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Credit markets, stock markets, death cross and Brexodus
Yesterday, I saw a headline about how the economy was doing so well because bank earnings were up.
April Bank Of America Earnings Jump 51% In Q1; Stock Setting Up
Bank of America hauls in biggest profit ever - CNN Money
OK, that all sounds good. The cheerleaders are hard at work. What is the reality?
June Banks just posted the longest losing streak ever, and it could get a lot worse
https://www.cnbc.com/2018/06/27/bank...get-worse.html
"Financials just extended their losing streak into a 13th straight session, a record for the sector.
The XLF financial ETF's sell-off has caused major technical damage to the charts, according to Matt Maley, equity strategist at Miller Tabak.
“Look at that XLF, it’s broken some key support levels,”
“It’s also broken below its 200-day moving average which has given it good support all year this year ,and now it’s broken slightly below the bottom end of its lows for this year,”
more runs to the Treasurys and more flattening of the yield curve,” Schlossberg said on Wednesday’s “Trading Nation.” “All these dynamics are kind of like a toxic brew for the financials.”
The yield curve, which measures the difference between short-term and long-term bond yields, is now at its flattest level since August 2007. The flatter the yield curve, the tighter a bank’s net interest margin, which exacts more pressure on its profitability."
The banks can't make money when the yield curve is flattened.
6/30 Yield curve still flattening relentlessly – Financial Sense
6/30 European yield curve collapses on report ECB considering operation twist – CNBC
6/30 China’s “debt trap” is even worse than we thought – Quartz
The impossible trinity is eating them up.
6/30 Canada makes retaliatory tariffs official: ‘We will not back down’ – CNBC
Canadian and Alaskan railroads are well known for killing a couple hundred moose every year. The moose will never get off the tracks when a train is coming.
6/30 Chinese stocks in bear market, on pace for worst year since 2011 – CNBC
That's what happens when your customers go broke.
6/30 Emerging markets are in a death cross, with another big drop ahead – CNBC
https://www.cnbc.com/2018/06/29/emer...re-losses.html
China will devalue their currency and cause a drop in American markets of at least 10--12%. As the dollar "gets stronger", the EM debt will be that much harder to service.
6/30 Debt for US corporations tops $6 trillion – CNBC
YES, and as interest rates rise, this debt won't be serviced.
6/30 Buy bitcoin or gold for the end of the liquidity party? – Goldcore
Unless you have a lot of money, hold paper U.S. dollars.
6/30 US saving rate continues to contract – Zero Hedge
So, we aren't putting money in the banks AND, the flattening of the yield curve is killing their profits. Armstrong makes it very clear that the banks will be closing.
6/30 Danes see record low bank deposit rates – Bloomberg
I wonder why??
"Danish households clocked in at 123.6% of household debt to GDP. These figures from the Bank for International Settlement, gathered up by Trading Economics, cover the period through Q2 2016. So Australians, who were essentially neck-to-neck at the time with the Danes, might have surpassed them by now. But that stunning level of 123.6% of GDP is good for 2nd place, though it's down from 140% just before the Financial Crisis (via Trading "
"And here is Number 1, the most glorious debt slaves of all, the country whose central bank is trying to manipulate down its currency by imposing steeply negative interest rates: Switzerland. "
Look at this rise, https://amp.businessinsider.com/imag...0e-750-364.png
"Nor for the global rankings of debt slaves, where US households squeaked into the ignominious 10th place, barely ahead of Portugal! I mean, come on! Portugal!! "
These are the countries with the biggest debt slaves - Business Insider
6/30 These 7 nation-state backed hacks have put us on the brink of a global cyber war – SB Yes, future paralysis.
6/30 Corporate Brexodus beings as “no-deal” Brexit looms – Wolf Street
This is a BIG deal. The City of London bankers are at war with the ECB. They want to loan to the continent without hindrance. The first shot fired??
"It didn’t take long for the City of London to hit back. On Wednesday the Bank of England warned that unless the EU accepted a temporary permissions regime for financial services, up to £29 trillion worth of financial contracts could be declared void in the event of a no-deal Brexit. Derivatives contracts could come to an end without fresh legislation from the UK and EU, the central bank’s financial policy committee said."
https://wolfstreet.com/2018/06/28/co...-brexit-looms/
Yesterday, I saw a headline about how the economy was doing so well because bank earnings were up.
