Charles Peabody, analyst at Portales Partners LLC, says the financial system is building up to the next Long Term Capital Management-type crisis, with counterparty risk the major danger for markets. He sees the next crisis in the sovereign debt/spread-product space. Peabody also looks at the quarter’s financials earnings and says money-center banks need to revive their consumer businesses, which make up 40 to 60 percent of their bottom-line. He says that involves three efforts: reviving the branch, credit card, and mortgage businesses. Peabody says the capital markets are in the late-stage of the business cycle so, while M&A and IPO business is booming now, banks will soon need to implement alternative strategies for growth. Peabody speaks with Bloomberg’s Kathleen Hays and Vonnie Quinn on Bloomberg Radio’s "The Hays Advantage."
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