How bad was March?
March 30th, 2009By David Goldman
Jamie Dimon of JPM and Ken Lewis of BAC spooked the market late Friday by telling CNBC that the March trading environment was a bit tougher than January and February. Really? I wonder what asset class they are talking about. The asset class to which the banks are most exposed at the moment, commercial real estate, showed considerable improvement, according to the Markit Index of AAA-rated bonds backed by commercial mortages, or CMBX, with spreads tightening from LIBOR +800 to LIBOR +500. On a typical five-year security that’s neary 10 percent of price appreciation. Subprime AAA’s are about unchanged on the month. Corporate credit is considerably stronger. So what weakened?
March 30th, 2009 at 12:46 am
ZeroHedge reports from sources that January and February “profits” were a one-time goose up from AIG.
March 30th, 2009 at 5:54 am
Teresa, thanks for the link. Just read the email from a correlation trader on which it is based, which says:
“I can only guess/extrapolate what sort of PnL this put into the major global banks (both correlation and single names desks) during this period. Allowing for significant reserve release and trade PnL, I think for the big correlation players this could have easily been US$1-2bn per bank in this period.”
That’s an interesting story, but it only alleges $1 to $2 billion per bank in P and L in one desk. ZeroHedge’s numbers don’t work out here.
March 31st, 2009 at 9:46 am
[...] by all accounts, March was actually a pretty good month. Stocks were up and as David Goldman at AITimes notes, many of the assets to which banks are most directly exposed had a pretty good [...]