Global Systemic Risk At 3 Month Highs

Tyler Durden's picture

In a little over a month, the risk of the 30 most systemically important global banks has jumped an impressive 45%. At 235bps, the FSB30 stands just shy of the peak levels that were seen in the initial March 2009 crisis moment - though remains below Q4 2011 peak crisis levels. Perhaps, despite all the protestations of 'zee stabilitee', self-sustaining record-profit-margin-driven recovery, and Chinese soft-landing, the vicious circles of austerity in Europe (and perhaps the US) and financials squandering their newly-found liquidity (and certainly not capital) is becoming too large to ignore?

What is intriguing is how absolutely end-of-the-world the situation felt heading into Q1 2009 and yet - with banks' risk considerably higher now, we have become so much more 'used' to this state of chaos that our anchoring bias says - all is well?

Chart: Capital Context

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Clueless Economist's picture

Ahhh...sweet little innocent Maria Bartiromo is purring on my TV saying, "Stocks are well off there lows of the day, and poised to go higher as earnings beat expectations"

Ted Baker's picture


Everybodys All American's picture

she is not that innocent or naive for that matter.  CNBC is part of the system/problem that will have to be fixed.

Troll Magnet's picture

aw, come on!  nbc is owned by GE.  remember their commercials?  

Gee-Eee, We Bring Good Things to Life~!

it's gotta be true because they said so.  on TV!  

TheGardener's picture

"Gee-Eee, We Bring Good Things to Life"

..that was just a play on Lucky Goldstar, or the other way round , LG made them look and act corny..

LongSoupLine's picture



She is a virus...or is it full of viruses?

Conman's picture

Don't fight the PPT, they got an infinite toner supply.

Rip van Wrinkle's picture

Maria....dear....earnings ALWAYS beat expectations. Haven't you heard??

ACP's picture

Absolutely right...all corporations make their Better Than Reduced Expectations (BTRE) earnings nowadays.

Excellent! Party on dudes!

francis_sawyer's picture

In similar news, today I just beat my all time high jump record (by burying the bar one mile underground)...

I'll be in London for the Olympics this summer if you want to see me in action...

Dr. Engali's picture

Business intelligence like no other. At least that's what they tell me in their commercial breaks.

buzzsaw99's picture

Not possible for systemic problems because big banks never take a loss.

geewhiz190's picture

how is this chart calculated? seriously-how is it calculated? anyone?

Seize Mars's picture

I believe it is an index of credit default swap spreads of certain banks. So it means that the spread above risk-free is some number of basis points. A basis point is 1/100th of a percent. For example if there is a spread of 173bp it means 1.74% above risk free.


TheSilverJournal's picture

The difference is that before 2008, the world wasn't sure that trillions upon trillions would be thrown into the banking system to keep it from imploding. Now, everyone expects that the system will be maintained no matter the cost.

Do you here that? smells like hyperinflation.


sunaJ's picture

Water seems fine to me.

                              - frog

Soul Train's picture

amazing chart - well done.

YesWeKahn's picture

Because Bernanke promised to print another infinit amount of paper money.

JW n FL's picture



Egypt to stop gas export to Israel


Punk Economics: Lesson 1


Dutch PM resigns after failed austerity talks


JW n FL's picture



                                                              Joke of the DAY!!

                                           China's Slowdown Was Intentional, Spencer Says     




Owned and Operated!

My Life and Your Life on FILM!

Vince Clortho's picture

Global Systemic Crisis  ?!!!

This is a job for Suber Nanke.

Paging the Bearded Crusader!


ps:  bring lotsa toner.

JW n FL's picture



MF Global Customers Press J.P. Morgan for Funds

ArrestBobRubin's picture

France may have a new Joan D'arc in the battle against Anglo/Israeli/American financial domnation...

France, ya want any kind of a future? I mean aside from the soon-to-be King Of The PFIGS under monsieur Hollande??? 

Then here's your only choice mon amis: Marine Le Pen. Cut loose the banksters AND the socialists and Vive La France!

Le Pen shocks France as far right hits historic heights Far-right National Front candidate Marine Le Pen obtained a surprising 18% of the vote in the first-round of France’s presidential election Sunday night.
adr's picture

Have no fear the PPT is here!!!!!

Somebody stepped in today to plug the hole in the dam. Oil made a dramatic comeback and the market is down less than 1%.

Once again you can't fight the Fed. When there isn't a buyer left Bernanke steps in with his banker buddies and they prop up the market with more cash borrowed from future generations.

Every baby born is going to be handed a bill along with their birth certificate. On the day of your birth you owe the USA $1 billion. Wages will be garnished forever, actually you just belong to us.

geewhiz190's picture

the S&P was quite a bit higher on 11/25 than 10/04. both were short term buy points

junkyardjack's picture

You know what else is up 45%, Facebook's revenue. Bullish...

NotApplicable's picture

What is intriguing is how absolutely end-of-the-world the situation felt heading into Q1 2009 and yet - with banks' risk considerably higher now, we have become so much more 'used' to this state of chaos that our anchoring bias says - all is well?

El-Erian's famed "new normal."

A.k.a. "you'll get over it."

Fix It Again Timmy's picture

The western world is run by bozos.  At one time, they were smart, clever and resourceful; however, things are getting out of hand - intelligence and resourcefulness are kinda powerless.  A smart man and an imbecile jumping out of a burning high-rise will turn out the same way - dead!

hangman's picture

Although everyone is entitled to their opinions (greatness of our country-our rights bestowed upon by our forefathers), others and our own, times after time, underestimating our ability to overcome obstcles and challenges, man-made or not, is misplaced.

However, while we are distracted, Chinese-Russian War Games goes on under the radar in the Pacific theater-while our media is preoccupied with some soccer ball a washed up in Alaskan shores from Japan.  If we don't pay attention, it will be more than a soccer ball that will be washing up on our shores from Korea-Japan Pacific theater.

But then, as I observed before, a large war is one sure way to get our umemployment rate down quickly, move jobs from China to our shores and turn IOU to UOM (you owe me).


bullmkt's picture

he always brings up this FSB systemic crap when his shorts are not performing.

Today market nearly :"crashed",merely less than 1% correction.half than in EURUSD with all the negativity

hitting Europe.Yes,edge of the cliff LOL!

monopoly's picture

We are just whistling past the grave yard. But not for much longer. 

Ayr Rand's picture

Wait... if risk is at all time highs, why is VIX near all-time lows? 

Simple, it's my friend Manny. Manny P Elation. 

cannotbearit's picture

Is this index published anywhere online on a regular basis?