Eurozone banks now caught the cold
As I mentioned before, the contagion will spread like wildfire because the banking system are so intertwined.
We now see Deutsche Bank potentially get caught in the onslaught. Their share tanked by approximately 15% last Friday.
After Credit Suisse got obliterated and UBS come to pick up the remains with assistance from SNB ($100 Billion Swiss Franc), their share price now trade below $1.
Liquidity injection did nothing to help Credit Suisse. I see this bailout as helping the top 10% to rescue their money and let the rest die.
It is always the case. Silicon Valley Bank just gap down and declining more, Signature Bank not showing signs of recovery at all and the regulators/leaders of US still say everything is okay.
One thing to bare in mind is that, all the country's leaders have a fiduciary duty to not cause public panic, even though they have a gun to their head.
So, what ever you read right now in the mass media by Janet Yellen, Jerome Powell, Bank CEOs and other Central Bank chairperson, is deemed untrustworthy.
As mentioned before, the next sector that might get hit will be real estate, in particular commercial real estate.
White collar layoffs on-going + high inflation + high cost of borrowing + tightening lending requirement + high delinquency in rental/mortgage payments
+ work from home/hybrid preference = commercial real estate crash. If this crash happens, Commercial Mortgage Backed Securities will come crashing down too, which will bring down the Big Banks.
There will be flight to safety. Gold and silver will continue to rise, no doubt about that. US Stock market will like rally short term as Eurozone and Switzerland is on shaky grounds.
US Dollar may see a short term bullishness as sentiment on Euro bloc is hitting the headlines. Massive riots in France due to Macro increasing retirement age, will also be priced-in and act as catalyst.
APAC region could potentially see great alternative to store value and protect capital. APAC markets, as I always said, is more conservative and resilient.
By Sifu Steve @ XeroAcademy
We now see Deutsche Bank potentially get caught in the onslaught. Their share tanked by approximately 15% last Friday.
After Credit Suisse got obliterated and UBS come to pick up the remains with assistance from SNB ($100 Billion Swiss Franc), their share price now trade below $1.
Liquidity injection did nothing to help Credit Suisse. I see this bailout as helping the top 10% to rescue their money and let the rest die.
It is always the case. Silicon Valley Bank just gap down and declining more, Signature Bank not showing signs of recovery at all and the regulators/leaders of US still say everything is okay.
One thing to bare in mind is that, all the country's leaders have a fiduciary duty to not cause public panic, even though they have a gun to their head.
So, what ever you read right now in the mass media by Janet Yellen, Jerome Powell, Bank CEOs and other Central Bank chairperson, is deemed untrustworthy.
As mentioned before, the next sector that might get hit will be real estate, in particular commercial real estate.
White collar layoffs on-going + high inflation + high cost of borrowing + tightening lending requirement + high delinquency in rental/mortgage payments
+ work from home/hybrid preference = commercial real estate crash. If this crash happens, Commercial Mortgage Backed Securities will come crashing down too, which will bring down the Big Banks.
There will be flight to safety. Gold and silver will continue to rise, no doubt about that. US Stock market will like rally short term as Eurozone and Switzerland is on shaky grounds.
US Dollar may see a short term bullishness as sentiment on Euro bloc is hitting the headlines. Massive riots in France due to Macro increasing retirement age, will also be priced-in and act as catalyst.
APAC region could potentially see great alternative to store value and protect capital. APAC markets, as I always said, is more conservative and resilient.
By Sifu Steve @ XeroAcademy
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