Weirdly mixed messages from the economy this morning.
In the US Larry Sumner is leaving the White House. Let’s call that good news. Better still if Krugman took his place.
The Fed is planning more QE. That’s also good news. We’re all going to need the US to do it.
Ireland got a bond issue away, successfully. That’s good. As was the fall in Irish bond yields. But the hawks who worship at the altar of the mythical and vengeful God of bond retribution weren’t sure: “analysts warned that the country still faced the risk of a Greek-style bail-out unless it could boost its economy”. Of course they did. But they get all their reasoning wrong even if reform is needed.
But perhaps most tellingly, the FT notes that Deutsche Bank “has revealed a big downturn in trading and has warned of an expected quarterly net loss following. Germany’s largest bank said on Tuesday that its biggest and most profitable investment banking operations had suffered a marked downturn in July and August and would report third-quarter profits “substantially below the level” of last year. Last year Deutsche made net income of €1.4bn in the third quarter. The warning from Deutsche, one of the leading global banks in the trading of fixed-income products and foreign exchange, provides further evidence of a downturn in the sector.”
Now that is interesting. Surely the party’s not over for traders? Or is it? And if so, why?