Federal Reserve Press Release 19 Jun 2019 (pdf): "Consistent with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. In support of these goals, the Committee [FOMC] decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent."
Below are press conference exhibits: 1. unemployment rate; 2. change in real GDP.
Federal Open Market Committee (FOMC) meeting Jun 18-19, with Fed Chair Jerome Powell news conference set for Wednesday, June 19 at 2:30 p.m. EDT. S&P expects the Fed to signal at its June policy meeting that it intends to begin cutting rates. Federal funds futures trading had been pricing in two rate cuts before the end of the year, but only a 23% probability of a cut at this June meeting. Donald Trump and Larry Summers agree that rates are too high, inflation too low, yet the Fed is still facing the results of keeping interest rates too low for too long (Ben Bernanke and Janet Yellen's QE and ZIRP) the effects of which continue throughout the economy. Background: see previous FOMC press conferences (video) and federalreserve.gov and @federalreserve.
Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.
Transcript of ECB President Mario Draghi, Jun 18, 2019 (pdf), video below: "... in the absence of improvement such that the (31:26) sustained return of inflation to our aim is threatened, additional stimulus will be required."
Above video published June 18, 2019 by the ECB: Introductory speech Mario Draghi, President, European Central Bank, ECB Forum on Central Banking 2019--20 Years of European Economic and Monetary Union--Sintra, Portugal, 17-19 June 2019. The European banking system lags far behind its global peers in terms of profitability and valuation (Almost Daily Grant’s, May 28). Bloomberg reports Deutsche Bank A.G. (whose shares have fallen 84% in the last nine years to less than 21% of its year-end 2018 book value) is set for another round of layoffs.
Meanwhile, Facebook just announced it will disrupt the global central banking system using a "New Digital Wallet [Calibra, domain:calibra.com] for a New Digital Currency [Libra, domain: libra.org,]" based on blockchain technology:
Today we’re sharing plans for Calibra, a newly formed Facebook[NASDAQ: FB] subsidiary whose goal is to provide financial services that will let people access and participate in the Libra network. The first product Calibra will introduce is a digital wallet for Libra, a new global currency powered by blockchain technology. The wallet will be available in Messenger, WhatsApp and as a standalone app — and we expect to launch in 2020 ....
For many people around the world, even basic financial services are still out of reach: almost half of the adults in the world don’t have an active bank account and those numbers are worse in developing countries and even worse for women. The cost of that exclusion is high — approximately 70% of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees. This is the challenge we’re hoping to address with Calibra, a new digital wallet that you’ll be able to use to save, send and spend Libra. From the beginning, Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost.
How JP Morgan Chase Became The Largest Bank In The US
From the railroad and steel consolidations brokered by John Pierpont Morgan on Wall Street more than a century ago, to banking consolidation, the financial crisis and Jamie Dimon's leadership, J.P. Morgan Chase has been at the center of finance for more than a century. Here's the story of how the country's largest bank got to where it is today.
Biographer of J.P. Morgan, Jean Strouse, longtime bank analyst Mike Mayo, and CNBC banking reporter Hugh Son, help tell the story, and explain how Aaron Burr and Alexander Hamilton are part of the bank’s history, along with the first ATM, and the company’s position moving forward into the future of digital banking. See how the largest bank in the U.S. got to where it is today.
In February, J.P. Morgan Chase announced it was in growth mode, expanding its branch network to cover 93 percent of the U.S. population by the end of 2022. The aggressive growth plans will allow it to reach 80 million more consumers, or about one-quarter of the U.S. population, versus its footprint in 2018. The expansion of physical branches comes amid a consumer shift to mobile and online banking.
The average number of teller transactions per customer has plunged 41 percent since 2014, according to J.P. Morgan's presentation at its investor day meeting, but convenient branch locations are a key consideration for people thinking about switching banks, and most of the firm's growth in deposits has been fueled by people who use branches frequently, the bank says. The company also made it clear it had flexibility in its growth plans: more than 75 percent of its branches could be shuttered within five years or kept open for more than a decade. CNBC video above published Mar 7, 2019.
