"Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse. The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime."
The great weakness among economic analysts and many independent analysts is their refusal to examine the long game of the elites. The Brexit is part of a globalist long game that is designed to finally and completely demonize sovereignty movements. Think about it for a moment — what better way to remove the only obstacle in their path? The globalists create an economic crisis and then foster conditions by which their primary opponents (liberty activists) get BLAMED for it. They then swoop in as the heroes of their little cinema after the damage is already done and offer their solution: complete globalization. With enough people destitute from a global financial calamity, they may very well be begging the elites for help.
The largest U.S. banks got permission from regulators to return profits to investors, but the U.S. banking units of Deutsche Bank and Banco Santander were held back again as the Federal Reserve released the final results of its 2016 "stress tests."
"I think indeed the comparison does not apply because the reaction to Lehman as you may recall was that several markets froze... That was not the case this time."Actually... that's not exactly true is it!!
Soros Fund Management took a short position in Deutsche Bank AG of about 7 million shares, or a total notional of about $100 million, as turmoil from the U.K.’s decision to leave the European Union sent bank stocks lower. The position taken on Friday was equivalent to 0.51 percent of Deutsche Bank’s share capital, according to a German filing published on Monday. The document doesn’t show at which price the fund took the position.
"There's no escaping the fact that this is a class war. Whether its globalisation, immigration, inequality, poor economic growth or a combination of all of them it's quite clear from this and other anti-establishment movements that the status quo can't last in a democracy. Eventually you'll have a reaction. This is one such major reaction and given that the UK growth rate has been ok of late, it would be strange if pressure didn't continue to build elsewhere where growth has been lower for longer."
Traders are frantic this morning as George Osborne's calming words have done nothing to halt the carnage. From Italian bankscrashing over 25% to British banks being halted, trading at record lows, to Deutsche Bank extending its Lehman-esque trend, as one veteran stock market trader in London said, "it's a f##king bloodbath, not even Draghi can save this one." The contagion is spreading however as UK defaul risk has spiked to 3 year highs and USD liquidty needs are surging with funding markets seeing serious distress.
Things are going from bad to worse for the UK. "We’ve seen so many developments around Brexit over the weekend since the FTSE closed and things are now looking even more concerning," Angus Nicholson of IG Ltd., said. "It’s hard to have any idea about where fair value for the pound should be when you look at the fact that Scotland and Northern Ireland could no longer be part of the U.K. within the next year or two."
"...that’s credit bubble thinking. Banks are dominant forces in an economy only when that economy is creating an unhealthy amount of credit. When the process exhausts itself the banks tank, and terrified capital flows back into “primitive” safe havens. Like Friday..."
"The global economy cannot afford to rely any longer on the debt-fuelled growth model that has brought it to the current juncture... The world has been haunted by an inability to restrain financial booms that, once gone wrong, cause long-lasting damage... We need policies that we will not once again regret when the future becomes today."
Brexit is a Bear Stearns moment, not a Lehman moment. That’s not to diminish what’s happening (markets felt like death in March, 2008), but this isn’t the event to make you run for the hills. Why not? Because it doesn’t directly crater the global currency system. It’s not too big of a shock for the central banks to control. It’s not a Humpty Dumpty event, where all the Fed’s horses and all the Fed’s men can’t glue the eggshell back together. But it is an event that forces investors to wake up and prepare their portfolios for the very real systemic risks ahead.