European Banks Crash For 4th Straight Week

[Rizla2345]

Even with today's 3% surge - the most in a month - on the heels of Unicredit's CEO proclaiming that EU banks are "intensely" looking for fundin solutions, European banking stocks have collapsed for a 4th straight week for the worst losses since 2012.





Following the brief exuberance after Draghi unleashed his latest bazooka - which it seems was all front-run - European banking stocks have collapsed almost 20% - the biggest loss since April 2012.

http://www.zerohedge.com/news/2016-04-08/european-banks-crash-4th-straight-week

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[yenxz]

Even with today's 3% surge - the most in a month - on the heels of Unicredit's CEO proclaiming that EU banks are "intensely" looking for fundin solutions, European banking stocks have collapsed for a 4th straight week for the worst losses since 2012.





Following the brief exuberance after Draghi unleashed his latest bazooka - which it seems was all front-run - European banking stocks have collapsed almost 20% - the biggest loss since April 2012.

http://www.zerohedge.com/news/2016-04-08/european-banks-crash-4th-straight-week

European banking stocks have collapsed for a 4th straight week for the worst losses since 2012

give us the source that this is really happen,and i can't believe that Europan banks can crash like this,since 4 years, is this one of many effect of bitcoin? tell me something

[Rizla2345]

It's not only German banks (DB and its 10x EU's GDP derivatives exposure) http://independenttrader.org/deutsche-bank-on-the-brink-of-bankruptcy.html but also Italian banks (Banco Popolare and Banco Popolare Di Milano) are going down. Draghi may be busy printing money to bail out 2.0 but helicopter money can prevent riots - maybe. http://independenttrader.org/the-most-important-events-of-march-2016.html#comment-93

[BitsandBites]

Europe got a little crisis going on. The problem is Brexit. If it proceeds. EU banks need to sell their Uk stocks/holding by law.
Which makes the whole european market unstable to say the least.

[Rizla2345]

Europe got a little crisis going on. The problem is Brexit. If it proceeds. EU banks need to sell their Uk stocks/holding by law.
Which makes the whole european market unstable to say the least.

It´s a fantasyland. I think that by now about 40% of government bonds within the EU have negative yield. The European central bank has bid up the prices of 10 yr. Italian bonds so much that their yield is lower than those of Singapore!

Italy hasn’t had a balanced budget since the nineties. Debt-to-GDP - 132%.

Singapore, does not have any net debt (is balanced within the budget). The country systematically produces a surplus of budget revenue and the GDP growth is at 6.5%.

That´s central intervention for you. How long that will work before it loses control and the real market takes charge is anybody´s guess. Until that happens the already way over indebted overspenders can borrow even more.

[Yakamoto]

Europe got a little crisis going on. The problem is Brexit. If it proceeds. EU banks need to sell their Uk stocks/holding by law.
Which makes the whole european market unstable to say the least.

It´s a fantasyland. I think that by now about 40% of government bonds within the EU have negative yield. The European central bank has bid up the prices of 10 yr. Italian bonds so much that their yield is lower than those of Singapore!

Italy hasn’t had a balanced budget since the nineties. Debt-to-GDP - 132%.

Singapore, does not have any net debt (is balanced within the budget). The country systematically produces a surplus of budget revenue and the GDP growth is at 6.5%.

That´s central intervention for you. How long that will work before it loses control and the real market takes charge is anybody´s guess. Until that happens the already way over indebted overspenders can borrow even more.

Everyone is going to aim to keep the gravy train rolling, as long as everything hasn't crashed, more and more people are going to aim to keep the system rolling.

The more currency there is available, the less their debt is valued, and the sooner they can pay it off, right? /s

[Rizla2345]

Europe got a little crisis going on. The problem is Brexit. If it proceeds. EU banks need to sell their Uk stocks/holding by law.
Which makes the whole european market unstable to say the least.

It´s a fantasyland. I think that by now about 40% of government bonds within the EU have negative yield. The European central bank has bid up the prices of 10 yr. Italian bonds so much that their yield is lower than those of Singapore!