April Bank Of America Earnings Jump 51% In Q1; Stock Setting Up
Bank of America hauls in biggest profit ever - CNN Money
OK, that all sounds good. The cheerleaders are hard at work. What is the reality?
June Banks just posted the longest losing streak ever, and it could get a lot worse
https://www.cnbc.com/2018/06/27/bank...get-worse.html
"Financials just extended their losing streak into a 13th straight session, a record for the sector.
The XLF financial ETF's sell-off has caused major technical damage to the charts, according to Matt Maley, equity strategist at Miller Tabak.
“Look at that XLF, it’s broken some key support levels,”
“It’s also broken below its 200-day moving average which has given it good support all year this year ,and now it’s broken slightly below the bottom end of its lows for this year,”
more runs to the Treasurys and more flattening of the yield curve,” Schlossberg said on Wednesday’s “Trading Nation.” “All these dynamics are kind of like a toxic brew for the financials.”
The yield curve, which measures the difference between short-term and long-term bond yields, is now at its flattest level since August 2007. The flatter the yield curve, the tighter a bank’s net interest margin, which exacts more pressure on its profitability."
The banks can't make money when the yield curve is flattened.
6/30 Yield curve still flattening relentlessly – Financial Sense
6/30 European yield curve collapses on report ECB considering operation twist – CNBC
6/30 China’s “debt trap” is even worse than we thought – Quartz
The impossible trinity is eating them up.
6/30 Canada makes retaliatory tariffs official: ‘We will not back down’ – CNBC
Canadian and Alaskan railroads are well known for killing a couple hundred moose every year. The moose will never get off the tracks when a train is coming.
6/30 Chinese stocks in bear market, on pace for worst year since 2011 – CNBC
That's what happens when your customers go broke.
6/30 Emerging markets are in a death cross, with another big drop ahead – CNBC
https://www.cnbc.com/2018/06/29/emer...re-losses.html
China will devalue their currency and cause a drop in American markets of at least 10--12%. As the dollar "gets stronger", the EM debt will be that much harder to service.
6/30 Debt for US corporations tops $6 trillion – CNBC
YES, and as interest rates rise, this debt won't be serviced.
6/30 Buy bitcoin or gold for the end of the liquidity party? – Goldcore
Unless you have a lot of money, hold paper U.S. dollars.
6/30 US saving rate continues to contract – Zero Hedge
So, we aren't putting money in the banks AND, the flattening of the yield curve is killing their profits. Armstrong makes it very clear that the banks will be closing.
6/30 Danes see record low bank deposit rates – Bloomberg
I wonder why??
"Danish households clocked in at 123.6% of household debt to GDP. These figures from the Bank for International Settlement, gathered up by Trading Economics, cover the period through Q2 2016. So Australians, who were essentially neck-to-neck at the time with the Danes, might have surpassed them by now. But that stunning level of 123.6% of GDP is good for 2nd place, though it's down from 140% just before the Financial Crisis (via Trading "
"And here is Number 1, the most glorious debt slaves of all, the country whose central bank is trying to manipulate down its currency by imposing steeply negative interest rates: Switzerland. "
Look at this rise, https://amp.businessinsider.com/imag...0e-750-364.png
"Nor for the global rankings of debt slaves, where US households squeaked into the ignominious 10th place, barely ahead of Portugal! I mean, come on! Portugal!! "
These are the countries with the biggest debt slaves - Business Insider
6/30 These 7 nation-state backed hacks have put us on the brink of a global cyber war – SB Yes, future paralysis.
6/30 Corporate Brexodus beings as “no-deal” Brexit looms – Wolf Street
This is a BIG deal. The City of London bankers are at war with the ECB. They want to loan to the continent without hindrance. The first shot fired??
"It didn’t take long for the City of London to hit back. On Wednesday the Bank of England warned that unless the EU accepted a temporary permissions regime for financial services, up to £29 trillion worth of financial contracts could be declared void in the event of a no-deal Brexit. Derivatives contracts could come to an end without fresh legislation from the UK and EU, the central bank’s financial policy committee said."
https://wolfstreet.com/2018/06/28/co...-brexit-looms/
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