“Is it possible for a bank to continue operating while being insolvent? The answer is yes, and Norinchukin Bank is the best example of it at the moment”. This was how I started my last article on Norinchukin Bank 3 months ago. This is why yesterday I wasn’t surprised at…
Category:Banks
WHY THE SITUATION OF UBS IS VERY DANGEROUS
A notification pops up on my phone about UBS’s latest earnings results and how cheerfully the market reacted, sending the stock up ~3% at the opening. As I always do, I go to the company’s investor relations website, download the latest report, and start reading. It didn’t take me long…
CORPORATE BANKRUPTCIES VS BANKS EXPECTED CREDIT LOSSES: TWO PARALLEL WORLDS
The Q4-2024 banks earnings season officially started with JP Morgan, Wells Fargo, Goldman Sachs, BNY Mellon, and Citigroup kicking off the “beat expectations” parade: Between one “Kumbaya!” and a “High Five!”, one small detail across all these earnings reports clashes significantly with reality: provisions for expected credit losses. Before diving…
STATE FARM KNEW A LOS ANGELES (FINANCIAL) CATASTROPHE WAS ONLY A MATTER OF TIME
Insurance isn’t really an area that I had much interest in, mostly because in the countries where I’ve lived, it has generally been a well-run and stable business. However, the recent Los Angeles wildfires prompted me to look into this sector in California more closely, and what I discovered is…
THE CENTRAL BANK “KING” IS MORE AND MORE “NAKED”
“Why are central banks cutting rates while yields are going up? How is this possible?” This is the question many people are asking themselves at the moment. Surprisingly, those experiencing the highest degree of confusion and bewilderment appear to be institutional investors rather than retail investors. The reason is that…
WHY SOUTH KOREA IS OFFERING A PREVIEW OF GERMANY’S ECONOMIC IMPLOSION
Despite being geographically very distant from each other, South Korea and Germany are, in reality, more similar economically speaking than everyone thinks. Both countries appear “very safe” considering the very low public debt-to-GDP ratio they both showcase: 46% for South Korea and 62% for Germany. What if we add private…
HOW A FIAT CURRENCY SYSTEM DIES OF A THOUSAND CUTS
The result of the US elections should have rung warning bells everywhere in the world, but apparently, it didn’t. Europe, Canada, Japan, South Korea – the list of economies that persist in feeding asset bubbles is long. The US is still part of it, considering the market is forcing (sorry,…
MARKETS ARE QUIET – TOO QUIET
This is supposed to be a “quiet” week ahead of US Thanksgiving that ushers in the last month of the year when no money manager is willing to spoil their performance and put their year-end bonus in danger by trying to make changes in asset allocation. The VIX term structure…
WHY A HEALTHY ECONOMY IS BAD FOR BANKS AND SHADOW BANKS BUSINESSES
Imagine a world where people only spend what they earn or where companies borrow to build new factories and use the additional revenues generated to repay the debt. Imagine a world where you have to plan and save enough money in advance to make an expensive purchase or where governments…
HOW LONG WILL THE MARKET IGNORE NORINCHUKIN BANK INSOLVENCY?
Is it possible for a bank to continue operating while being insolvent? The answer is yes, and Norinchukin Bank is the best example of it at the moment. I started to follow Norinchukin closely a long time ago (article) and the reason why I continue is because this little-known bank…