Done catching up on the data after the trip. Some data dump tonight and tomorrow.
First up, from the Q1 earning data of US GSIBs, they are running closer to SLR limit than they admit, but they are still room in their balance sheet. So they will extend cheap leverage for fees.
First up, from the Q1 earning data of US GSIBs, they are running closer to SLR limit than they admit, but they are still room in their balance sheet. So they will extend cheap leverage for fees.
And freak out later (2H of Q2)..
GS for example will prefer debt underwriting (leveraged finance) with a 60+% ROE to reserves with 2% ROE at best (20x 10bps IOR).
But we are at the beginning of a new quarter, so they will make money first (extending leverage), and worry about the balance sheet later.
But we are at the beginning of a new quarter, so they will make money first (extending leverage), and worry about the balance sheet later.
Banks also need to take in more MBS. Big banks took up almost as much as MBS as the Fed did.
and more MBS are coming.
and more MBS are coming.
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