Blade Runner Bankers - Like Tears in the Rain.
I was there at the fall of Lehman's, The LTCM blow up, the Icelandic bank implosion and very many other bank disaster stories. I feel like a slightly porky version of that bloke Rutger Hauer dying on the roof at the end of the film 'Blade Runner'. Apparently his famous speech is known as Tears in the Rain - I am more beers in the rain but that is another story.
Banks fail and the Eurozone has hamstrung its members from helping to bail out their own domestic banks. That didn't seem to stop the UK giving RBS 45 billion quid back in 2008 to stop it from going under. They promptly lent half of that to the American firm Kraft in 2010 to buy out the bluechip UK firm Cadbury's (founded back in 1824). The most galling thing about that story is that Cadbury's used to bank with RBS at the time.
So I might be forgiven for a little schadenfreude for what is happening to Deutsche Bank right now. I have not been a fan of big banks since HSBC stopped me having such a strong personal relationship with my local manager that we used to have a Christmas Lunch together every year. When it became an automated service with me shouting 'my voice is my password' repeatedly like some nutjob into my mobile I gave up thinking there was bright future for mainstream banks.
Like everything else the Banking Institutions are falling victim to technological advances. I can now open a business account online with one of the new tech banks like Holvi, Monese or N26 to name a few for very limited to no cost and little in the way of Credit hoops.
On a macro level it is probably appropriate to have minimal exposure to the largest financial stocks as I expect the online no cost banking sector to expand massively. As regards trading desks, with the advent of the huge investment inhouse platforms that are semi automated there is far less need for a man at the end of the phone. All this automation was brought in to reduce risk. I suppose if you have less staff there is less risk as well.
Best
Don