Italy hasn’t had a balanced budget since the nineties. Debt-to-GDP - 132%.

Singapore, does not have any net debt (is balanced within the budget). The country systematically produces a surplus of budget revenue and the GDP growth is at 6.5%.

That´s central intervention for you. How long that will work before it loses control and the real market takes charge is anybody´s guess. Until that happens the already way over indebted overspenders can borrow even more.

Everyone is going to aim to keep the gravy train rolling, as long as everything hasn't crashed, more and more people are going to aim to keep the system rolling.

The more currency there is available, the less their debt is valued, and the sooner they can pay it off, right? /s

Bond price and yield move in opposite directions. The higher the price the lower the yield and vice versa. Which is why those yields are very close to zero or even negative. It´s central banks buying bonds. In a so called capitalistic system you have in effect central control of interest rates. If hypothetically, this control were totally relinquished next week everybody would rush to sell this way overbought bond mess, interest rates would skyrocket as a result and the whole financial system would implode.

[Pab]

EU banks are crashing in silence untill some time whan it will explode
Not only German but itaian,spanish,french very much,dutch
thay are all related,but if will brexit will be euroexit also
Euro currency has to fail EU needs reforms all will crash

[Rizla2345]

During a leisurely stroll around Germany, one may encounter many strange sights but nothing would stranger than the following ad (courtesy of Peter Barkow) which promises negative 1% interest rates for consumer loans up to 24 months.

Here is the quick and dirty: take out a loan and pay 1% less.

For the fine print we go to Santander Consumer Bank AG, which has this to which has this to say about this self-amortizing (if only in the beginning) loan....

http://www.zerohedge.com/news/2016-04-09/meanwhile-germany-unexpected-ad-appears

[funkenstein]

First of all, all fiat currency is issued at an effective interest rate of negative infinity:

http://frass.woodcoin.org/negative-interest-rates/

Second of all, "oh no these banks are in trouble" is hardly going to bat an eyelash today.  Many of these institutions have ways of issuing currency.  The only thing they are worried about (and this not very worried) is that there might be one or two thinking people who would refuse to accept their paper as valuable.  But this is Europe after all.  Nobody thinks.  The Euro is money. 

[Rizla2345]

I guess when interest rates are turning negative and bank stocks are crashing that is probably decent clues that the system is starting to get a bit wobbly.

[Rizla2345]

There was a time when the German chancellor and the head of the European Central Bank had nice things to say about each other. Mario Draghi spoke of a "good working relationship," while Angela Merkel noted "broad agreement." Draghi, said Merkel, is extremely supportive "when it comes to European competitiveness."

These days, though, meetings between the two most powerful politicians in the euro zone are often no different than their face-to-face at the most recent summit in Brussels. She observed that his forced policy of cheap money is endangering the business model of Germany's Sparkassen savings banks and retirement insurance companies. He snarled back that the sectors would simply have to adapt, just as the American financial sector has.

This is nothing new: we have been hearing laments by Europe's biggest bank, Germany's Deutsche Bank, that the ECB has gone too far for over two months now (initially in "A Wounded Deutsche Bank Lashes Out At Central Bankers: Stop Easing, You Are Crushing Us"). But for Merkel to take her feud in the open, and seeking to once again freeze relations between Germany and the ECB at this fragile juncture for the future of Europe, when Draghi has once again failed to stimulate inflation, when he has crushed European banks, but at least has unleashed a massive debt issuance spree, is troubling.

Spiegel has much more:

The alienation between Germany and the ECB has reached a new level. Back in deutsche mark times, Europeans often joked that the Germans "may not believe in God, but they believe in the Bundesbank," as Germany's central bank is called. Today, though, when it comes to relations between the ECB and the German population, people are more likely to speak of "parallel universes."

The reason for German anger: rates....read more

http://www.zerohedge.com/news/2016-04-09/people-germany-arent-stupid-germany-takes-aim-ecb-spiegel

[botany]

Banks are just a reflection of the overall economy.
If the outlook for the overall economy is bad, banks can't be expected to do much better. 

