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Strategies & Market Trends : World Outlook

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To: Les H who wrote (48732)11/6/2025 1:53:20 PM
From: Les H  Read Replies (1) of 48770
 
FT: Deutsche Bank seeks way out of AI financing riskDeutsche Bank granted large loans for construction of AI data centers. This means concentrated risk for the bank. There are ways out, but they come at a cost.

FT: Deutsche Bank seeks way out of AI financing risk | heise online

Is it Big Short 2.0? Deutsche Bank reportedly shorting AI stocks as data center risks emerge

Is it Big Short 2.0? Deutsche Bank reportedly shorting AI stocks as data center risks emerge

Reminds me of the large investment banks buying mortgage-backed securities and the trading department for Goldman Sachs, for example, was buying credit default swaps and shorting bank stocks. Many thanks to Alan Greenspan who lobbied Congress to repeal Glass-Steagall during the 80's and who later became the chairman of the Federal Reserve. He still held the position when Glass-Steagall was repealed in 1999. It was merely a formality as the Citigroup-Travelers merger had already been greenlighted.

The merger of Citigroup and Travelers, which was announced on April 6, 1998, was a significant event in the history of financial services. It was a strategic move to combine Citicorp's commercial banking expertise with Travelers' brokerage and insurance capabilities, creating a financial services giant valued at $140 billion. The merger was a response to the repeal of the Glass-Steagall Act, which had separated commercial and investment banking in the United States. The merger allowed Citigroup to market mutual funds and insurance to Citicorp's retail customers while giving the banking divisions access to an expanded client base of investors and insurance buyers. However, the merger also led to challenges in managing Citigroup's diverse businesses, including the spin-off of Travelers' insurance businesses and the investment banking arm's difficulties in mortgage securitization. The legacy of the merger has been a subject of debate, with some viewing it as a visionary step and others as a disaster in terms of cultural integration and risk-taking.
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