Lehman Brothers – Deja Vu Everywhere
Georgi Stankov, June 28, 2016
On May 3rd I wrote that Lehman Brothers collapse is all over in the charts of EU banks:
Lehman Brothers Greets: The EU Banking System is a 46 Trillion Euro Ponzi-Scheme
And that the collapse of the Orion monetary system will most probably begin with the crash of major European banks. The Brexit has made this forecast now a certainty – as certain as my precise live forecast of the Brexit vote.
Two working days after the Brexit, the EU banking index has collapsed more than 22% from already historical low levels:
European banking stocks have now lost 22 per cent of their value in the two days of trading following the UK’s EU vote, and have come perilously close to the all-time low hit during the depth of the sovereign debt crisis four years ago. So far today, the Euro Stoxx banking index is down 4.6% to 80.34, following a precipitous 18 % fall on Friday. The sell-off has driven the index just seven points off the record low of 73 hit in July 2012 – before Mario Draghi promised to do “whatever it takes” to save the currency union. This was the moment when the financial crash which I predicted for 2011-2012 was postponed by the HR one more time as humanity failed to awaken. Brad and I have discussed this topic extensively in the past and explained why the years after 2011 resemble very much a time loop of the years 2008 – 2011.
Italian banks have been in the eye of the investor storm, with suggestions the government of Matteo Renzi may be forced to prop up a financial system that lumbers under €360 bn of bad loans. The first candidate for official bankruptcy is UniCredit which lost 23.79% today when its stock fell below 2 euro (1.91 euro):
This is the lowest value in the history of this bank that follows the bankruptcy pattern set by Lehman Brothers in 2008:
In the UK, the broke and state-owned Royal Bank of Scotland has now seen shares fall to their lowest level since January 2009. Shares in RBS and Barclays were briefly suspended on Monday after falling more than 8 per cent, triggering an automatic stabiliser mechanism.
Britain’s FTSE 350 index of bank stocks has also declined a further 7.8 per cent, plummeting to a seven-year low in afternoon trading.
The sell-off in British bank stocks is set to resume when US markets open. Pre-market trading of UK banks in the US show Barclays down 18 %, Lloyds declining 15.3 %, and RBS down 13 %. In a tone of utter desperation FT writes today about this post-Brexit banking collapse as follows:
“Despite years of boosting capital buffers and being subject to a host of new regulation to increase their resilience to market stresses, the introduction of negative central bank interest rates has heightened fear about eroding bank profit margins (This is my mantra since the end of February when central banksters decided to introduce negative interest rates. Note, George). This stress has been particularly acute in the eurozone, where the EU has introduced new “bail-in” laws forcing shareholders to take a hit from banking collapses (remember the Cyprus robbery of bank savers? Note, George), bringing an end to the era of “too big to fail. On Friday, governor of the Bank of England Mark Carney pledged to pump £250 bn into the financial system to help commercial lenders facing liquidity struggles. The European Central Bank and Federal Reserve have also sought to quell concerns through the use of emergency foreign exchange swap lines last used at the height of the credit crunch.”
It is the lunacy of the central banks to use the same method that already crashed the financial system and the economy in 2008 and expect an opposite result. In fact this only demonstrates the total failure of the financial cabal to control the fiat money system based on massive debt that is now exploding in their face as Adamu, the Pleiadian also confirms.
The terminal ill patient Deutsche Bank is under water and is still my favourite candidate for the new Lehman Brothers case that will trigger a precipitous default of all other major banks. Its shares dropped from 15.20 euro to 12.20 euro within minutes after Brexit and have lost 22.4% in two days:
This is the lowest value of DB shares in its entire history, even lower than after the crash in 2008:
The next most likely candidate for bankruptcy is Credit Suisse:
Which also hit historical lows after the Brexit:
Credit Suisse Chart
Switzerland, which does not belong to the EU will most likely be hit by a double-whammy when the banks crash comes as the other big Swiss bank UBS is even in a more terrible shape:
UBS Group Chart
Now if you think that the Brexit malaise has only spread on the Old Continent, wait till you see how the US banks are coping with this major fiasco of the ruling cabal. The Fed is pretending to perform stress tests of the largest US banks since 2008 in a similar successful manner as the “buck that was hired as a gardener”. After all, these banks own the Fed. “No crow hacks the eye of another”, tells a Bulgarian saying.
Last Friday’s market action, following the Brexit vote in the U.K. to leave the European Union, proved just how feeble the Fed is when it comes to assessing systemic risk and capital vaporization at the deeply interconnected Wall Street mega banks.
While the Dow Jones Industrial Average dropped 3.39 percent at the close on Friday, Morgan Stanley lost a stunning 10.15 percent of its market capital in a 6-1/2 hour trading session. At that speed, Morgan Stanley’s equity market capital could be wiped out in 10 trading sessions were this Brexit panic to continue.
Morgan Stanley Chart
Citigroup, which became a basket case during the 2008 financial crisis, ending up as a penny stock and requiring the largest bank bailout in the history of financial markets, lost 9.36 % of its market capital in Friday’s trading session.
Citigroup Inc. Chart
Bank of America lost 7.41 percent, while Goldman Sachs closed down 7.07 percent.
As if to underscore that this panic selling is related to the trillions of dollars of derivatives on the books of the banks, Wells Fargo, which has a much smaller exposure to derivatives than the other major Wall Street banks, lost a much milder 4.59 percent on Friday.
Another casualty of the Friday selloff was MetLife, the large insurer, which has been fighting in court to have its Fed designation as a global systemically important institution repealed. MetLife had won its battle at a lower court but the government is now in the midst of an appeal. MetLife is a derivatives counterparty and the fact that it sold off so dramatically on Friday suggests its exposure to Wall Street banks is significant. MetLife lost even more than Morgan Stanley on Friday, trimming 10.71 percent off its market cap.
According to the Office of the Comptroller of the Currency (OCC), as of December 31, 2015, there was $237 trillion in notional derivatives (face amount) at the 25 largest bank holding companies in the U.S. with the vast majority of that amount held by just five bank holding companies: JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America, and Morgan Stanley. When this derivative market begins to default this will be worse than a nuclear explosion in the centre of Wall Street.
Therefore it is irrelevant when, and if, GB will exit the EU, as all commentators now discuss, because when the banking crash will come this political monster created by the international banking cartel will simply cease to exist as this happened with COMECON. This does not mean that the idea of one united Europe will be dropped for ever, for it will be reconsidered under completely new premises of life as the new enlightened human civilisation after ascension will be global and beyond nations and supranational structures; however, it will be organised according to universal spiritual principles and not under one big supranational state. There are so many theatres of war now the world over and each one potentates the collapse of the Orion matrix, that one should be clever enough not to focus too much on one timeline and neglect all collateral events that converge into one global conflagration which will consume the entire old order.