Good morning everyone,

Today we’ve finally got definitive proof that it’s good to be filthy rich and coverage of the steaming pile of dog sh*t that is Deutsche Bank.

Enjoy the next 4 minutes and 3 seconds.

Keep raging,
Jeff & Jason


THE MARKETS


THE HEADLINES

Make it stop

Image result for oh the humanity gif

The good news about Deutsche Bank’s annual shareholder meeting held in Frankfurt yesterday? It wasn’t raided by police. So, they’ve got that going for them.

Simply put, things at DB are going about as well as they are at the contractor who set Notre Dame on fire. And CEO Christian Sewing wasn’t trying to sugarcoat it, admitting that major cutbacks were needed in the bank’s investment bank.

For what it’s worth, he also indicated that the bank’s share price was a major motivator for him … which means he must have Tony Robbin’s levels of motivation. Yesterday DB’s stock price hit a new low of €6.35 and shares of the beleaguered German giant are down 41% YTD.

Despite giving it the old college try, Sewing received 75% shareholder approval, which is a C for those keeping track at home. Last year he saw a 95% approval rating.

Anything positive?

But it’s not all bad at the former bulge bracket bank. While Deutsche was busy trying to polish the turd that was its investment bank it overlooked valuable assets such as its transaction bank. Sewing has vowed to give new leader Stefan Hoop the resources to succeed, however. The good news for Hoop? Anything short of going full Danske Bank will be applauded.

The bank is also trying to figure out how to most effectively wring every ounce of profit out of its asset management arm, DWS. Sewing has plans to make DWS a top-10 asset manager in the world (*double checks to make sure he didn’t mean top-10 asset manager in Germany*). The only problem? It’s unlikely that the firm will be able to double its assets without a merger or joint venture, which isn’t off the table.

Bottom line …

Things are bad at Deutsche Bank. Like really f*cking bad. Don’t believe me? DB inexplicably walked away from a Commerzbank merger which was literally its only hope.

Bottom line: “*Christian Sewing begins updating his LinkedIn profile*” – Jason


Family Matters

David Tepper, manager of the global hedge fund Appaloosa, is considering returning all outside capital to third-party investors and converting the fund into a family office.

Oh, so he could spend more time with his family? Well … not quite. A family office means he’d only manage his own money. He’d still be allowed to be an absentee father.

The billionaire, who has a net worth of roughly $11.6B, has struggled in the past decade to provide yields above and beyond the S&P’s average return. Still, despite having only beaten the S&P once in the past ten years, the $13B firm has returned 25% on average since its inception in 1993.

So what’s Tepper’s next move?

Once a minority owner of the Pittsburgh Steelers, Dave sold his stake last year and purchased the Carolina Panthers for a cool $2.2B. And while some outside capital could remain at the fund, he would focus on turning around the Panthers, who went 7-9 last season.

Bottom line: “Might I suggest bringing back Chris Weinke?” – Jeff


IN OTHER NEWS

  • Trade war fears sent US markets into a tailspin on Thursday, with the S&P dropping for the fourth trading day out of five, and the Dow losing 286 points. The genesis of the most recent market woes? Scathing commentary published by Chinese newspapers claiming that the US is impeding Chinese companies. Technically they aren’t wrong. The yen gained on the dollar and 10-year treasury yields fell to their lowest point since 2017.
  • Purdue Pharma will be looking for a new bank after JPMorgan took the high road and cut ties with the OxyContin maker. The bank distanced itself from Purdue citing reputational risks due to the drug-maker’s role in the US opioid crisis. JPMorgan is giving Purdue six months to find a new bank and get their books switched over, and as of now, it looks like that bank will be Comerica. Purdue has “Wells Fargo customer” written all over it.
  • Elon Musk and The Boring Company finally have a dollar bill to pin on the wall. The not-so-novel diggers have their first paying customer. Las Vegas has commissioned a $48M, 1-mile tunnel to connect each end massive convention center. According to Musk, the project will be done by the end of the year. Then it’s presumably back to hats and flamethrowers for The Boring Company.
  • Facebook appears to be keeping its word about trying to improve the safety of its site. The tech giant took action to ban 2.2B fake accounts in Q1. Compared to the previous quarter, where only 1B accounts were removed, that’s a step in the right direction. Zuck and the gang also announced that they’d removed more than 1.5M posts from the platform in Q1 for promoting drugs and violence. So, all the fun stuff then?

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