RUNDOWN of how stock trading works, not quite behind the scenes but one-step-removed from retail customer:
- market making: buying and selling at market (with a tiny spread) so that even if there aren't immediately somebody on the other side of your trade, have no fear the bank is there.
- Borrowing/trading on margin stocks are assets, banks have them in custody, ergo clients can borrow against their very liquid/very observable assets.
- Corporates raising funds: usually banks organize IPOs, and take a cut for their marshalling-of-funds and analyzing and doing heavy market-making trading and book arranging for the first day of trading.
- prop trading
- derivatives (but that's largely a subsection of 1).
All of those are good when stocks go up; stocks are going up... ergo, banks' equities trading departments are having a fiiiiield day this earnings season.
Enthusiasm for AI drives the stocks of big AI-linked companies higher; worries about AI disruption causes dispersion among AI winners and losers; AI financing needs drive huge stock offerings. Just last month, SpaceX did an $86 billion initial public offering for SpaceX and Alphabet did about an $85 billion stock offering; SK Hynix did a $26.5 billion offering this month, and Samsung Electronics might be next.
Leverage + re-equitization of the US stock markets, yeeee-haaaaaa.
For corporate finance reasons, ompanies are creating a lot more equity, which might be hard for markets to absorb in the short run. But the financial industry transmutes some of it back into debt, making it easier to absorb. When big companies want to raise hundreds of billions of dollars of equity all at once, it is the job of the financial industry to make that possible
I guess the treasury companies -- which are poorly veiled share issuance factories moonlighting as shady bitcoin ETFs -- are in bad timing. Would have been great to sell shares into this market!
Also, funky one-liner about SPACs and, uh, illegal behavior.
I hadn't thought about how a bitcoin treasury company might have been a nicely complementary business for a drug cartel.
EVERY business has nicely complementary business for a drug cartel tho lol
I imagine that's part of the appeal
They are already doing it in Brazil; they are even mining Bitcoin.
Good for them. Is the bitcoin treasury side publicly traded? Because that's where the magic happens.
Ah yes, match made in heaven!
it is good to be a bank. Why would anyone go into any other kind of business?
too poor to start one + half the fun of business is the risk
Bank makes the most profits with zero losses from their end. Who wouldn't love that kind of business?
Market making doesn't get much attention from retail investors, but it's one of those invisible services that keeps markets functioning smoothly most of the time.