Deutsche Bank and Commerzbank are the largest banks in Germany. Seeing as size and strength are crucial in international banking, the two banks in talks now to join forces to become one large financial entity. The goal is to keep up with international competition. The German government also supports the move. DW News video above published Mar 18, 2019.
Nobody likes Deutsche-Commerzbank deal: head of German investment body
Stefan Mueller, CEO and founder of the German Institute for Asset Allocation, discusses the pitfalls of a Deutsche Bank-Commerzbank merger. CNBC International TV video above published Mar 18, 2019.
We are reviewing strategic options to improve the growth profile and profitability of the bank. There is no certainty that any transaction with Commerzbank will occur. https://t.co/Byc7RuwJXUpic.twitter.com/dBQ1hv95Jp
Tech Review (TR 2019-03-02)--Domain Mondo's weekly review of tech investing news: Features • 1)Bank of the Future, 2)How China Created Its Own Internet, 3)Investing: The Week & Investor Notes:China,4)ICYMI Tech News:Google, Amazon, Nokia, 5G, Ericsson, AT&T, Tesla, Click-and-Collect, Wirecard, Oracle v. Google, Berkshire Hathaway, Gundlach on Facebook $FB.
1)Bank of the Future
As emerging digital finance platforms launch new and differentiated products, including bespoke, consumer-centric solutions and experiences, they are building scale more efficiently and quickly than ever before, according to Brandon Watkins of the Goldman Sachs Investment Banking Division. In the video above, Watkins explains how the “bank of the future” is being shaped by three trends – a shift from offline to online banking, growing consumer trust for digital-first platforms and consumers’ desire for personalization and tailored product experiences. “You’re seeing these new digital finance platforms… starting to compete with some of the biggest traditional banks in the world,” he says, while some of the traditional financial institutions are turning to “technology platforms to add to the product capabilities and experiences that they’re delivering to their customers today.” Goldman Sachs video above published Feb 20, 2019.
2) How China Created Its Own Internet
From a single email sent to West Germany to restrictions on Winnie the Pooh and the letter N, this is how the Internet took hold in China.
Bloomberg.com video above published Feb 19, 2019.
Even After Sanders, Harris, and Others Enter Race,Bookies Have Donald Trump as Massive 2020 Favorite--mediaite.com.
Longview:
Investor Notes:
China: Anne Stevenson-Yang, co-founder of J Capital Research, reportedly wrote in a Feb. 18 commentary, that Beijing’s recent exertions have helped banks, but reflation efforts seen in January are insufficient to stem the broad deterioration in financial conditions. China’s economy will likely continue in decline until corporate and financial defaults force the authorities to launch a gigantic stimulus.
A Chinese real estate developer in Shanghai, boarded a flight to Malta last month with no plans to return anytime soon. After landing, Mr. Chen, a former judge and lawyer, shared on social media a 28-page article explaining himself. “Why I Left China,” read the headline, “An Entrepreneur’s Farewell Admonition.” “China’s economy is like a giant ship heading to the precipice,” Mr. Chen wrote. “Without fundamental changes, it’s inevitable that the ship will be wrecked and the passengers will die.” “My friends,” he urged, “if you can leave, please make arrangements as early as possible.”--NYTimes.com.
Imports by China and other emerging Asian economies in December plunged to the lowest level in two years, in the steepest one-month plunge since 2008--wolfstreet.com.
4)ICYMI Tech News:
Shaping the future of mobile with Android--Google says Android One activations grew 250% YoY, 50%+ of new entry-level Android devices are Android Go, and Digital Wellbeing tools are coming to more phones. See also: Helping more families set digital ground rules with Family Link--blog.google.
Nokia CEO warns 5G implementation 'will be delayed in Europe'--CNBC video. AndNokia says 5G would not be delayed by ban on Chinese suppliers--reuters.com.
5G:Ericsson$ERIC buys antenna and filters business of Germany's Kathrein--reuters.com.