[tobacco123]

Not only banks in Europe is performing badly. Those in Asia are also not doing well. I guess this is a global crisis.

[stan.distortion]

Not only banks in Europe is performing badly. Those in Asia are also not doing well. I guess this is a global crisis.

Things not looking good there either? Some have the sense to build lifeboats from something more durable than paper though, saw this earlier and was very surprised:
http://anonhq.com/game-changer-china-set-start-yuan-based-gold-price-fix-april-2016/

[malzahar]

Sounds about right though..

Arent we still feeling the after effects after the financial crisis in 2008? they said something about a minimum of 5-6 years to recover?

[richardsNY]

Sounds about right though..

Arent we still feeling the after effects after the financial crisis in 2008? they said something about a minimum of 5-6 years to recover?

I don't think these are after effects of anything. It looks more like there is another deep crisis coming our way. Not sure when we will feel the heavy impact of this, but I'm fairly sure it won't take longer than 2 years before it will hit the markets. It will be interesting to see what kind of (positive?) impact it will have on the price of Bitcoin by that time.

[galdur]

Japan Desperately Needs a Stronger Dollar, China Desperately Wants a Weaker Dollar: The Fed Can't Please Both

April 7, 2016

The FX market is about to blow up in the Fed's face, and there's nothing they can do about it.
Foreign exchange (FX) is a zero-sum game: if one currency weakens, another must strengthen. Since the value of a currency is relative to other currencies, all currencies can't weaken together: at least one currency must strengthen as others weaken.

That one strengthening currency has been the U.S. dollar (USD) since mid-2014. The USD has strengthened by 20%, while the Japanese yen and the euro weakened by 20%. Many developing-economy currencies (rand, peso, real, etc.) have fallen off a cliff, suffering 40% to 50% (or even more) declines against the U.S. dollar.
Why does any of this matter? Simply put, the stock market is a monkey on a leash held by central banks--just give the leash a little tug, and the monkey jumps. Bonds are a gorilla--harder to control, but still manageable--but foreign exchange is King Kong, trading $5 trillion a day and impossible to control beyond short-term manipulations.

Currencies set the underlying trend, not just for bonds and stocks, but for entire economies. A weakening currency makes a nation's exports cheaper in other countries, and the theory is that expanding exports will boost the overall economy--especially if that economy is stagnating or in recession.

A weakening currency also makes imports more expensive in the domestic economy, pushing inflation higher--precisely what every central bank in the world desires, on the theory that inflation will make people spend more (since their money is losing value) and reduce the costs of borrowing (which is presumed to stimulate more borrowing and spending).

This is why everybody seems to want a weaker currency. But as noted above, every currency can't go down; if some weaken, others have to strengthen.

Which brings us to the current brewing crisis: beneath the propaganda that all is well in the world, the soaring dollar has destabilized the global economy in subtle ways: carry trades have been thrown over, capital flows have reversed, commodities priced in dollars have tanked, and so on.

The typical econo-pundit has welcomed the recent weakening of the USD, a reversal of the strong-USD trend:

Read more:

http://www.oftwominds.com/blogapr16/yen-yuan-USD4-16.html

[7788bitcoin]

Maybe the bank in US is also crashing...

http://www.theglobeandmail.com/report-on-business/international-business/us-business/us-banks-dismal-first-quarter-may-spell-trouble-for-2016/article29580566/

[botany]

Not only banks in Europe is performing badly. Those in Asia are also not doing well. I guess this is a global crisis.

Things not looking good there either? Some have the sense to build lifeboats from something more durable than paper though, saw this earlier and was very surprised:
http://anonhq.com/game-changer-china-set-start-yuan-based-gold-price-fix-april-2016/

This could indeed be a game changer. If China does implement a gold fix, it will lose some flexibility with respect to its currency. I am not sure if that will be what it wants. Cheaper yuan is required for the exports that power its economy.