JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours

At JPMorgan Chase & Co., a learning machine is parsing financial deals that once kept legal teams busy for thousands of hours.

The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation.

https://www.bloomberg.com/news/articles/2017-02-28/jpmorgan-marshals-an-army-of-developers-to-automate-high-finance

Target2 Imbalances Hit Crisis Levels

Vast liabilities are being switched quietly from private banks and investment funds onto the shoulders of taxpayers across southern Europe. It is a variant of the tragic episode in Greece, but this time on a far larger scale, and with systemic global implications.

There has been no democratic decision by any parliament to take on these fiscal debts, rapidly approaching €1 trillion. They are the unintended side-effect of quantitative easing by the European Central Bank, which has degenerated into a conduit for capital flight from the Club Med bloc to Germany, Luxembourg, and The Netherlands.

This ‘socialization of risk’ is happening by stealth, a mechanical effect of the ECB’s Target2 payments system. If a political upset in France or Italy triggers an existential euro crisis over coming months, citizens from both the eurozone’s debtor and creditor countries will discover to their horror what has been done to them.

As always, the debt markets are the barometer of stress. Yields on two-year German debt fell to an all-time low of minus 0.92pc on Wednesday, a sign that something very strange is happening. “Alarm bells are starting to ring again. Our flow data is picking up serious capital flight into German safe-haven assets. It feels like the build-up to the eurozone crisis in 2011,” said Simon Derrick from BNY Mellon.

german-2-year-yield

The Target2 system is designed to adjust accounts automatically between the branches of the ECB’s family of central banks, self-correcting with each ebb and flow. In reality, it has become a cloak for chronic one-way capital outflows.

Private investors sell their holdings of Italian or Portuguese sovereign debt to the ECB at a profit, and rotate the proceeds into mutual funds Germany or Luxembourg. “What it basically shows is that monetary union is slowly disintegrating despite the best efforts of Mario Draghi,” said a former ECB governor.

The Banca d’Italia alone now owes a record €364bn to the ECB – 22pc of GDP – and the figure keeps rising.

Spain’s Target2 liabilities are €328bn, almost 30pc of GDP.  Portugal and Greece are both at €72bn. All are either insolvent or dangerously close if these debts are crystallized.

On the other side of the ledger, the German Bundesbank has built up Target2 credits of €796bn. Luxembourg has credits of €187bn, reflecting its role as a financial hub. This is roughly 350pc of the tiny Duchy’s GDP, and fourteen times the annual budget.

 

Fuse is Lit! Target2 Imbalances Hit Crisis Levels: An Email Exchange With the ECB Over Target2

 

Deutsche Bank Cuts 2016 Bonus Pool by Almost 80%, FAS Reports

Deutsche Bank AG cut its bonus pool for 2016 by almost 80 percent, Frankfurter Allgemeine Sonntagszeitung reported, a figure unmatched in the bank’s recent history as it tries to counteract the impact of low interest rates and legal expenses.

Germany’s largest lender is reducing the payments with an eye toward shareholders and is aware it will be “frustrating” for employees, Chief Administrative Officer Karl von Rohr told the German Sunday newspaper. The measures will affect about a quarter of the 100,000 staff. Some workers in key positions — about 5,000 in all — will get a special long-term incentive tied to the bank’s performance and paid out after as long as six years, von Rohr said.

https://www.bloomberg.com/news/articles/2017-02-26/deutsche-bank-cuts-2016-bonus-pool-by-almost-80-fas-reports?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

F-35 to Control Armed Attack Drones

The early phases of this kind of technology is already operational in the F-35 cockpit through what is called “sensor-fusion.” This allows the avionics technology and aircraft computer to simultaneously organize incoming information for a variety of different sensors – and display the data on a single integrated screen for the pilot.  As a result, a pilot does not have the challenge of looking at multiple screens to view digital map displays, targeting information or sensory input, among other things.

Another advantage of these technological advances is that one human may have an ability to control multiple drones and perform a command and control function – while drones execute various tasks such as sensor functions, targeting, weapons transport or electronic warfare activities.

http://nationalinterest.org/blog/the-buzz/f-35-control-armed-attack-drones-17474

 

Business leaders say Brexit already having negative effect

Business is already suffering from Brexit, according to some of Britain’s biggest companies, lending weight to a cross-party effort by MPs this week to avert the risk of the UK crashing out of the EU without a deal.

Despite a stream of positive economic data, an Ipsos Mori survey of senior executives from more than 100 of the largest 500 companies found that 58 per cent felt last year’s referendum result was already having a negative effect on their business.

Just 11 per cent found the Brexit decision had meant a positive impact while nearly a third — 31 per cent — thought it had made no difference to their company.

“Business in this country is already feeling the pain of the economic upheaval of leaving the EU,” said Ben Page, chief executive of Ipsos Mori. “There is no sign that this is likely to ease this year.”

https://www.ft.com/content/b1a38be4-e8a5-11e6-967b-c88452263daf