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Counterparty Concerns Surge: US Bank Credit Risk At 11-Month Highs
Canary... meet coalmine. While the divergence between US financial stock prices and their credit risk has been significant since Fed's Bullard saved the world in mid October. In fact the divergence really began when oil prices peaked and began to accelerate lower but really picked up this week after the Swiss National Bank news. Between energy-sector-based structured notes, massive short Treasury positions, and the potential for contagion from Swissy's massive moves, it would appear - judging by the major decompression in US bank credit risk this week to its worst since Feb 2014 - that counterparty risk is on the rise again.
11-month highs in US bank credit risk
Of course, it took a while last time for stockholders to get the joke too...

[The US Financial Credit Index is a simple average of BofA, Citi, JPMorgan, Morgan Stanley, and Wells Fargo CDS]
Charts: Bloomberg
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Risk?.. whats that?
Each snowflake as innocent as the last, as they are all carried down the hill by the avalanche.
#41
Nonono no nonono.... Everything's OK. They fixed the system last time around. The regulators have everything under control. Everybody in the business knows that if they fuck up they'll get fired or at least loose their bonus and never ever get another job. The public is safe and knows it. Nobody is worried a bit.
So we won't get cornholed after all?
You won't get cornholed unless Pocahontas comes out of the light and sneaks back under your covers in the middle of darkness. Which is likely. But above all, nobody is worried a bit. Stawks are going up which means that this brouhahhacrapola about gloom and doom is way overdone. There are naught but isolated problems here or there that are all manageable. The Fed and Feds have done a fine fucking job at managing fiscal and monetary policies, regulations have become un-burdensome, the world is more at peace (well at least the dead and I'm not too fucking sure about them either) than it ever has been, the Messiah, the Black Messiah (Hooray) has led us from the darkness into the light, the Book of Revelations and negative consequences for anybody or anything has been abolished.
Plus, BoP, you wanted the bearded lady, so you get Hillary. Or more likely Mike ("Moochachos') The only difference between them is Mike might not shave his back.
DAX +3% in a day - WTF !!!
All ready to blast a MAJOR BULLISH BREAKAWAY GAP day on Monday
Not this monday, it's a holiday so mkts are closed.
They celebrate MLK day in Alabama?
nice one.
Whats this 'we' business?
First one out of the pool wins.
that would be the SNB
BFD, just BTFD.
Friday afternoon rally, what a shocker. Hope you are playing along. No Black Swan to see here.
A few more S&P Points in the next 10 minutes and all will be forgotten.
Next up, Fed Res passes torch to EU..... MORE QE!!!!!!!!!!!!!!!!!! Stocks to the Moon, Alice.
Is less more, or is it less? I cant remember.....
i think it is reversal graph from original , so less is bad.
And, its gone.
https://www.youtube.com/watch?v=-DT7bX-B1Mg
Gold. No counterparty.
"What's a counterparty?"
Average American citizen
When you get fucked up sitting at the kitchen counter. I mean, duh.
Didju bring the acid? Sandoz, yeah, the good stuff.
FUCK YOU LONDON, NEW YORK, MONEYCHANGERS, AND THE ENTIRE ANGLO-EUROPEAN, FRAUDULENT FRACTIONAL RESERVE CURRECY PARADIGM.....
"Today, the Shanghai Gold Exchange and the World Gold Council, the market development organisation for the gold industry, signed a ‘Memorandum of Understanding’ regarding a ‘Comprehensive Strategic Cooperation Agreement.’ The Shanghai Gold Exchange is the largest physical gold exchange worldwide and the World Gold Council is the global authority on the gold industry. Together, these two organisations are joining hands to support the development of both domestic and international gold trading in China by leveraging the opportunity provided by the internationalisation of the Chinese gold market, through the Shanghai Free Trade Zone, to support market expansion. The agreement will support the development of gold investment products and solutions for the industry and investors both regionally and globally.
On September 18, 2014, the International Board was officially initiated by the Shanghai Gold Exchange beginning the process of internationalising the Chinese gold market. The International Board allows international investors to use RMB to trade in precious metals and to use physical gold services such as storage, trusteeship, delivery, leasing and transit. By making these changes, the International Board is enabling greater interaction between China and the global gold markets.
Xu Luode, Chairman of the Shanghai Gold Exchange, stated at today’s signing ceremony:
“The launch of the International Board of the Shanghai Gold Exchange marks a significant transformation, not merely by further integrating with the global market, but also by laying a solid foundation to establish a new global market structure in the gold industry. While the China gold market will function as an essential pillar of the integrated multipolar world, the Shanghai Gold Exchange, the largest physical trading centre in the world, is also committed to the responsibility of servicing global investors. We firmly believe that the partnership with the World Gold Council will further improve the connection between China and the global gold industry, and we are eager to develop the international market, service global clients, share business opportunities and contribute to Chinese power together with the World Gold Council.”
Commenting on the partnership, Aram Shishmanian, CEO of the World Gold Council, stated:
“The growth of the Shanghai Gold Exchange into the world’s largest physical gold exchange provides compelling evidence that the future of gold is physical. As the market shifts from West to East, the expansion of strong gold trading hubs in Asia will improve price discovery, liquidity, transparency and efficiency, all of which will transform the landscape of the global gold market. As a major market, accounting for 30 percent of global capacity, this will enable China to take its rightful place in the world gold market. It is exciting to partner with the world’s leading gold exchange as it allows us to bring our global expertise and insights to this enormous gold market full of potential."
END
DEATH TO THE MONEYCHANGERS.
Yes, exactly, give them no quarter
Fine. Twenty dollars then.
