muses of the moment

July 25, 2011

Sigma X update

Sigma X update from zerohedge. Click here. (zerohedge did some website updates over the weekend. Still working out some bugs. Keep trying the link, if it doesn’t work the first time.)

Be very careful, ladies and gentlemen. The Greek non-bailout, really default, is still taking its toll on the European (including Britain) Banking System.

Sigma X (the shadow stock market) reveals that the European Banks, especially Italy, Spain, and Britain, are still under extreme pressure. They are breaking down because of their exposure to Greek, Spanish, and Italian debt.

This situation has the potential to move right over the pond to the US because of the Money Market Funds exposure to high risk European debt. If it does, the debt ceiling circus will be blamed, not the Greek default, for causing a run on European banking/credit system and thus US Money Market Funds.

We have seen a run on the European banks with the most exposure to the PIIGS debt and the US Money Market Funds for the last several weeks. The Europeans are doing the exact same thing that the US did with AIG and Bear Stearns and the implosion of mortgage-backed derivatives. They are picking and choosing who to bailout and who to let go and pouring a huge amount of cash into the system to keep it going, while investors drain their money from the other side of the system. The likelihood of a major global systemic problem, similar to 2008, developing from this reaction is very high.

It will not be announced. Be prepared.

Update, later on July 25: Italy’s debt is not only affecting exposed European and British banks, but they have cancelled their August bond auction. Click here.

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2 Comments »

  1. looks like HSBC is showing some stress…

    Comment by madmax — July 25, 2011 @ 4:30 pm

  2. Yes, indeed.

    gg

    Comment by totallygroovygirlfriday — July 25, 2011 @ 4:40 pm


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