Föhrenbergkreis Finanzwirtschaft

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Archive for 4. Juni 2019

The A… has Landed!

Posted by hkarner - 4. Juni 2019

Date: 03-06-2019
Source: The Wall Street Journal
Subject: Trump Criticizes London Mayor Sadiq Khan as He Arrives in U.K.

President opens a four-day swing through Britain and France; his visit is likely to feature mostly festivities and commemorations, and little deal-making

LONDON—President Trump courted controversy before he arrived in Britain for a three-day state visit, reopening a long-running feud with London Mayor Sadiq Khan by calling him a “stone-cold loser.”

Hours before he touched down in the U.K. on Monday morning, Mr. Trump launched a Twitter spat with the popular mayor—who had previously criticized the state visit—saying that Mr. Khan has “done a terrible job” as London’s mayor and mocking the mayor’s diminutive stature. Mr. Khan responded with a video where he stated: “President Trump, if you’re watching this, your values and what you stand for are the complete opposite of London’s values and the values of this country.” Den Rest des Beitrags lesen »

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Plunging Yields Expose Sorry State of European Banks

Posted by hkarner - 4. Juni 2019

Date: 03-06-2019
Source: The Wall Street Journal

After a broad selloff last week, European bank stocks have given up their gains for the year, with valuations of some major lenders at multiyear lows

The global downdraft in bond yields and rising trade tensions are falling squarely on the shoulders of European banks.

After a broad selloff last week, European bank stocks fell again on Monday, with the valuations of some at multiyear lows. The Euro Stoxx Banks index is down 1.7% in the year to date, compared with an 8% rise in the S&P 500 banks index of U.S. lenders. Shares in Deutsche Bank AG touched an all-time low Monday of €5.85.

It is a sharp reversal from a little over a month ago, when the European bank index had been up as much as 19% for the year.

Driving shares lower: European banks have been buffeted by the recent plunge in Europe’s already low interest rates. German 10-year government bond yields hit a record low of negative 0.21% on Friday. Low rates crimp banks’ net-interest margins, the difference between what banks pay for funding and what they make from loans. The low yields are being driven by worries about the strength of the global economy, making safe assets more attractive.

Investors said they expect the pain for banks to continue until interest rates eventually rise. But many economists don’t expect the European Central Bank to move benchmark rates for years.

“I can’t see a reason to invest in European banks at the moment. They are being hit from all sides,” said Chris Garsten, a European equities fund manager at U.K.-based Waverton Investment Management.

Among the worst performers is French bank Société Générale SA, whose shares are down nearly 20% so far this year and trade for less than a third of their book value, the lowest since 2012 during the throes of Europe’s sovereign-debt crisis.

The ECB last week in its financial stability report slashed forecasts for banks’ return on equity, a key profit measure, indicating more trouble may lay ahead for lenders.

“Profitability continues to fall short of the returns required by investors for the majority of euro area banks,” it said.

President Trump’s announcement on Thursday of possible tariffs on Mexico hit the shares of Banco Bilbao Vizcaya Argentaria SA and Banco Santander SA, two of the region’s largest banks. Both rely on their Mexican operations to offset their slower-growing European businesses.

The headquarters of Spanish bank BBVA, whose shares were hurt by President Trump’s tariff threat to Mexico, in Madrid.

U.S. bank shares also fell in May because of concerns about the effect of dropping Treasury yields on their lending margins. But American banks have been supported by a relatively healthy economy and cleaner balance sheets.

In a sign of the differing fortunes between European and U.S. banks, the eurozone’s eight largest banks, including France’s BNP Paribas SA and Dutch bank ING Groep NV, have a smaller combined market value than JPMorgan Chase & Co., despite the Europeans having triple the assets.

Filippo Alloatti, a senior credit analyst at Hermes Investment Management, said European banks have little choice but to cut costs, but that “it’s a politically sensitive topic. Unions and politicians don’t want to see banks closing branches and reducing their footprint.” Den Rest des Beitrags lesen »

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What’s Left of the Left?

Posted by hkarner - 4. Juni 2019

Date: 03-06-2019
Source: Foreign Affairs By Mitchell Abidor

The European Elections and the Rise of the Greens

For the past 29 weeks, every Saturday in France has centered on the demonstrations of the yellow vests. The left, the right, and the politically unclassified and unclassifiable have participated in these demonstrations, which have at times descended into violence on the part of either the demonstrators or the supposed forces of order. Whatever the politics of the participants, there has been one common denominator: bottomless hatred for French President Emmanuel Macron.

The right believes that Macron is turning France over to European bureaucrats and opening its doors to immigrants; the left views him as the president of the rich. To all who protest, and not only them, he is someone with no understanding of, or concern for, the average French citizen. And so, every week like clockwork, he has been reviled and insulted at weekend marches across France.

The European elections, which took place May 23–26, could not have come at a worse time for Macron. The elections would be a plebiscite on Macron’s rule, and the opposition saw them as a golden opportunity to humiliate him. The situation was ripe for a political turning, and the further growth of the far right seemed certain. A transformation of French and European politics was in the offing. Den Rest des Beitrags lesen »

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