US Dollar: Capitulation?

When it comes to trade, there is no free lunch.  A lower US dollar helps US exporters.  But, for the US – a net importer by a huge margin – it raises the price of imports. So, it was really interesting to watch Treasury Secretary Mnuchin step in it explain that a lower USD would … continue reading →

The Wipeout Ratio

A simple calculation comparing major banks’ derivatives positions to their assets and capital shows how little it would take to wipe out either.  The first ratio is the multiple that derivatives represent of Tier 1 capital.  The second shows the miniscule percentage decline in the value of derivatives portfolio it would take to completely wipe … continue reading →