AT&T the Next Kraft Heinz?--SeekingAlpha.com: highest debt load in corporate America, poor earnings growth and has paid over $120 billion for acquisitions in recent years. Tesla $TSLA moment of truth will arrive in 2020: "Volkswagen’s electric-car onslaught and an economic recession will put Elon Musk’s company to the test"--marketwatch.com Op-ed Feb 22--Until then, Elon Musk has plenty to deal with: SEC problems again; and Consumer Reports recently stopped recommending the Model 3 because of reliability issues.
Click-and-Collect: sales where customers order goods online and pick them up at a nearby store rose 47% in November and December compared with a year earlier, far more than the 16.5% growth in online sales, according to Adobe Analytics.
Germany’s regulator banned short-selling in Wirecard--share price slid after allegations of false accounting surfaced--economist.com.
Amicus Brief (pdf): EFF Asks the Supreme Court to Clean Up the Oracle v. Google Mess--eff.org.
Do you still have an opinion on Facebook?" ... I just think that Facebook-- their big problem is obviously their business model. And I talked about things that are safe ended up being unsafe. I think that's Facebook I mean, they sold themselves as comfortable and safe, but they're really just a diabolical data collection monster. And they're unrepentant. And I just saw yesterday they were talking about more regulation in Europe in the UK. And when the regulators show up, usually, the stock prices go down. Health care had a meteoric rise until the regulators showed up a few years ago, and then a big decline. So I don't really trust Facebook. So the fact that I don't trust them makes me not like them, and the fact they don't like them makes me want their stock to go down."--Jeffrey Gundlach extended conversation with Yahoo Finance [Transcript] (pdf).
Leonard Seelig, managing director of BABB, which provides peer-to-peer banking services, talks about how a decentralised banking system can be built and the benefits of being a part of the Level 39 community in London. TheBanker.com video above first published Sep 10, 2018.
Robinhoodis an investing app valued at over $5 billion, that says it's trying to "democratize America's financial system" by making investing accessible to the little guy with free trades--Invest for Free--"Invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from your phone or desktop." It's an eye-popping valuation for a financial company with opaque metrics and plenty of competition. The young company had its share of missteps as well, prompting questions of whether or not it can handle primetime.
Robinhood has faced criticism for business practices that allow it to offer free trading. It also botched the rollout of a checking and savings account feature in late 2018, garnering concern from regulators.
But the company's incredible growth and popularity with younger investors – more than 6 million users by the end of 2018 – means it could be a major player in banking moving forward. CNBC video above published Jan 16, 2019.
Reuters.com's Peter Thal Larsen talks to Adam Tooze, Columbia University history professor, who joins the dots from the 2008 crash to Brexit and U.S. elections. Podcast release date: 4 September 2018.
Twitter profile: History, economics, politics, theory. Professor, Columbia University. Director of the European Institute. Born UK, raised FRG (Germany).
SWIFT Business Forum New York 2018, will bring together 600+ senior business leaders and industry experts to discuss the latest developments and innovations shaping the financial industry and to debate issues of mutual interest or concern, on Wednesday, 12 September at Chelsea Piers. This year’s theme: Seizing the Opportunity.
View from Swift Business Forum New York 2018
TheBanker.com video above published Aug 28, 2018: Brian Caplen, editor of The Banker, and Joy Macknight, deputy editor, discuss the hot topics on the New York agenda, including developments in real-time and cross-border payments, cyber security and technology such as blockchain, AI and APIs.
The Bank for International Settlements (BIS) (domain: BIS.org) video above published Jun 17, 2018: Hyun Song Shin speaks about Chapter V of the Annual Economic Report 2018 (full embed below). Cryptocurrencies' decentralized model of generating trust limits their potential to replace conventional money, the chapter argues.
Abstract: "Cryptocurrencies promise to replace trusted institutions with distributed ledger technology. Yet, looking beyond the hype, it is hard to identify a specific economic problem which they currently solve. Transactions are slow and costly, prone to congestion, and cannot scale with demand. The decentralized consensus behind the technology is also fragile and consumes vast amounts of energy. Still, distributed ledger technology could have promise in other applications. Policy responses need to prevent abuses while allowing further experimentation."
