bank’s fund was set up to bail out UBS at the height of the financial crisis.  The government took a nine percent stake in UBS as part of the bailout comprising six billion francs of equity and a loan from the Swiss National Bank (SNB).  UBS spun off $38.7 billion of risky assets into the fund.  UBS last week announced its quarterly profit would exceed analysts’ expectations, even after paying $885 million to settle a lawsuit in the United States.”

http://www.thelocal.ch/20130730/ubs-to-repay-government-bailout-loan

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Deutsche Bank to Cut Assets $332 Billion as Profit Slides

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“Deutsche Bank AG (DBK), continental Europe’s biggest bank, said it will shrink its balance sheet by 250 billion euros ($332 billion), joining Barclays Plc (BARC) and UBS AG (UBSN) in seeking to comply with stricter capital rules. Deutsche Bank will reduce leverage by changing the way it accounts for derivatives and by winding down a 73 billion-euro portfolio of assets. Co-Chief Executive Officer Anshu Jain has been offloading riskier assets, firing staff and raising capital by selling shares as lingering doubts about the ability of Europe’s banks to withstand another financial crisis prompted regulators and shareholders to demand stronger finances.”

http://www.bloomberg.com/news/2013-07-30/deutsche-bank-profit-unexpectedly-falls-on-legal-reserves.html

Deutsche Bank to Cut Assets $332 Billion as Profit Slides

By Nicholas Comfort – Jul 30, 2013 9:45 AM CT

Deutsche Bank AG (DBK), continental Europe’s biggest bank, said it will shrink its balance sheet by 250 billion euros ($332 billion), joining Barclays Plc (BARC) and UBS AG (UBSN) in seeking to comply with stricter capital rules.

Deutsche Bank will reduce leverage by changing the way it accounts for derivatives and by winding down a 73 billion-euro portfolio of assets, Chief Financial Officer Stefan Krause told investors on a conference call today. Krause announced the plan after the bank said net income slid 49 percent to 334 million euros, missing the average 767.6 million-euro estimate of nine analysts.

Signs for Deutsche Bank AG, continental Europe’s biggest bank, are seen illuminated on the exterior of the bank in Berlin. Photographer: Krisztian Bocsi/Bloomberg

Deutsche Bank Costs Higher Than Hoped, Dichtl Says

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July 30 (Bloomberg) — Otto Dichtl, managing director at Stifel Nicolaus Europe Ltd., talks about Deutsche Bank AG and UBS AG’s second-quarter profit. He speaks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

By the end of last year, Anshu Jain, co-chief executive officer of Deutsche Bank AG, and his board completed the majority of almost 2,000 job cuts, including more than 800 at the investment-banking unit. Photographer: Munshi Ahmed/Bloomberg

Signs for Deutsche Bank AG, continental Europe’s biggest bank, are seen illuminated on the exterior of the bank in Berlin. Photographer: Krisztian Bocsi/Bloomberg

Co-Chief Executive Officer Anshu Jain has been offloading riskier assets, firing staff and raising capital by selling shares as lingering doubts about the ability of Europe’s banks to withstand another financial crisis prompted regulators and shareholders to demand stronger finances.

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On the Ground in Cyprus with Doug Casey

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“Cyprus is perhaps the best most-recent example of the actions that a desperate government can take—and why you need to internationalize your savings, yourself, your income, and your digital presence. As you are no doubt aware, earlier this year on a seemingly ordinary Saturday morning (when most people would least suspect it), the government of Cyprus swiftly closed the banks, imposed capital controls, and announced a confiscation of customer deposits. While these actions came as a surprise to many, it should not have. The actions of a desperate government usually follow a predictable pattern and can happen in any country.”

https://www.internationalman.com/78-global-perspectives/981-on-the-ground-in-cyprus-with-doug-casey

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Large Depositors in Cyprus Lose 47.5% of Their Deposits. Good!

