"A perfect storm of slow or zero Italian economic growth, low interest rates and politically connected, often corrupt, lending have combined to create a situation where the Italian financial system is in need of a large rescue."
The banking crisis of 2008 never fully healed. It just got shuffled under the carpet while the public was fed a phony narrative that everything is fantastic. This turned out to be a gigantic farce; many of the world’s banking systems are just as risky as they were back in 2008.
It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed. But, if the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful.
Only one question matters for global investors - Where is the helicopter? Helicopter money will be raining from the skies in Japan, the Eurozone, the UK and even in the USA. This form of reflation will likely work and in due course work too much. Few things are binary in investment, but this huge decision to be taken in Berlin is the biggest binary event for investors this analyst has yet come across.
"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!!
Brexit — the second major landslide in the Year of the Epocalypse — has bankers all over the world scrambling to pick up and prop up their crumbled facades this week. This is one more jolt in the developing global economic collapse that I predicted for 2016.
With knife-catching "value" investors proclaiming yesterday that any dip today would be an opportunity, it appears once again that faced with the reality of Brexit blowback, no one (not even the central banks) are buying the f##king dip). As Bloomberg's Mark Cudmore exclaims "Don't be a hero," to those value-investors, warning that "most of the market is still in denial."
Central bankers should not be treated as wise oracles whose guidance is desperately needed. Instead, we should throw off the tyranny of the PhD’s and embrace the decentralization of power that is desperately needed to allow civilization to thrive. Brexit would be a great way to start.
England’s upcoming vote on June 23rd may be the first of several votes that reveal the deep flaws embedded in the European Union. In particular, Europe’s undercapitalized and overleveraged banks are dangerously exposed to rising political unrest.
They made their way in dribs and drabs. Hundreds of displaced bankers, shuffling up Suffolk Lane to All Bar One and along Upper Thames Street toward the Folly, the only pubs in the City of London open that early on an overcast Tuesday morning. One group of traders was threatened with dismissal after being caught on closed-circuit TV stealing candy from a vending machine.The shell-shocked men and women sipping pints and consoling each other had become part of a growing population. Faced with a toxic blend of zero-interest rates, stiffer capital requirements and a collapse in trading revenue, banks have announced large cuts to their European operations in recent months.