The Bank for International Settlements, founded May 17, 1930, is an international financial institution owned by 60 of the world's central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks." The BIS provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.
Watch a Cryptocurrency ICO Launch From a New York Loft
Bloomberg.com video above published Jan 29, 2018: Airswap, a peer-to-peer cryptocurrency exchange, has been building a global community around the idea of eliminating the middlemen in banking. Bloomberg was given exclusive access to Airswap's initial coin offering, or ICO, at its Brooklyn offices. Video by Matt Goldman Co-produced by Raymond Schillinger
Tech Review (TR 2017-11-11)--Domain Mondo's weekly review of tech news with commentary, analysis and opinion: Features • 1) Alibaba $BABA Singles Day Brings in $25 Billion (video), 2) Your Next Bank: Amazon, Apple, Facebook, or Google? 3) Investing, 4) ICYMI Tech News.
Some U.S. banks oppose tech sector offering banking services--Reuters.com.
3) Investing
a. The Week--Possible tax reform delay in D.C. initiated a pause in the Trump Rally on Wall Street--for the week, the Dow fell 0.5% while the S&P 500 index and NASDAQ each lost 0.2%. The Dow and S&P 500 had risen for eight straight weeks, and the NASDAQ for six straight weeks. All three indexes are still hovering near record levels.
InvestorPlace.com: Why Investors Should Stay Cautious on Alibaba Group Holding Ltd $BABA: "Alibaba still is the largest capitalist business in what remains a controlled, nominally Communist economy ... Meanwhile, competition is on the way. Second-place JD.Com Inc (ADR) (NASDAQ:JD) steadily is taking market share ... Amazon reportedly has ceded the Chinese market to Alibaba, but it also will stand in the way of any expansion beyond China ..."
China widens foreign access to its giant financial sector: The move was announced Friday by vice finance minister Zhu Guangyao, a day after U.S. President Donald Trump reiterated calls for better access to Chinese markets in meetings this week with Chinese President Xi Jinping--Reuters.com.
Housing "Investment" & Tax Reform: "Many Americans think that a home is a good investment, but the numbers don’t support it."--Bloomberg.com.
Why an ailing eurozone still requires extreme treatment | FT.com: "... These extreme [ECB] policies are needed because the eurozone economy is in such bad shape. It is getting better for sure, but we are looking at a decade-long recovery. It is thus meaningless to compare the relatively high current growth rates in the eurozone to that of the UK or the US. Neither experienced an economic shock on the scale of the eurozone’s ... There is another, unspoken reason, why the ECB continues to buy assets — if it were to stop, the eurozone crisis might return ... the ECB may never be able to stop them."See also Financial Storm Clouds Gather Over Italy | WolfStreet.com.
Don't Forget Dick Fuld's Record at Lehman | Bloomberg.com: "It was a giant accounting shell game. Lehman was actually insolvent long before it declared bankruptcy. It is quite astonishing that no one from Lehman faced any consequences for this egregious accounting impropriety."
Apple: A planned $1 billion Apple data center in Ireland is in doubt after Irish Prime Minister Leo Varadkar said Apple CEO Tim Cook "would no longer commit to it"--Reuters.com.
Amazon seeks staff in European insurance push--Reuters.com
Google Chrome security feature will soon prevent malicious auto-redirects--9to5Google.com.
EU's Vestager seeking details on Apple's recent tax set-up--Reuters.com.
Reuters.com: Former Yahoo CEO Marissa Mayer apologizes for data breaches, blames Russians [Editor's note: that's an excuse that ALWAYS works in D.C. these days].
