Another poor showing from the banking sector and the bonuses get cut
I'm loving the restaurant index. When the wife was running one in London I'd always ask her for a report just before UK retail sales. It just gave me a small clue on spending habits. I agree with Adam that these small data points can be a great precursor for the bigger data.
On to the subject at hand. Restaurants will be one of the industries that may suffer from Credit Suisse's announcement that they will slash bonuses to their global markets (sales and trading) division following their first annual loss since 2008.
So far the 2015 banking revenue reports have been on the less impressive side, to put it mildly. Deutsche Bank also posted their first loss since 2008 and are in all sorts of trouble over other things including a $3.1bn lawsuit over toxic mortgages. They're also being hit today by a crash in their CoCo bonds (bonds that convert to equity in the event of a bailout). Their CDS are at the highest since 2012, note Zerohedge
We've been hearing about job losses and division closures at many banks recently and this really should be a period when they are looking to grow not make cutbacks. It sounds more like we're still living in 2012/13.
I won't go so far as to say we're on the verge of another banking crisis but that may not stop the market from thinking about it. But, we need not worry about the fallout if it happened anyway as governments and central banks have us covered by their backstops don't they?...Don't they?
Bonuses are just that though, a bonus, although many have become reliant on them to boost incomes. They are always the first thing to go ahead of pay cuts and wholesale job losses.
It's another case of 'watch this space'.
