• Gold Money
    05/26/2016 - 14:27
    Here’s a question that might have you pondering: Is gold a commodity? More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly...

Global Financial System Risk Is Soaring Worldwide

Tyler Durden's picture




 

We warned earlier in the week that the credit risk of the world's financial institutions were on the rise and that trend has worsened as the week ends.

 

Global Bank Risk is spiking...

 

European Bank Risk is blowing out in Core and Peripheral nations...

 

And China Bank credit risk has broken to new cycle highs..

 

Some idiocysncratic names to keep an eye on...

Deutsche Bank - Europe's largest derivatives exposure (and thus epicenter of collapse should things turn out as bad as the bank's CoCos suggest) - is suffering seriously... It is becomeing very clear that banks are buying protection on DB to hedge their counterparty exposure...

 

ICBC Bank is among China's largest banks (depending on the volatility of the day) and as China bank risk soars so China's sovereign risk is soaring too with devaluation and systemic crisis co-priced into these contracts...

 

National Commercial Bank - the largest Saudi bank and proxy for The Kingdom's wealth - is seeing its credit risk explode. As one analyst noted, if NCB has a crisis then Saudi military adevnturism is in grave jeaopardy...

 

And finally - yes it is spilling over to American banks and their "fortress" balance sheets...

 

But apart from that "storm in a teacup" - Buy The F**king Dip, right?

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Fri, 02/05/2016 - 16:54 | 7146739 falak pema
falak pema's picture

Banks and Banco at the roulette!

Fri, 02/05/2016 - 17:09 | 7146847 thesonandheir
thesonandheir's picture

Good job we broke up all these TBTF banks after the near miss in 2008 eh?

Fri, 02/05/2016 - 17:19 | 7146901 knukles
knukles's picture

Seriously.
Every last single metric (size, concentration, cap adequacy, derivatives, you name it) has gotten worse, not better.
The Banks right now are the Elephants In The Room

Mark my words, there is a world of hurt in the offing.
Shitstorms?
Ya'll ain't seen nuffin' yet.

BTW, most of us old timers, and i mean by metrics like Medicare cards, aches and pains, etc., understand serious fucking bear markets.  Most folks (newbies today) have no clue.

required reading:

https://www.youtube.com/watch?v=q4iDurCE3Yk

Fri, 02/05/2016 - 18:27 | 7147145 Nobody For President
Nobody For President's picture

Yep, when I was 15 my rich uncle (everyone should have a rich uncle) gave me Engel's classic 'How to buy stocks', and as a poor logger kid, I figured that was the coolest way to get rich without breaking a sweat ever.

Started following the market right then - 1954. 

College, army, and I started buying stocks in 1964 and made sure they all had DRIP plans. Reinvested every dividend for the next thirty years. Got wealthy slowly, just like Engel preached. Fundamentals, follow but don't sell unless you have a real reason to, all that old stuff that actually worked in the '60s through the '80s.  Rode out some bear markets, paid attention to the portfolio once a week if that - bought and hold.

Ahh - the good old days before HFTs, direct Fed intervention, and all the shit over the last 15 years, and especially since 2007-09.

Kids, listen to Uncle Knucks - I have never seen a greater potential for a total shitstorm than what has been shaping up the last two years. I'm gonna be putting in a bigger garden this year than ever before, and tomorrow, start pruning the fruit trees for spring...

Fri, 02/05/2016 - 22:57 | 7148110 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

The Bear Raid happened March 10th 2008 @ 11:00am Bear Stearns time New York shitty, man. Since that juncture the entire Worldwide economy has been completely destroyed, but Hank Paulson, and Timmy Geithner et al, propped it up until all the Crony Capitalists could vacate their positions in the markets. The Controlled Demolition of the entirety of Global Economics is nearing completion as the Central Bankers withdrew QE to Infinity & Beyond, and pretended to up the Interest Rate by a token of gesture in a possible direction. The CB Oligarchs are not immediately introducing QE Infinty & Beyond because this Controlled Demolition is being facilitated by their inaction either way. They will not admit any sort of defeat in the face of defeat, and the CB is just standing here smiling at the World whilst the years of malivestment Mountain come toppling down in a literal earthquake like avalanche of Quadrillions of dollars in debt that will suffocate all existence when the dust settles.

 

This is why you always see Ben Bernanke smiling in photos.

Fri, 02/05/2016 - 16:55 | 7146744 franzpick
franzpick's picture

Debtors will be getting sorer as this collapses.

Fri, 02/05/2016 - 17:49 | 7147036 El Dorado
El Dorado's picture

Or they'll receive more easing from Mr. Yellen and we still won't learn our lesson for one more cycle. I can't imagine how big of a housing bubble will get if we start experimenting with negative rates...

Fri, 02/05/2016 - 16:56 | 7146752 Strelnikov
Strelnikov's picture

Bullish!

Fri, 02/05/2016 - 17:01 | 7146785 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

Transitory!

Fri, 02/05/2016 - 16:59 | 7146766 ebworthen
ebworthen's picture

"Not since Lehman..."

Cramer:  "Bear Stearns if fine!"