The Transformation of Finance, Davos 2016 WEF Video: What trends and uncertainties are shaping the future of financial services? Transformations to be addressed:
Digitization and new business models
Regulatory requirements and new client needs
Data privacy and systemic connectedness
Speakers:
Dan Schulman - President and CEO of PayPal and Chairman of Symantec
Gillian R. Tett - author and journalist at the Financial Times
John Cryan - businessman and co-chief executive of Deutsche Bank AG in Frankfurt am Main
James P. Gorman - Chairman and Chief Executive Officer of Morgan Stanley
Tom de Swaan - Chairman, Interim Chief Executive Officer, Zurich Insurance Group AG
Christine Lagarde - Managing Director of the International Monetary Fund (IMF)
The parallels between the financial industry and the domain name industry are interesting--take note particularly (begins @37:00) the public role of banks and financial institutions as regulated utilities, with duties to act as extensions of law enforcement, required to collect and analyze data, report "suspicious" patterns and transactions, even closing customer accounts, etc.--if you want an insight into the future of the domain name industry and internet governance, watch this video.
Notes: What is the future of finance? What are the trends and uncertainties that are disrupting financial services, and how should we react? Panel member Christine Lagarde addressed this topic on the WEF website, Agenda. The Managing Director of the International Monetary Fund (IMF) looked ahead to what 2016 might hold for the global economy. She wrote:
“One reason that the global economy is so sluggish is that, seven years after the collapse of Lehman Brothers, financial stability is not yet assured. Financial-sector weaknesses linger in many countries – and financial risks are growing in emerging markets.”
“Putting all of this together, global growth in 2016 will be disappointing and uneven. The global economy’s medium-term growth prospects have weakened as well, because potential growth is being held back by low productivity, aging populations, and the legacies of the global financial crisis. High debt, low investment, and weak banks continue to burden some advanced economies, especially in Europe; and many emerging economies continue to face adjustments after their post-crisis credit and investment boom.
“This outlook is heavily affected by some major economic transitions that are creating global spillovers and spillbacks, particularly China’s transition to a new growth model and the normalization of US monetary policy. Both shifts are necessary and healthy. They are good for China, good for the US, and good for the world. The challenge is to manage them as efficiently and as smoothly as possible.”
“Our lives are being shaken to their very core by technological change, with the Fourth Industrial Revolution transforming economies as never before. The unprecedented speed of change, as well as the breadth and the depth of many radical changes unleashed by new digital, robotic and 3D technologies, is having major impacts on what we produce and do, how and where we do it and indeed how we earn a living. And while the transformation will proceed differently in advanced and developing parts of the world, no country or market will be spared from the tidal wave of change.”
It’s an interesting time for finance, says moderator Gillian R Tett. In 2007, bankers were on top of the world, holding their heads up high. Then, the crash, and since then many of the panels here in Davos have been dominated by what went wrong and what could be done to make things safer. Now, the discussions are forward looking, with less focus on regulation and more attention on fintech and the changes – both positive and negative – that are happening in the world of finance. The biggest challenge, argues Tett, isn’t a crisis in regulation, but the new players. Although regulation has moved out of the spotlight, there is still work to be done in this area, argues Christine Lagarde. There are issues between the US and Europe around over-the-counter derivatives and clearing systems which are not progressing at the speed at which they should. These areas need more regulation, says the IMF head. Basic retail banking is changing, Lagarde goes on to say. It’s being disrupted by innovations and there are people now who have never been – never had to – go into a bank. But this is merely another way of doing business. Virtual currencies and blockchains, on the other hand, can cause deeper disruptions. They may be relatively small (the current value of virtual currencies is around $7 billion), and may be nothing to worry about. They could also turn out to be beneficial – in reducing costs, providing better value and reaching the unbanked. But they could also a great instrument for crime. There is the potential for financing terrorism and the illicit economy, and they could disrupt monetary policy. The IMF has today released a report on this topic: Virtual Currencies and Beyond.
Will cash exist in the future?
The consensus is that, in 10 years, cash will no longer exist. Why? Because it’s inefficient, unnecessary and plays a key role in the illicit economy. Tom de Swaan believes that insurance will be the most affected of all the finance industries. Life at the top of a financial group was not, is not and will not be easy, because it is disruptive. “You have to find alliances with disruptors,” he says. “I haven’t met one who wants the insurance liability on their balance sheet.”
