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BOJ’s NIRP failure Triggers Doom-Loop In European Bank And Credit Markets
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
davidstockmanscontracorner.com / By Ambrose Evans-Pritchard at The Telegraph /
Credit stress in the European banking system has suddenly turned virulent and begun spreading to Italian, Spanish and Portuguese government debt, reviving fears of the sovereign “doom-loop” that ravaged the region four years ago.
“People are scared. This is very close to a potentially self-fulfilling credit crisis,” said Antonio Guglielmi, head of European banking research at Italy’s Mediobanca.
“We have a major dislocation in the credit markets. Liquidity is totally drained and it is very difficult to exit trades. You can’t find a buyer,” he said.
The perverse result is that investors are “shorting” the equity of bank stocks in order to hedge their positions, making matters worse.
Marc Ostwald, a credit expert at ADM, said the ominous new development is that bank stress has suddenly begun to drive up yields in the former crisis states of southern Europe.
“The doom-loop is rearing its ugly head again,” he said, referring to the vicious cycle in 2011 and 2012 when eurozone banks and states engulfed in each other in a destructive vortex.
The post BOJ’s NIRP failure Triggers Doom-Loop In European Bank And Credit Markets appeared first on Silver For The People.
Thanks to BrotherJohnF
Source: http://silveristhenew.com/2016/02/10/bojs-nirp-failure-triggers-doom-loop-in-european-bank-and-credit-markets/
