There's a minor but annoying new threat to holidaymakers and locals in European cities: silent, fast-moving electric cars, bikes and now, thousands and thousands and thousands of scooters. Lafferty News was in Berlin recently and the city felt like a daytime version of Blade Runner. The business model of everyone from the beloved global Uber corporation to local imitators: dump thousands of QR-code enabled electric scooters onto the streets of some big tourist city and hope to make some digital cash from it before a drunk tourist/local throws it into the river. Paris is overflowing with scooters now so the new world-changing scooter businesses have moved on to Germany, which legalised the vehicles last month. "European scooter start-ups including Circ, Voi and Tier are racing against US rivals Lime and Bird to establish themselves in Germany. Specific vehicle requirements such as dual brakes and licence plate holders are forcing the start-ups to design and manufacture new models especially for the German market," reports the FT. "'It's the next war — the next Paris right now is Germany,' said Maxim Romain, Dott's co-founder and chief executive. 'Everyone is focusing on it'." These new entrants have to compete with free offerings from local businesses such as music app Deezer, which has its own line of bikes too and docking stations, though many customers return the bikes by dumping them on the ground. Let's hope Bruce Packard will comment for us on the tragedy of the commons. Berlin's passive-aggressive cyclists haven't taken kindly to the intrusions to their cycle lanes. The end result of course is that Berlin is now becoming a little more like Amsterdam, where locals on bikes in cycling lanes are abandoning warnings and will practically mow down tourists wandering into the wrong lane on foot. Take that, capitalism.
The axe started falling on 18,000 jobs in Deutsche Bank yesterday, including many of the 8,000 Deutsche Bank workers in London. "'One London-based employee, who said he had been sent home shortly after arriving at work, blamed tough government regulation for European banks' failure to compete with Wall Street rivals. "Since the financial crisis European governments have engaged in banker-bashing and enforced crippling regulation," he said. 'I don't think we'll be the last European bank to do this. The Americans have won the war, good for them'." Of course, the ex-banker is talking about investment banking, now that Germany has thrown in the towel after nearly driving Europe's biggest bank into the ground in an effort to be an investment bank. The rise of investment banking in the 1980s, driven in part by deregulation on Wall Street and the unravelling of the 1930s consensus known as Glass-Steagal, coincided with the rise of the modern wave of capital globalisation and its attendant promise of the US as the policeman of the new world order. That didn't turn out well, did it? In fact, the rise of anti-globalist movement provided the template for Donald Trump and Boris Johnson, who expertly dressed right-wing politics in the clothes of rebellion. The world these days is looking a lot more compartmentalised. So the Americans won the investment banking war, did they? Let's see how that looks in a couple of years.
Michael Lafferty writes: Deutsche Bank is restructuring 18,000 AND the newspaper stories report Deutsche is finally catching up with the likes of large cut backs at HSBC, UBS, Barclays, Royal Bank of Scotland, which cut back investment banking in the years following the 2007-8 crisis. But even these banks are trading on less than their price to book value, most between one-half and one-quarter book value, implying that they can't make their cost of capital even in this very benign part of the credit cycle. Banks will certainly report much worse results in the next recession. Therefore the time has come to break up the financial conglomerates of the world before the next crisis, and where better to start than in Europe? Investment banking and commercial banking should never have been allowed to co-mingle across the past quarter century — It took the great depression to cause such harm that the Glass Steagall act to be enacted. Do we really have to wait for the next "great" crisis?
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