81–90 of 115 posts
$13B is a more than 96% discount on the stated $360B asset value, what am I missing? Unless it means (or is including) assets held for clients in nominee accounts?
if you counted Assets under Management, Blackrock would have a valuation of 7 trillion. That clearly isnt the case. They dont actually own the assets
$13B is a more than 96% discount on the stated $360B asset value, what am I missing? Unless it means (or is including) assets held for clients in nominee accounts?
Correct. They bought the business and future cash flows but the AUM are not included in the valuation beyond the extent to their contribution to cash flow.
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This is really going to end up biting everyone in the ass though. What happens when we have another market crash and everyone is broke because they put money they would have saved into investments instead and now they have no safety net?
I don't understand negative interest rates at all, but surely something is deeply broken behind this, and it will crash in one spectacular way or another.
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With the dollar getting so strong and since we are now post brexit, I expect capital flight. The people running the show have zero understanding of how banking works. And no, I’m not being arrogant - negative rates destroy capital, which is not what you want in a bank. If you look at the largest European banks, they are all very weak (due to many factors, not just this one). However, negative rates is making them wea…
What would be the solution for this? Which actors/groups ought to do what? Could you explain this a bit? Thanks!
What you're asking is sort of like this, "the big dam is breaking apart right now because of all the rain, and the rain isn't letting up. What do we do?"
Demographic challenges are really tough to overcome because they affect the demand of everything. As people have fewer kids, there is not as much need for schools, or teachers, or pencils, or wood to make those pencils...
As people get older, they tend to want smaller houses (kids are grown and out of the house). Smaller houses use less wood, less heating and air conditioning, etc.
One last thought for you: Japan, doesn't have millennials. That's right - there was never a second big population boom after their baby boomer generation.
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Correct. They bought the business and future cash flows but the AUM are not included in the valuation beyond the extent to their contribution to cash flow.
Sorry, I'm still confused, you're saying the $360B 'assets' figure is assets under management? Seems an odd way of describing it, so I didn't even think of it at first, but I can't see how else 'assets' would be so much larger than the valuation.
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I don't understand negative interest rates at all, but surely something is deeply broken behind this, and it will crash in one spectacular way or another.
No, what's actually broken is positive investment rates. Why would the central bank pay you (i.e. print new money and give it to you) just because you have some money lying on the central bank's account? And by "you" of course I mean big 1% banks, not the 99% population who don't have access to this feature. Commercial banks should be making money by taking consumers' deposits and loaning them out to businesses, taki…
That was all I was talking about. Why isn't that happening anymore?
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I'm confused how this is valuable. If the retail traders are wrong, then why do you want that information?
It's called adverse selection. You don't want to be on the other side of an order from an informed trader, because the market is moving against you in the short run. In the longer run, if the big fund is more often correct than not, then you are also more likely to have made a losing trade. HFTs care mostly about the effect on the market today, so they probably don't care whether the information is correct or not, th…
It ought to be pretty straightforward to implement this with some sanely written software connecting to your brokerage of choice. You may lose out on revenue streams like securities lending, but it's probably not that much anyway. Anyone have any experience with this?
I rely on Matt Levine to explain, more clearly than I could, how brokerages make money ("The Trades Will Be Free Now"): https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr... Let me highlight a key passage: "Even this understates the change, because the actual way that stock brokers work today is that you keep some cash in your brokerage account to fund potential trades, and the broker earns interest on that…
For an established bank like MS, the net-interest is a drop in the bucket. The strategy here is about getting a young, educated, well-off retail base.
The demographic trends are such that there is a multi-trillion inter-generational wealth transfer occurring over the next decade as the baby-boomers pass on their wealth to their millennial kids. You want to get in front of that.