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“If the principle of ‘depositor beware’ were allowed to spread across the world and down to every dollar or euro deposited, the world would then have something resembling a free market in banking. Every banker would know that a bank run on his bank could wipe it out at any time. Bankers would become far more careful with depositors’ money. Banking would become less inflationary. The world would be better off. The bankers in the rest of Europe are terrified that the ‘Cyprus solution’ will spread to their nations. That would place final authority in the hands of depositors. This thought terrifies bankers.”

http://teapartyeconomist.com/2013/07/31/large-depositors-in-cyprus-lose-47-5-of-their-deposits-good/

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6% Treasury yields? May come sooner than you think

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“The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.  ‘It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,’ said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday. Under this scenario, he sees the yield on the 10-year rising to 3.5-4 percent in a ‘very short period of time.'”

http://www.cnbc.com/id/100926417

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Obama’s Auto Industry Bailouts in 2009: Taxpayers Lose, Big Time

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“Despite surges in revenue and a catalog of new vehicles produced by the U.S. auto industry, taxpayers are still suffering from the 2009 bailouts, as General Motors (GM) would have to peddle their stock for $95.51 per share for taxpayers to break even, according to a government watchdog report published Wednesday. Even with a 25-percent spike in the price this year, that’s still well over twice what shares are selling for today, with the price currently lingering around $37 per share — meaning there’s little faith that taxpayers will break even on the nearly $50-billion GM bailout.”

http://thenewamerican.com/economy/sectors/item/16106-taxpayers-economic-outlook-to-lose-big-on-the-auto-bailouts

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The “I Thought Bonds Were Safe” Fallacy…

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“Now remember, Bernanke didn’t change rates, he just implied that rates may increase in the future. The market, however, took that rhetoric and ran. Accordingly, the bond market fell. For instance, from its high around May 1st the 30-year treasury market has fallen some 9%. Nine….freaking….percent. That’s a huge move for a seemingly steady and professional market like bonds. It’s also a devastating move to risk-averse bond investors (like my dad.) All said, safety seekers got burned. And you can thank the ‘Ber-nank.'”

http://dailyresourcehunter.com/the-i-thought-bonds-were-safe-fallacy/

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5,000 Chinese factory workers strike over Indian takeover of American firm

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“Cooper Tire and Rubber announced last month that it would be taken over by Apollo Tyres of India, making the combined group the seventh-largest such firm in the world. But thousands of staff at Cooper Chengshan, a joint venture in the eastern Chinese province of Shandong, have walked out in protest, the Xinhua news agency said late Tuesday.  It is the latest incident to hit a foreign joint venture after Chinese workers held an American factory executive hostage for nearly a week in late June over a plan by his US-based medical supply company to lay off 30 workers.”

http://www.rawstory.com/rs/2013/07/31/5000-chinese-factory-workers-strike-over-indian-takeover-of-american-firm/

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Copper theft ‘like an epidemic’ sweeping US

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“An electrical power station in Wichita, Kan., or half a dozen middle-class homes in Morris Township, N.J. Even on a Utah highway construction site, crooks managed to abscond with six miles of copper wire. Those are just a handful of recent targets across the U.S. in the $1 billion business of copper theft.  The five leading states for the thefts are Ohio, Texas, Georgia, California and Illinois, the NICB said.  The FBI says copper theft is ‘threatening U.S. critical infrastructure by targeting electrical substations, cellular towers, telephone land lines, railroads, water wells, construction sites, and vacant homes for lucrative profits.'”

http://finance.yahoo.com/news/copper-theft-epidemic-sweeping-us-100000314.html

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Countering rupee devaluation: Pakistani govt slaps temporary ban on gold imports

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“In an attempt to address steep devaluation of the rupee against the dollar, Pakistan on Tuesday temporarily banned import of gold to save the precious foreign currency reserves. The Economic Coordination Committee of the Cabinet, headed by Finance Minister Ishaq Dar, took the decision to ban the import of the yellow metal for one month with immediate effect. After the Indian government’s decision to discourage gold import by imposing 8% duties, the buyers had shifted to Pakistan where the commodity was allowed to be imported duty free since 2001.”

http://tribune.com.pk/story/584352/countering-devaluation-govt-slaps-temporary-ban-on-gold-import/

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