For the first time since 2012, Bafin - Germany’s banking regulator, which for a minute looked like it might actually accuse Anshu Jain of lying about LIBOR - has closed a bank. All financial transactions by Maple Bank of Canada’s German subsidiary have been halted due to "imminent over indebtedness."
- European stocks plunge as Lunar New Year offers no cheer (Reuters)
- European Stocks Fall, Credit Weakens as Signs of Distress Abound (BBG)
- Management trouble at world's biggest hedge fund: Bridgewater succession plan in flux as heir Greg Jensen steps back (FT)
- U.S. athletes should consider not attending Olympics if fear Zika - officials (Reuters)
- Geithner Gets JPMorgan Credit Line to Invest With Warburg Pincus (BBG)
- Top Clinton Donor Wants a Law Against $1 Million Gifts Like His (BBG)
Everything went from bad to worse once Europe opened, and things started going "bump in the morning" across the European banking sector, where not only has it been more of the same with CDS spreads for major banks - most notably Deutsche Bank - continuing their surge wider, but also EM spreads to Bunds all following, with the Portugal-Germany Yield spread blowing out above 300 bps for the first time since 2014, and other peripheral nations following.
An Exasperated John Kerry Throws In Towel On Syria: "What Do You Want Me To Do, Go To War With The Russians?!"Submitted by Tyler Durden on 02/07/2016 - 23:48
The only leverage the ‘Sultan’ may enjoy at the moment. From Brussels to Berlin, sound minds are terrified that the EU is now actually hostage to Erdogan’s Kurd “priority”, while Ankara is doing next to nothing to fight massive migrant smuggling. And that explains German Chancellor Angela Merkel’s own desperation. How could the alleged most powerful politician in Europe falls for such a crude extortion racket? The ‘Sultan’ wants a lot of cash, a lot of concessions, and even a further shot at entering the EU. Otherwise, he won’t turn off the tap on the grim refugee flood. No wonder the regime change rumor mill is frantic. In Ankara? No; in Berlin.
Someone didn’t read the refugee pool rules cartoon...
With China offline for the next 7 days as its celebrates its Lunar New Year, here are 7 bullets from Evercore ISI to get everyone up to speed on the latest developments in the world's most troubled growth economy.
We are hostage to a dysfunctional monetary system, run by people who don’t understand how it works in the first place. No wonder the global economy is in the doldrums, and finance markets are having dyspeptic attacks.
The Number Everyone's Been Waiting For: Chinese Reserves Plunge By $100BN - What Does It Mean For Markets?Submitted by Tyler Durden on 02/07/2016 - 20:22
As it stands now what is really happening with the biggest risk factor to commodity, credit and capital markets, remains a mystery, and instead of getting some much needed clarity from China's January reserve number, the world's traders and investors will now have to wait for the February reserve update one month from now to learn if China has managed to slay its capital outflow demons, or if these were just getting started.
Venezuela's central bank has begun negotiations with the suddenly troubled Deutsche Bank to carry out gold swaps "to improve the liquidity of its foreign reserves as it faces heavy debt payments this year", payments which it won't be able to fund unless it manages to "liquify" its gold. "One of the sources said the central bank has taken an unspecified amount of gold out of the country so that it can be certified, which is required for gold that is used in such swaps."
Like a phoenix rising from the ashes of the post Dot-Com ruins people were told not only was it “different this time,” they were also instructed to observe even the phoenix bird itself had morphed into what is now commonly referred to as a “Unicorn.” And any comparisons to the prior meltdown in the land of Dot-Com were met with howls and scowls of, “You just don’t get it!” or worse. The real issue was, it had nothing to do with “getting it.” It’s all been about Silicon Valley itself acting and arguing as if the past were irrelevant. Now many are coming to a very stark realization that the Valley may in fact once again have repeated all the same mistakes.
Despite a collapse in yields and implicit plunge in the odds of a rate-hike anytime soon, asset-gathering, commission-taking talking-heads continue to spew unrealities about the economy and where it goes next as excuse after excuse (low oil is good, services trump manufacturing etc) are discarded. What is worse is that none other than The Fed's "owners" - the primary dealers - refuse to play along with The Fed's transitory narrative as their Treasury Bond position is the longest since 2013.
A multi-decade Credit Bubble is coming to an end. The past seven years has amounted to an incredible blow-off top and the ongoing worldwide collapse in financial stocks provides powerful support for the bursting global Bubble thesis. Few are yet willing to accept the harsh reality that the world has sunk back into crisis as mal-investment, over-investment and associated wealth destruction remain largely concealed so long as financial asset inflation persists. This is true as well for wealth redistribution. The unfolding adjustment process will deflate asset prices so as to converge more closely with deteriorating underlying economic fundamentals.