Tuesday, February 9, 2016

European Bank Bloodbath Crashes Bond, Stock Markets, Japan In Turmoil

European Bank Bloodbath Crashes Bond, Stock Markets, Japan In Turmoil

European markets crashed to near one and a half year lows on Monday as banking stocks across the continent, dogged by concerns about global growth and excessive lending, dragged markets from Britain to Italy deep into the red.

Global Markets Also Stunned By Biggest Japan Crash Since 2013

With China offline for the rest of the week
, global markets have found a new Asian bogeyman in the face of Japan which saw its markets crash, and the Yen soar, showing that less than 2 weeks after the BOJ unveiled NIRP, yet another central bank has lost control.

The Nikkei crashed 5.4%, the biggest drop since June 2013, plunging over 900 points to August 24 lows driven by collapsing bank stocks while the Yen soared to 114.50 overnight.

Aside from Japan, everyone is looking at the bank which may be "the next Lehman" last June, namely Germany's Deutsche Bank.

European banks have utterly imploded. We see rising evidence of weakness spreading in all the key regions.

European Sovereign Risk Soars As Bank Contagion Spreads

The ECB's "whatever it takes" ponzi strategy of keeping the dream alive in Europe's financial system has finally been seen for the lie it is and 
rapid collapse in the banking system is contagiously spreading to peripheral sovereigns once again.

The ECB is now cornered as any more NIRP will merely exacerbate the stress in the financial system and lead to a very vicious, very negative, feedback loop in sovereign risk.


Deutsche Bank stock crashed over 11% Monday (the most since July 2009) to its lowest since January 2009 record lows.

Deutsche Bank itself warned, any more easing by The ECB or BOJ will only hurt banks and certainly Deutsche. In other words, they are all officially trapped now.

Every Market In Europe Closed "On The Lows" on Monday

Fears over the European banking sector linger in markets this morning and European equity markets are down hard and equities in Japan fell hard and fast.

Last week stocks posted their worst weekly return in a month, driven by a selloff for tech stocks. Not a good start to February so far.

Global markets have lost $6 trillion since the start of 2016, now even more with the Monday's sell-off.

The benchmark 10-year Japanese government bond yield has fallen below zero for the first time ever. Last month the Bank of Japan stunned markets by adopting a negative interest rate.

Nothing is fixed and it's starting to become very obvious! Live by the overvaluation sword, die by the overvaluation sword.

Investors around the world are realizing that the jig is up... We're all going to suffer… Central Banks will panic and attempt another rescue but the market knows this is over and we're not going to play this game anymore.

Stocks got slammed on Monday (note: this is an improvement over the "absolutely destroyed" language originally warranted) with the Dow falling about 180 points, the S&P 500 losing more than 1.4%, and the Nasdaq falling by 1.8%.

U.S. stocks tumbled Monday morning to their lowest level in 22 months as a fresh drop in oil prices amid continuing fears of economic slowdown pushed investors to the perceived safety of government bonds and gold.

While stocks slumped, demand for so-called haven assets surged, pushing gold prices to a nearly four-month high.,

The Fed cannot expect to control the price of money with insane policy and not have the economy and markets suffer adverse consequences.

The U.S. spends over $600 bn. on the military in this country which compares to the top 10 countries spending on their military (including Russia, China, and the other top eight countries spending on the military). Governmental forces want to spend more than $1 tn. more on the pentagon while the left wing wants to spend much more on the domestic side of our economy. Both get their way, and the taxpayers get stuck with the bill as we borrow $1 million a minute to support this and other spending. The total debt of the county exceeds $100 tn. if you include unfunded liabilities and promised entitlements.  This debt is enormous relative to our $18 tn. economy. These numbers are the main reason our economy is growing so anemically.


Japan In Turmoil: Stocks, USDJPY, Bond Yields Collapse

The total and utter failure of The BoJ continues to accelerate...

JAPAN 10-YEAR GOVERNMENT BOND YIELD FALLS BELOW ZERO FIRST TIME



Stocks have crashed the most since Black Monday erasing all QQE2 gains..



With Japanese Bank stocks  leading the way, now down 25% since NIRP was unleashed (and 32% since the start of the year)...



And USDJPY is in freefall...



JAPAN 10-YEAR GOVERNMENT BOND YIELD FALLS TO ZERO FOR 1ST TIME

JAPAN'S 5-YEAR YIELD FALLS TO RECORD -0.205%



And stocks are crashing as USDJPY tumbles...

YEN CLIMBS PAST 115 PER DOLLAR TO STRONGEST SINCE 2014






The total and utter failure of The BoJ continues to accelerate...



Credit continues to crumble to 2009 levels and the QE3 overvaluation is being unwound...





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