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]