Bank Disruption Revolution From All Angles: Lindzon

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May 19 (Bloomberg) -- Bloomberg Contributing Editor Bill Cohan and Howard Lindzon, co-founder and chairman at StockTwits, discuss Deutsche bank’s plans to raise $11 billion, the state of the major banks and the importance of capital requirements to banking regulations. They speak on Bloomberg Television’s “Bloomberg Surveillance.”


They are coming out and massaging the real story.

They need more capital.

They have to raise it.

It is a cash stall.

What if i am a shareholder and say no?

You get deluded.

At the same time, the stock price probably goes down.

Returning price on equity.

How do you do that?

Bank of america merrill lynch says they are not going to do that in the know this morning.

Now that they have to raise more capital and prove they have more capital, they need to rethink where they will allocate resources.

Like every other bank on the street, it seems like pulling back from fixed income and commodities is the way to go.

Anyone left in a better position as a result of this?

Lex if i am goldman sachs come i am pretty happy these days.

Barclays pulling back.

They are basically saying we do not want to be an investment bank anymore.

A slowdown in fixed income currencies commodities.

Is that slow down a one off or do you look at it as a structural slowdown?

The things are never one off.

They seem like they are at the time, but these things add and flow all the time.

That is why goldman is in the businesses and the way, so that one can complement the other.

You see a slowdown.

Part of which is structurally driven because the capital requirements and not allowed to be in certain business lines anymore but they will figure it out.

We will not be talking about this in a few years.

Who will step in and make markets?

If i am goldman sachs, i am loving this.

J.p. morgan chase and morgan stanley to a lesser degree.

Bank of america to a lesser degree.

The american banks rarely better positioned.

Is this.

Call to senator shelby being out on the white house friday like this remember that moment?

We have the courage to do this.

We clear the markets.

I am not sure.

The truth is, by relating the banks, by pouring the capital into the banks quickly we've benefited our banks.

No question getting around that.

Whether that benefits the american people or something else.

Why our regulator still convinced raising capital is the best way to shield the bank from financial stocks?

When asset values decrease, a two percent decrease in the asset value wiped out equity count.

By having more equity, it will take a bigger decrease in the asset value to wipe it out.

I personally do not think it matters much.

It should be more about accountability for your actions.

Make sure you have skin in the game for what you do.

Apple could buy deutsche bank.

Several deutsche bank's. you do not like the banks.

Why is that?

What is great about america is weakened vote with our pocketbooks.

It has been a bull market.

I do not object on the banks, think about the banks.

A lot of money to make without thinking about the banks.

Look what silicon valley has done in new york in brooklyn during the too big to fail discussion.

They have disrupted it.

All of the stuff that happened in 2008 while we were saving the banks, they were getting disrupted underneath.

This will all be fixed.

It goes back to the directv comment from the analyst.

10 years.

We are still paying the price for goldman sachs going public and all the banks going public.

These rules that we trust congress and government to maine, we pay the price with the dilution 15 years later.

A goes back to the original observation, we have to go back to the partnership approach.

Publicly traded banks.

If that is the case, what can the banks learn from silicon valley?

What are best practices?

They are learning nothing.

They will get fat.

They will not take the same risk because they have great jobs.

You put the grid traders -- good traders -- not hiring kids on the street anymore because they have to come from harvard and whatever, what is happening is much as a hated wall street because they do not want to do with regulation.

They will come from wall street, whether it is rowboat advisers or robin hood you have that was zero commission trading, or disrupting because of acquisition.

It is coming.

West is coming east.

This is going to be a revolution.

Coming from many different angles.

If i could predict that, i would be rich.

So high for investment banking.

I do not see upstarts in silicon valley.

Maybe they can disrupt the brokerage.

It is great for andreessen and fred wilson and even guys like me, t. rowe price, blackrock -- they cannot get into these deals unless square paying $5 billion were a startup in a private weight.

What happens is they cannot get into the deals until it is way too late.

They will get buried in the deal because they are overpaying for the start up.

But credit suisse has 45,000. jpmorgan 150,000. credit suisse smaller than the bank inks but we still treat them like a big ink.

They are a big bank.

There are not that many big banks.

National champions in switzerland.

Basically now in the u.s. we have national champions.

They will be protected.

Would you be long the banks?

They do not exist for the benefit of shareholders.

They exist for those that work there.

A critical question that even the supporters will bring up.

Trying to figure out the bone i is.

They get multiple bonuses.


dugan will walk out with select bonus intact.

They call it other things.

How about that?

Guest host for the hour.

We want to get their take on our single best chart, which is next.

Our ceos of little bit overcommitted?

We will discuss coming up next.

This text has been automatically generated. It may not be 100% accurate.


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