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Deutsche Bank Is Back: 5 Year Sub CDS Soar To Record High

"Worse than Lehman" is how one European bond market trader described the carnage this week as the brief respite that ECB monetization and debt-buyback rumors provided yesterday have morphed into utter destruction this morning. European (and US) banks are a sea of contagious red with Deutsche Bank the tip of the collapse spear. Credit risk on Deutsche has exploded this morning with Sub CDS trading up 85bps to a record high 540bps... eerily reminiscent of the pre-Lehman bankruptcy week in 2008.

Time to panic now?


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Frontrunning: February 11

  • Gold Roars to One-Year High as Turmoil Drives Safe Haven Demand (BBG)
  • Banking Stocks Pummeled in Europe (WSJ)
  • Dollar, stocks plunge sparks scramble for safety (Reuters)
  • Nymex Crude Slips Below $27 a Barrel (WSJ)
  • No Respite for S&P 500 as U.S. Stock Futures Join Global Selloff (BBG)

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Sweden Slides Further Into NIRP, Cuts Rates To -0.50%

The currency wars continue unabated as does the developed world's experiment with negative rates as the Riksbank moves further into NIRP, cutting the repo rate by 15 bps to -0.50%. "Uncertainty regarding global developments is still high, with low inflation and several central banks pursuing more expansionary monetary policy [and] Swedish monetary policy must relate to this," the bank said.


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Bank Of Japan Intervention Sends USDJPY Soaring

Just like two days ago, when for the first time since 2011 the BOJ intervened directly in the USDJPY market, moments ago Kuroda's trading desk once again decided to sell a boatload of Yen, with the key carry pair trading at 111.25 and threatening to take out the 110 support, in the process sending the USDJPY higher by 175 pips in a matter of seconds to just above 113.


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JPMorgan: "It's Hard To Imagine An Uglier Morning"

"Trying to divine the end of the rout is difficult given the globe is in the midst of a series of tightly intertwined, self-reinforcing, and correlated trades and narratives (i.e. oil slumps and drags inflation down with it which prompts CBs to ratchet up accommodation which sinks banks which crushes general market sentiment and the overall price declines tighten financial market conditions and scares corporate execs and actual economic activity begins to deteriorate)."


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Here Is The Exchange That Left A Stunned Janet Yellen Looking Like A Deer In Headlights

"if you're not going to give me the documents, exert your privilege, tell me your legal authority, why you're not going to provide this to us."

 


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"Bloodbath" In Black Gold - Buffett's Phillips 66 Dumps Oil In Cushing, Crashes Crude Spreads To 5 Year Lows

The canary in the coalmine of an increasingly desperate energy industry just croaked. With "unusual timing" and at "distressed prices," Reuters reports that Phillips 66 - the major US refiner owned by Warren Buffett - dumped crude oil for immediate delivery into Cushing storage tonight. This sparked heavy selling of the front-month WTI contract (to a $26 handle) and crashed the 1st-2nd month spread to 5 year lows.


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Is The US Leading Saudi Arabia Down The Kuwaiti Invasion Road?

Saudi Arabia and Turkey are both pushed into a corner over the shifting power base in the Middle East. The paranoia and desperation, like Saddam in 1990, could very well cause both countries to commit to the very act of aggression which will lead to their ultimate demise and removal from a position of influence within the region. Are we on the verge of another war?


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This "Stunning" Chart Shows How Quickly Europe's Refugee Crisis Is Accelerating

Earlier today, we reported that European officials are considering a two year Schengen suspension to help stem the inexorable flow of Mid-East migrants into Western Europe. To understand just how acute the problem is, consider the following chart from The Washington Post which shows how many more asylum seekers fled to Europe from January 1 through February 7 of this year compared to the number arriving from January 1 to February 28 of 2015.


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Putin Uses the Refugee Crisis to Weaken Merkel

Putin’s continuing support to keep Assad in power has a direct correlation with Merkel’s weakening support at home. The longer the war in Syria endures, the weaker it could make Merkel. This has consequences for the rest of the EU. A weakened Merkel means a weakened, more divided Europe. The bloc will be in no shape to deal with the ever-mounting security challenges it faces, not least the ongoing political crisis in Ukraine, where on February 3 the economy minister resigned in disgust and frustration over corruption.


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Why Ron Paul Is Hopeful

We’re living in a time when people - especially young people - can see that the old ideas aren’t working any more. The young generation has inherited a mess from the older generations, and the young can see that what they’ve been told isn’t true. It’s not true that you can just go to college, run up a bunch of student debt, and then get a good job. The young can see that the middle class is being destroyed by our current economic system. And they can see that our foreign policy is failing. Whether we like it or not, change will come.


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Why Trump Thinks Unemployment Is 42%

"If we had 5% unemployment, do you think we'd have these gatherings?"


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"It's Probably Something" - Gold Surges Above $1200; USDJPY, Oil, Stocks Plunge

Hong Kong traders are back from vacation, and with few options on the table, they are buying the one asset that provides the best cover to central banks losing faith, demonstrated most vividly by the total failure of the BOJ, and as a result just as Yen soars above 113, gold has taken out the numerous $1,200 stops and is currently surging to levels not seen in almost a year.


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