The Mooch is Gone!
Again… all the fun stuff always happens while you are out on vacation. Anthony Scaramucci leaves the White House as a career .500 hitter. He stabbed Reince Priebus in the front, but departs the job without the scalp of Steve H.B. Bannon. Like I predicted when he was hired, the Mooch was fun to watch. Were you not entertained?
The straight shooter at Stifel
Stifel CEO Ron Kruszewski has long been one of my favorite characters in financial services. He has certainly ruffled some feathers over the years, but that is because he always tells it like it is. And he is doing the same thing yet again when it comes to the fiduciary rule.
Is the safest CLO debt too safe?
I won’t dive into all the gory details of the trouble collateralized loan obligations caused during the last financial crisis, but let’s just say a healthy CLO market is a good thing while a collapsing CLO market is not so good.
That is important to remember because CLOs are a hot commodity once again. Before the crisis, most CLO debt was held by entities funed with short-term commercial paper. Which is also a market that is great when it is healthy, not so great when it is not.
In the aftermath of the crisis – and for reasons both market and regulation-based - most CLO debt is held by banks and insurers. As the WSJ explains, this presents a new kind of threat:
“The pinch point now is on the owners of CLO equity, who are alternative funds and CLO managers themselves. As loan spreads fall, the income left over for them is squeezed. And if returns for equity get too slim—before there is even any pick-up in defaults—CLO issuance will dry up and existing deals could be forced to stop reinvesting, let loans mature and repay their investors.”
That would not be good because for the good times to keep rolling, the debt needs to keep rolling over.
An intriguing headline…
But if every crypto currency in the world collapsed or disappeared tomorrow, would the global economy notice?
CME Group is going big for GFLC #10
The team at CME Group is going to mark the 10th anniversary of the Global Financial Leadership Conference with a bang. I was told a couple months ago that there would be a strong list of political speakers, but this is ridiculous: Barack Obama, George W. Bush, Jeb Bush, Ban Ki-Moon, just to name a few. Wow. Yes, I am already looking forward to covering the event in November.