Dan Schulman, who heads perhaps one of the biggest disruptors in the industy – PayPal – says the biggest impediment to future success, is past success. “A lot of big companies extrapolate from what was and don’t imagine what could be. And this is a big danger.” His five key trends:
Money is definitely digitizing, cheques are disappearing. But let’s not forget that 85% of global transactions are still made with cash.
Mobile is exploding across the world. Soon everyone will have a smartphone and hold the power of a bank branch in one hand. This allows the industry to think about consumer transactions in an entirely different way, and it brings in billions of people.
The amount of data is exploding, and it’s not going to stop. Algorithms are the weapons of the digital company, and the ammunition is data. The better the quality of this data, the more value it is to the consumer. Security and privacy are genuine concerns, but data is going to change value propositions.
Industry lines are blurring, and product lines are blurring. Take digital payments – which involve tech companies, mobile carriers, handset manufacturers and merchants.
Security – something Schulman thinks about every day. There is so much data, and authentication is therefore very challenging.
Are regulators ready for this transformation?Tom de Swaan argues that regulators first need to define, what are they going to regulate? Privacy? The movement of data? The financial world is still rebuilding trust with consumers, and doing this while convincing them we need their data to create new products is a huge challenge. The regulatory environment also needs to be globally applicable.
Schulman: What are we trying to regulate, he asks? Let’s not look back at what happened, but what is likely to happen in the future. He thinks it’s likely a major hack could happen, but innovation needs to be responsible and we need to be able to try new things without worrying about over-regulation.
Lagarde supports Schulman’s idea of a “sandbox” to try new ideas, as this would help us to deal with trust and limit any damage to consumers. She doesn’t entirely agree, however, with John Cryan’s suggestion that regulation is made by policy-makers, rather than the regulators themselves. Governments do participate, she says, but the decisions are still being made by the likes of the Financial Stability Board and the Basel Committee, and then channelled into the regulatory system. For bad or for good, the profession still has a lot to do with how supervision is defined. Gorman believes that cyber-security issues need to be addressed. At the heart of the banking system, he says, is trust. When this goes, people want their money back, but the banks don’t have this money, they’ve given it to someone else, and this is what caused the 2008 crisis.
What about the future of blockchains? Cryan does not see this sector growing too quickly in the next 4-5 years. Banks are better prepared to manage cash flow of debt and are able to gain insights regarding the credit worthiness of debtors better than someone who can’t access this knowledge.
Video above: JP Morgan CEO Jamie Dimon on the Decade Ahead (Fortune Global Forum, San Francisco, November 4, 2015)
Jamie Dimon, the head of the nation’s biggest bank, has this piece of advice for other CEOs: It’s time to start thinking positive.
The CEO of JP Morgan Chase said leaders have been programmed to be risk averse since the recession and related financial crisis. But he argued that the economic forces are generally in America’s and the world’s favor. “Don’t be so damned depressed,” Dimon said at Fortune’s Global Forum in San Francisco. “We have all become risk experts and are afraid of our own shadow at this point. Move on. The world is going to be fine.” Dimon said the American economy was improving and that the world economy would double in size in 15 years. Dimon also said there has been too much focus recently on when the Federal Reserve would raise interest rates — an issue that he insisted didn’t matter much. But he described the waiting as a distraction. Instead, Dimon pushed of the idea of increasing rates sooner rather than later, as a sort of psychological boost. “I would argue that would reduce uncertainty,” he said. (source: Fortune Global Forum) JPMorgan Chase & Co. is the name of the holding company and the firm serves its customers and clients under its Chase and J.P. Morgan brands.
re: faster, better, quicker, cheaper--serve your clients, your customers; economy, blockchain, bitcoin, virtual currency, technology, banking, Future of the EU—“A breakup of the Euro today would cause a depression;” immigration reform, fiscal policy, government bureaucracy, regulation,
Meanwhile, Facebook just announced it will disrupt the global central banking system using a "New Digital Wallet [Calibra, domain: calibra.com] for a New Digital Currency [Libra, domain: libra.org,]" based on blockchain technology:
