JohannesBorgen Profile picture
Nov 5, 2020 9 tweets 3 min read Read on X
An update post lockdown. Unfortunately, we don't have Google mobility data post-Oct 30th (start date of the lockdown) yet, so let's look at how hospital data changed since then. Quick thread.
From worse to better, let's start with ICU. Incidence and non-parametric fit.

I certainly can't see any change. Image
Confirmed by the statistical analysis of "R" for ICU data which is still hovering around 1.2 Image
Hospital incidence now.

Same, conclusion: the curve looks the same. Image
Confirmed again by R estimate still around 1.2... BUT we can see a tiny little improvement in R. Image
Now if you remember the original thread, I found that cases and ICU/Hospitals were lagged vs. cases and also that any impact on mobility would need 8-14 days to show in hospital data. So we should see more effects of lockdown in cases. What do we have? This. Image
Ok, I realise it's not obvious, but the ugly exponential now looks slightly more like an ugly straight line. Not great, but is it better? R estimates for cases confirm it's better. Image
R is only slightly above 1 now.

BUT - and this is a BIG BUT (!) the drop in R is almost perfectly synchronized with school closures due to the school holidays.

So you have two ways of seeing this.
1) the lockdown is working and we just need to wait a bit to see the impact on hospital data

2) the schools closing drove R down... reopening it during the lockdown means the whole thing will fail.

For now, I can't tell from the data which is right. Maybe Google data will help

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More from @jeuasommenulle

Oct 29
BNP has very good notes on the US elections and how to trade them. They are mostly focused on timing and the info you should focus on. Here's my summary
Before the elections

Apart from betting markets / polls, a source of info is mail-in ballot statistics.

Early voting doesn’t favor the Dems as much as 2020 (but Covid). Image
Before the elections

Some states - notably Wisconsin, Pennsylvania, Georgia, Michigan North Carolina - start counting on Nov 5th. They are important states so could provide info.
Read 14 tweets
Oct 29
Maybe you’ve seen the crazy price action on Close Brothers last Friday or heard about the Hopcraft appeal court ruling and its impact for UK banks.

What is it about?

I’ll try to explain why it’s important but not Armageddon. Image
This is all about getting financing when you buy a car, more precisely getting so-called “Point of sale” financing, i.e. the car dealer acts as broker for the actual bank or finance company providing the loan.
Back in 2021 the FCA banned a dubious practice: the broker’s fee was higher if the loan rate was higher, i.e. there was an incentive to propose a bad client deal. The Financial Ombudsman Service ruled (on pre-ban sales) with an indication of how redress should be calculated.
Read 12 tweets
Oct 15
Italian press reports that Italian banks will contribute to 3-4bn€ to Italy’s budget… but this will cost nothing to banks.

How is this possible?

Who’s ready for some Italian black magic and a thread on the beautiful world of DTA?
First some jargon busting: DTA means deferred tax asset, which is an accounting way to represent future lower payments on taxes.

If you think they’re just a technical detail, for some banks DTA represent more than 10% of their RWA – while their equity is 15-ish% of RWA!
How does this work? When you make money, you are taxed. Simple. When you are losing money two things can happen:

A. The loss is not tax deductible for some reason, but will be in the future (for example a loan loss provision)
Read 15 tweets
Oct 9
Commercial real estate lending is one of the biggest risks to the banking sector (hello, NYCB ?) – so it’s crucial that banks have an accurate assessment of the value of the collateral they have. The ECB did an inspection on this recently, and the results are hilarious. Thread.
For reference, the fair value of the collateral should be this Image
But what do banks really do? It's the horror museum.
Read 13 tweets
Sep 6
For those of you trying to make sense of that story, here’s a recap. It’s wild.

RBI is a large Austrian bank formerly making 50% of its profits in Russia. After Russia invaded Ukraine, what happens to this biz is obviously their key financial, strategic and political question
Everyone in the “West” is pushing for a full exit but it’s not that easy because there’s also Russian law, RBI staff on the ground in Russia, clients, etc., no easy buyer to find and some argue selling for à like SG did is just handing out money to Putin’s cronies.
In Feb 2023 things start getting a bit awkward for RBI: it receives a request for information from OFAC – but we didn't really get to know what it was about.
Read 17 tweets
Jul 22
What's going to be the costs of the Crowdstrike outage for the insurance industry? Impossible to know precisely but Mediobanca has a nice breakdown explaining why it won't be massive.

There are 3 areas of losses:

- cancelled flights
- Business interruption
- Cyber policies

1/n
Cancelled flights: reports are approx 5000 flights cancelled per day, still ongoing (backlog). That's big but 2010 Icelandic volcano had 100k cancelations ut MunRe explained the insured losses were low
munichre.com/en/company/med…
BI for a week is not big. For example Swiss Re paid 1.5bn for the entire Covid lockdown. This is not even remotely the same
Read 4 tweets

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