Europe's Bank Crisis Arrives In Germany: €29 Billion Bremen Landesbank On The Verge Of Failure
When most recently reporting on the latest European banking crisis, yesterday we observed a surprising development involving Deutsche Bank, namely the bank's decision to quietly liquidate some of its shipping loans. As Reuters reported, "Deutsche Bank is looking to sell at least $1 billion of shipping loans to lighten its exposure to the sector whose lenders face closer scrutiny from the European Central Bank.
Sovereign Credit Is Deteriorating At A Record Pace
7 July, 2016
Culminating with the tipping of the UK's numerous real estate fund "dominoes" and the subsequent fallout in the wake Brexit, Fitch has been on a ratings-slashing spree, having cut the credit ratings on 14 nations so far in 2016, most recently that of the United Kingdom - a record downgrade pace for the rating agency. As the FT reports the majority of those 14 nations are concentrated in the Middle East and Africa: areas that have the most exposure to slumping commodity prices and declining nominal exports. Fitch also downgraded the UK citing falling oil prices, a stronger US dollar and Britain’s pending exit from the EU.
"So far this year, S&P has downgraded 16 sovereigns — a half-year figure only exceeded once, at the height of the eurozone crisis in 2011. Moody’s has downgraded 24, compared with 10 at the same point last year."
“It’s a very strange time — the credit is undoubtedly weakening but investors are still crowding in because there are so few places to find positive yields.” The crowding has caused the average borrowing rate of emerging markets calculated by JP Morgan's index of EM bond yields to fall to a two-year low of 5.25 per cent.
“The problem is growth,” said Mr Baweja. “It is so weak that leverage is increasing and credit is weakening. This doesn’t mean there is a crisis but it does mean we haven’t seen the last of the downgrades.”
Trends This Week – Hillary Clinton latest to prove different justice scale for the elites – 07.06.16
Global forecaster Gerald Celente rips into the decision not to prosecute Democratic presidential candidate Hillary Clinton for her email scandal, demonstrating once again two scales of justice: One for the elites, one for the rest of us. Elsewhere, Celente analyzes market indicators in the aftermath of Brexit. Global equity markets are in turmoil. However, the business media’s view of market mayhem is a snapshot in time dating to the June 23 “Brexit” when the United Kingdom voted to exit the European Union. Indeed, while Brexit triggered the current turmoil, Celente's trends-eye view identifies the current market volatility in a Globalnomic® context far bigger than Brexit