Meanwhile, European banks are taking a beating

KlausKlaus Posts: 102 Copper ✭✭
As of this momento...
Commerzbank -8%
Deutsche Bank -4%
Santander -4.5%
BBVA -4%
BNP Paribas -3.5%
Societe Generale -3,5%
Popolare -7%
Monte Paschi -12%
Unicredito -6.5%



  • UvasUvas Posts: 680 Silver ✭✭✭✭
  • KlausKlaus Posts: 102 Copper ✭✭
    European markets just closed. Selected banks:

    Commerzbank -9.2%
    Deutsche Bank -4.8%
    Santander -5.3%
    BBVA -4.9%
    BNP Paribas -4.3%
    Societe Generale -3,1%
    Popolare -10.1%
    Monte Paschi -16.1%
    Unicredito -7.2%
  • IconateIconate Posts: 68 Tin ✭
    @Klaus Such a beautiful sight
  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    I wrote a piece about the banking situation a couple of months ago...!Banking-Stress-Fractures-/c1q8z/56b4bb360cf26832893b690e

    It seems that things have only gotten worse since then.
  • nigelmarkdiasnigelmarkdias Posts: 1,323 Silver ✭✭✭✭
  • KlausKlaus Posts: 102 Copper ✭✭
    @GrandpaBrian Good thought.

    You see, I think that one pf the things happening (only one) is that free movement of capitals have fostered similar managerial behaviours in a logically single world market.

    Therefore (leaving banksterism aside), they all have had similar incentives and I presume they have acted similarly and therefore have similar problems.

    In some cases there may be overlending to oil, in other cases to real estate, in other cases to other industries...

    But the common feature is overlending. And everyone in this site have a fairly good idea on the effects of fractional reserves, etc on all this.

    But I am pretty sure that, with exceptions, the whole banking industry is similarly bankrupted on the basis that they have acted on similar incentives in the same arena
  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    I am fascinated by the concept of "unintended consequences". When Central Banks and governments interfere with the capital markets, distortions are introduced and sometimes chains of events occur that they simply did not foresee or consider. Rickards says that they run their programs using the wrong models and says that they need to use complexity theory to reduce risks.

    Let me ask you this question: if you had $780,000 of spare cash, would you go out today and borrow $20,000?

    Well, Alphabet/Google did exactly that today except they borrowed $2 Billion when they already had $78 Billion they weren't using.

    Why? To dodge taxes basically. To them such behaviour is logical given the global financial environment and the US corporate tax situation.

    Now scale that up to all major international corporations and ask yourself if this sort of financial engineering is really good for humanity or business. Does anybody really know what might happen as a result? I sure don't but my considerable gut tells me it won't be pretty.
  • KlausKlaus Posts: 102 Copper ✭✭
    Aaaaaaand the three-day summary
  • GoldmattersGoldmatters Posts: 3,996 Admin
    @Klaus well.... Only 8 of them are down double digits. It's probably nothing. (Obvious sarcasm)
  • KlausKlaus Posts: 102 Copper ✭✭
    @GoldMatters well, going back a few months, some of them are close to triple digits :D
  • GoldmattersGoldmatters Posts: 3,996 Admin
    @Klaus I'm only going to start worrying when they are down quadruple digits.
  • KlausKlaus Posts: 102 Copper ✭✭
    @GoldMatters yes, that would contravene any mathematics school, but sure they may achieve it :D .

    I am still intrigued if there'll be bail in or bail outs. They are insisting Monte Paschi has had a private market-based solución. That would be very bad news for the rest
  • GoldmattersGoldmatters Posts: 3,996 Admin
    @Klaus agreed that quadruple digits, just like negative interest rates, make absolutely no sense :)

    Could be either, or a combination of both. Let's be honest, Central banks have no idea what they are doing. Current policy is totally experimental and changes frequently. All we know is that it won't work.

    Kicking the can. Out of road. Conditions continue to deteriorate.

    If only there was a viable escape valve for everyday people.

    Oh wait ......... @Goldmoney
  • Mark_79Mark_79 Posts: 57 Copper ✭✭
    All banks are in terrible trouble.

    Very low interest rates mean that they can't earn money in the traditional sense, so both banks and insurance companies are chasing returns in ever more riskier ventures. As everyone else is chasing the yield and there's too much money about the yields of risky investments drop so investors then convince themselves that the low yield equals a low risk investment and the cycle perpetuates.

    Remember 5-6% in a US bond was once the norm, now people are happy to invest at 5-6% in peer to peer lending of subprime personal loans!

    This will all end very badly.
  • Mark_79Mark_79 Posts: 57 Copper ✭✭
    edited August 2016
    To continue.... If anyone is involved in P2P lending I would get out while you still can. When things go south the vast majority of these schemes will collapse.

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