Fri, 02/05/2016 - 16:59 | 7146769 ParkAveFlasher
ParkAveFlasher's picture

Gold. bitchez!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Fri, 02/05/2016 - 17:22 | 7146916 brushhog
brushhog's picture

The thing that makes me shy away from buying anymore gold is the buy-sell spread. We have to buy at 5% over spot...and sell at 5% under so the moment you buy gold you are down 10%. And then of course the government taxes gold gains at a higher 'collectible' rate. I love the idea of gold but there's not many investments which you buy and lose 10% right from the beginning. Not only that but all the gold price suppression has been very successful and manipulating the price. So if they can do that, what kind of safe hedge is gold, anyway?

Fri, 02/05/2016 - 17:28 | 7146945 Dr. Engali
Dr. Engali's picture

The problem is you're buying gold for all the wrong reasons. Its insurance against a monetary mistake , not an investment and definitely not a trading vehicle.

Fri, 02/05/2016 - 17:32 | 7146973 bshirley1968
bshirley1968's picture

First of all, the percentages you are fretting over are miniscule BS.  Second, if you are paying the government taxes on gold......you are an idiot.  Drop the "investment" meme crap.  Gold is NOT an investment, it IS a measure of wealth, it iS a store of value, it IS real money, it is NOT printable.  Get onboard or get run over.  Your choice.

 

Fri, 02/05/2016 - 16:59 | 7146770 RiverRoad
RiverRoad's picture

GOLD bitches/bastards...the whole lot of you!

Fri, 02/05/2016 - 17:00 | 7146774 Pareto
Pareto's picture

OT : Note the VIX.  Hardly moving.  Seems like a long sell-off as opposed to a short sell-off.  Am I wrong?

Fri, 02/05/2016 - 17:03 | 7146801 qweston content
qweston content's picture

I hope it burns

Fri, 02/05/2016 - 17:05 | 7146818 Kilgore Trout
Kilgore Trout's picture

A plague of Global SIFIs on all financials.

Fri, 02/05/2016 - 17:06 | 7146828 Stormtrooper
Stormtrooper's picture

Good weekend to vacuum pack some flour and beans, say 1000 pounds each.

Fri, 02/05/2016 - 17:07 | 7146834 apberusdisvet
apberusdisvet's picture

Hillary doesn't have enough holes for the big swinging bankster dicks.

Fri, 02/05/2016 - 17:13 | 7146854 john_connor
john_connor's picture

Every US bank is buying CDS on all other banks because all derivatives will paid in full by US taxpayer

http://www.zerohedge.com/news/2014-12-12/presenting-303-trillion-derivat...

Fri, 02/05/2016 - 17:14 | 7146880 surfvin
surfvin's picture

This demands an emergency rate hike!

Fri, 02/05/2016 - 17:21 | 7146910 kiwimail
kiwimail's picture

Wish I could invest in something that has no counter party risk. Oh, wait----

Fri, 02/05/2016 - 17:24 | 7146927 brushhog
brushhog's picture

Systemic risk has been there a long time, only now is it becoming measurable with conventional methods.

Fri, 02/05/2016 - 17:35 | 7146985 Insurrexion
Insurrexion's picture

 

I just read this...Global Credit Bomb...on the way.

https://www.linkedin.com/pulse/global-credit-risk-john-m-cunningham?publ...

Fri, 02/05/2016 - 17:53 | 7147050 Bill of Rights
Bill of Rights's picture

The 10 dollar a barrel oil tax will fix this... Stupid cunt...

Fri, 02/05/2016 - 17:54 | 7147055 R.R.Raskolnikov
R.R.Raskolnikov's picture

The IMF got it under control. Do not worry. Be a good citizin and buy those stocks.

Fri, 02/05/2016 - 18:32 | 7147191 thesonandheir
thesonandheir's picture

Hehe the old IMF backup plan, if you didn't like our mass printed dollars try our brand new mass printed SDR instead!

Fri, 02/05/2016 - 20:53 | 7147649 kelley805
kelley805's picture

J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.

Here are some signs of a coming recession.

1. U.S. distress ratio started 2016 at 29.6%, the highest since July 2009.

http://www.marketwatch.com/story/oil-price-slump-sends-us-distress-ratio-to-heights-not-seen-since-great-recession-2016-01-26?mod=MW_story_recommended_default&Link=obnetwork

2.  Orders for durable goods fell a seasonally adjusted 5.1% in December 2015.

http://www.marketwatch.com/story/durable-goods-orders-decline-could-mean-economy-shrank-in-fourth-quarter-2016-01-28?dist=tbeforebell

3.  Investors in high-yield bonds are expecting to see their first negative return since 2008.

http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell

4. Default risk spikes

http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high

5. Iron ore prices tumble

http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30

6. Baltic dry shipping index lowest ever

http://www.zerohedge.com/news/2016-02-04/worlds-biggest-containership-hard-aground-baltic-dry-crashes-below-300-first-time-ev#comment-7142125

 

Here is how to prepare.

http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/

 

Here is how to get your mind off this stuff.

http://michaelekelley.com/category/humor/

 

Good luck!

Mon, 02/08/2016 - 00:44 | 7154660 DIGrif
DIGrif's picture

Pumping your own blog on here is pretty low.

Sat, 02/06/2016 - 20:30 | 7150943 MEAN BUSINESS
MEAN BUSINESS's picture

global SIFI / charts. Are there versions available that go back on a longer timeline? Who produces them? Thanks.

Sun, 02/07/2016 - 11:06 | 7152094 dimwitted economist
dimwitted economist's picture

Listening to that Crazy Peter Schiff right now..

Do NOT follow this link or you will be banned from the site!