But we're still talking dollars!
Gold is okay...but priced in DOLLARS.
Yup, the Chinese are clearly angling to step in with a gold-backed fiat float as the USD snuffs and everyone must make instant other arrangements. Confirming gold reserve quantity will be the sticking point, then we see who was swimming naked
I know that Australia is swimming naked, last I checked it had only $33 billion AUD of gold and it is stored in London, which is all kinds of wrong but a minimal hedge for this sudden eventuality I suppose.
So they're going to have to nationalize a big chunk of national gold production, which has been as big as China's or Russia's for a long time now, and even bigger at times, and tax the shit out of it as the USD carks or else the AUD won't be worth shit either except for the massive energy and mineral resources development potential, and rapidly expanding NET food production for export.
So I'd say Oz will be OK as this goes down, the banks will be fried and private debts written down or off though, which will result in an unreservedly good medium-term outlook.
But once nationalization processes begin in an emergency destabilization context, it may run for quite a distance, to create new infrastructure and military capacity to deal with the fall in US military power. Plus probably buy up new or nearly-new US DDGs, Super Hornets and drones plus lots of missiles very cheaply at that point as well.
Economic, financial and military coercion will become issue #1 at that point, until the system shakes out and finds a new relative dynamic 'level'. And the Alliance with the US and Japan plus 'Five-Powers' will be more important than ever at that point.
The question is, how much gold does the US really have? And how much can it produce fast, and Nationalize? And will the private debt be written down and the bad banks closed and paper burned? If that happens and mark to market returns the US is still going to be very strong after a couple of years of intervening mess.
I guess this will be the test to see how well Western and Chinese interests align, and if the Chinese are ready to make sure the world remains stable from here.
Global 'goldback' seems to be the logical way forward at this point - even if provisional or interim in nature and duration.
as rivets start popping out
Run. Do not walk.
That is a graph of exactly the right time to BTFD
Nah, to me it looks like a sell, then wait to buy its replacement on the up swing.
look at the fucking Dow...
fucking farcical.
Bob Pisani said near the close that everything had stabilized. ROFL.
hate that asshole...
Does he have an account on Grinder, too?
So... What exactly are we collectively expecting to happen next week then.
Say Mario says "Yes unlimited ECB QE" -- Euro/USD drops, USD goes up... SP500 reaction at that point?
more cheap money -more money go to stocks- stocks go up - you became more poor it's simple
So everyone here would agree then to buy some XIV for the week?
wtf??? you watched SNB actions in this weekend? Global economy crumbling, so risks are very high, no one will tell you what to do.
Im waiting for many bad things will happen after Greece elections.
I think many market assets will disappear in this year
If ECB goes QE the euro will flame out and the survivors would pile into dollar denominated assets - like NYSE stocks, treasuries, etc. But then, watch out, European collateral would become less valuable and margin calls would ensue, then its Sept. 2008 all over again. Yeah, I'd expect a stock spike and dive Greg Louganis would be proud of. Be careful out there.
this too, is bullish
the FAZmobile is outta gas
How you all bought the dip...QE coming next week.
And yet the machines go long for a three day weekend lol...
Buying panic now.
Some "yellow stuff" will fix that!...
And it's a helluva lot heavier than the steamy stuff that's the same color the banks have been marinating with these past 6 years!
Trouble is how do you get it back once you give it away for almost nothing?...
Only the Soros Knows!
"Today, traders and financial planners all over the world are being introduced to a new market buzzword: counterparty risk."
MSM
Plenty of time over long weekend to "fix" all this! In the land of "free" printed money, there are no risks!
Dive officer, set your depth to 800 meters.
But Cap'n Yell'n, we're presently at 700 meter and this boat is only rated at 500.
Fine, then set your depth to 850 meters!
lol [Counterparty Risks Surge], is Fed. Speak to European banking arms that have excess reserves parked at the Fed. that the "gravy train" has reached it's final destination.
Those leeches have been getting paid 15-25 basis points for using the Feds. *caugh *caugh U.S. taxpayers money, for over 6 YEARS!
The Fed is telling the ECB to print or get off the shitter. The U.S. trade deficite has tightened and the Fed. can't justify it's balance sheet with ZIRP policy paying Sovereign countries/banksters 25 basis points on U.S. taxpayer dollars.
i would like to believe you mr. yen cross. however, well i sort of do.
it's just the musical chairs though. the fed can do anything they want, and will continue to do so, the wealth transfer continues and i see no end in sight.
there will be no us lampposts. american people are too dumbed down to know.
the fed is telling the ecb to print now, as it is THEIR round. then us, the uk, then japan, then eu again.
they are just telling the to get their own people into the shitter, deeper again.
eu 'heads' still remember lampposts. people in italy are still alive when the piano strings were used. and they aren't vindicative. his children were allowed to live. dad did the dirty deeds, dad hung.
Disagree,
>$18 trillion public (just the federal govt)
Get excel out and make some assumptions and calculate how long it takes to pay that down, with realistic inflation guessimates and the very probable complete abscence of surpluses.
Now add state and local debt to your calculation for repay time and consider tax and infrastructure impacts on economic growth of revenue curtailed and interest accrued.
Either that debt number and the liability implications mean something real, or conversely, the USD will mean nothing at all.
And will be and is being seen in just those terms.
The printing is worse than irrelevant here, as it results in a NET negative, to perception, and to liability.
The total absence of any attempt to mark to market, combined with a sham calling itself a 'market', and the absence of real US government budgets.
It's a recipe for sudden global economic and financial ruin and other countries are marching out the door into other exchange mechanisms.
not to worry, we'll spend our way to prosperity!