It seems that the issues around the banking sector will not go away. Deutsche posting a huge loss. Credit Suisse their first since 2008. Banking stocks in general being hammered. Sovereign Debt problems. Non performing loans (those being reported anyway) are increasing. In the age of instant data the strange thing to me is that people do not really know (or probably understand) the size of the problems. You would have thought that it would be quite easy to get to grips with the inter connectivity of the worlds financial institutions and indeed of governments themselves. Perhaps they can but the reality is just too awful to imagine.... Enjoy your Monday's!!
FOR those who worry that a repeat of the crisis of 2007-08 is imminent, this week brought fresh omens. Shares of big banks tumbled; despite a mid-week rally, American lenders are down by 19% this year, European ones by 24% (see article). The cost of insuring banks’ debts against default rose sharply, especially in Europe. The boss of Deutsche Bank felt obliged to declare that the institution he runs is “absolutely rock solid”; Germany’s finance minister professed to have no concerns (thereby adding to the concerns). This is not 2008: big banks are not about to topple. But there are reasons to worry, and many of them converge on one country