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Deutsche Bank CEO Christian Sewing promised to overhaul the company’s org chart back in May, and it looks like he’s making good on his word. Announced yesterday, the firm will be pulling out of the global equities biz, cutting some 18k jobs by 2022. The goal of the reduction is to cut adjusted costs by $19B over the next several years.
The move is unsurprising, to say the least. DB’s decision to run sit down at the adult’s table on Wall Street has gone about as well as Steve Madden’s decision to IPO with Stratton Oakmont. Scandals, fines, at least one police raid and performance that was so consistently piss poor one can’t help but be impressed left the bank on life support.
And now CEO Christian Sewing is pulling the plug under the ruse of the bank “returning to its roots.” It’s probably worth noting that its “roots” include funding Hitler’s war machine …
Thank you for your service, Garth
DB’s big announcement came just days after investment banking chief Garth Ritchie announced he’d be stepping down from his role within the firm. Both Ritchie and DB say the move is a “mutual agreement.” Just like you told your friends after Beth dumped your sorry ass in seventh grade. Ritchie will remain on the DB board until the end of July and will continue to advise the firm through November. News of Ritchie’s departure sent stock prices up 1% on Friday. That’s gotta hurt the ole ego.
Ritchie had been at Deutsche Bank for more than 23 years, before investor unrest over Ritchie’s paycheck, and a series of scandals which named DB, surfaced. Ritchie himself was named in a probe into alleged tax crimes, an allegation which both Ritchie and Deutsche Bank deny. Oh, Ritchie was also in charge of DB’s equities business, so it’s likely he saw the winds of change a-blowin’ and got out of Dodge, er, Deutsche while he still could.
FELT LIKE SETTING RECORDS, MIGHT DELETE LATER
US markets participants have found themselves in a glass case of emotion.
It’s been a wild few days, to say the least. Let’s rewind, shall we?
Monday 7/1: Donny Politics’ big weekend at the G20, which included a sit-down with Chinese President Xi Jinping, ultimately resulted in a trade war de-escalation. Markets unsurprisingly were digging this, with the S&P hitting an all-time high.
Wednesday 7/3: Both the Dow and the S&P hit record highs in the shortened trading session. Why? Welp, it’s at least partially due to the ADP/Moody’s abysmal private payroll figure (102k vs. an expected 135k jobs added). Wait, what?! The markets believed that the paltry figure all but guaranteed a 50 basis point interest rate cut by the Fed.
Thursday 7/4: *Market participants let freedom ring and at least one loses a finger to a firework accident*
Friday 7/5: Everyone who wasn’t parlaying a Thursday holiday into a long weekend awoke to some bittersweet news: a (much) better than expected Labor Department jobs report (224k vs. 164k expected). The rebound vs. last month sent fears through Wall Street that the Fed, which utilizes the Labor Department’s figures, won’t lower interest rates, sending markets plummeting.
Although economists still believe there will be a 25 basis point rate cut, the chances of a 50 basis point cut are about as likely as the USWNT losing a Women’s World Cup … ever.
JIM BEAM’S KENTUCKY FIRE
A Jim Beam warehouse in Woodford, Kentucky caught fire late Tuesday night setting ablaze 45k barrels of whiskey, or roughly 1% of the company’s inventory. According to Bloomberg (clearly back of the envelope) calculations, this accounts for between $90M and $300M in lost revenue.
The fire burned for four days, as it was seemingly the more environmentally friendly approach to allow the ethanol flames to burn in lieu of putting the fire out with water and risking more whiskey runoff into the Kentucky River.
So, the river’s fine?
Not quite. Whiskey had already reached the river by Wednesday. By Friday the river was already visibly contaminated from a combination of the whiskey/water mix. Officials have reported thousands of dead fish, and hundreds of backwoods Kentuckians drinking the dirty hooch water just to catch a buzz before they got back to kissing their cousins.
Don’t worry whiskey fans, the preferred whiskey of fraternities that are about to get kicked off campus said that there shouldn’t be a shortage because the deceased barrels contained relatively young whiskey. I guess Billy Joel was right, “only the good die young.”
IN OTHER NEWS
- Remember MoviePass? The monthly movie subscription service announced that it would be taking the summer off as the company continues to struggle with cash flow. The shutdown began on America’s birthday, ahead of the release of the latest Spider-Man movie that did $100M in sales. MoviePass has been hemorrhaging money. You see, the company loses out if a subscriber sees multiple movies a month. On top of the poor business model, it started blacking out blockbuster hits.
- Boeing is still working to save face as it relates to the 737 Max crashes from last October and March. The aircraft maker has announced it set aside $100M earmarked for the families of the crashes that claimed 376 victims. The money will become available over the next few years and is unrelated to any legal settlements that Boeing may face. Hope the accounting intern who got stuck calculating the value of a life gets a return offer.
- Another day, another tariff. The US Commerce Department is imposing a 400% tariff on steel imports from Vietnam as it believes that companies are shipping goods via the Southeast Asian country in order to circumvent the tariffs placed on goods coming out of China. In some cases, other Asian nations are shipping mostly finished goods to Vietnam for finishing touches prior to shipping them to the US. Vietnam says it is already reviewing practices with China to investigate the country rerouting goods.
- Uber in. For the first time since it began a delivery service for people who can’t be bothered to drive all the way to McDonald’s, Uber Eats now has a dine-in option. Users can order food at a restaurant prior to arriving and sit in to enjoy their meal. The service will benefit restaurants who don’t offer delivery services and customers who can’t wait a single f*cking minute for the chef to prep their food.
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