Updated July 1st, 2019 - Both the Federal Reserve and ECB clearly signal we shall see NO further interest rate hikes....and that will print more money later in 2019.

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Short term candle	Chart comments
	Jan 16, 2016: BREAKOUT STALLED and BEARISH it is... Jan 17, 2017: expect a (minor or flat) correction Dec 23 - Feb 26, 2018: a BREAKOUT or a Canary in the Mine for HIGHER INTEREST RATES. June 8 - July 10: Topping out? Oct 22 - Nov 16: Index fallen out of a BEARISH Triangle = STOP LOSS! Dec 11: Dangerous once 3500 levels is broken. CAUTION! [libor also spells danger] Jan 15 - Jan 28, 2019: 3500 level broken and almost end of Backtest... Feb 20: Bear Trap!? means the end of higher interest rates March 26: BULL TRAP, TOP, and bearish Trend Reversal... April 22 - July 1: lower we shall go.
Long term candle

European banks are in a VERY, VERY BAD shape - Canadian Banks are trouble in Paradise: the deflation of the Canadian Real Estate bubble will affect the Canadian Banks. - yields as of Jan 2019
Goldman Sachs (GS) USA -1.82%	Morgan Stanley (MS) USA- 2.88%	Citigroup (C) - USA- 3.19%	Bank of America (BAC) USA- 2.33%	Suntrust (STI) - USA- 3.61%	Wells Fargo (WFC) - 3.60%
Sell	Sell	Sell	Sell	STOP = Sell	Sell
CIBC - Canada - 5.39% yield	AIG - insurance - 3.11%	Scotia (BNS) - Canada - 4.64% yield	CVS Health (CVS) buyout - 3.05% yield	BITCOIN	PayPal
topping = sell	Bottom Trend channel	topping out = Sell  Dangerous-Derivatives	Stop loss = Sell	Still a downtrend-The End!	Breakout+Bull trend
* the performance of AIT (Aetna Life) is the consequence of the manipulation of the Bond market (municipal and Treasuries) by the FED = extremely dangerous.

European Banks are in a VERY BAD SHAPE & sit in a downtrend and are technically a SELL...
Deutsche Bank - Germany	HSBC - UK - 4.82%	Credit Suisse - Switzerland- 3.05%	UBS - Switzerland - 4.90% yield	Barclays - UK - 3.23%	ING  6.20% yield
Zombie bank - Derivatives- SELL will merge with Commerzbank		SELL	SELL	Bottom trading channel	Bottom trading channel
ABN-AMRO - 5.95% yield			Credit Agricole - Fra. - yield 5.56%	Société Générale- Fra.- yield 7.62%	AXA - France - 6.44% yield
Derivatives - Sell				Derivatives - Sell	insurance

note: the above charts are somewhat different because of the Dollar/Euro fluctuation but clearly sent their message!

• Important: there is a HUGE difference between COMMERCIAL BANKS and 100% RESERVE INVESTMENT BANKS like Euro Pacific.
• Under normal conditions, the profit figures of Banks improve when Interest Rates rise. This time however the situation is different: 1. there is NO ROOM for higher interest rates and 2. the value of the High Order Capital Goods (Real Estate in particular) will continue to suffer...and this will severely impact the balance sheets of the Banks and Financials.
• European Banks (and this includes the SWISS BANKS) are in the worst shape, next come the US-Banks.
• Houston, we have a problem: Deutsche Bank is virtually BANKRUPT and too Big to Bail-out or to Bail-in!
• Stress Tests don't mean NOTHING! ...smoke curtains they are.
• Canadian banks were in better shape...that was until May 2017: Sell Canadian bank stocks. This is another no-brainer. If housing prices in Toronto tank, a wave of foreclosures could rip across Canada. Banks and other lenders would take huge losses if this happens.
• Panamanian Banks are even better. Banks in Panama must by law keep a min. of 30% reserve ratio.
• Accounts with Designated Banks in America are covered by Government up to $ 1 million.

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Authorities will rather risk Hyperinflation and Nationalize than let banks go bankrupt.

US and European Banks have been nationalized and being state owned they won't be let down. [ Bank equities are not a lot better than Cash and Bonds....but there is much better investments than Bank shares]. Increased capital requirements and Stress test on both sides of the Atlantic are nothing more but propaganda to avoid a potential 'Run on the Banks'. A run on the banks would mean a De Facto Bankruptcy of the Banking system: the money you think you have in your bank account...well, it is not there...it is gone...

Technically speaking, most large banks are bankrupt. Banks are all over the economy like solid cancer would be. The dramatic situation in Greece, Spain, Portugal and now also in Ireland...is such that the Authorities have no choice but the bail these countries out. A failure to do so would also bring down German, Dutch, French and British banks and the ruling politicians with them. Under NO condition will the Authorities let their best buddies - the Banks - go down. In other words, they will do WHATEVER is requested to keep them alive. There is however a limitation to their actions. It will show up in due time and we call it HYPERINFLATION. Countries like Argentina and Zimbabwe are living examples of what is to happen. During 2008 about 25 banks went belly up. For 2009 we already have 100. September 2010 120 banks disappeared. 2011 an average of 3 banks are closed down (taken over) each week...

Bank shares in the EU and Switzerland: Amazing is to see people still trust Banks and even still buy Bank shares and (even worse) Bonds issued by Banks!? Having said this, Banks won't go insolvent as long as Governments are solvent. For this reason, the overall situation is even more dangerous.

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The IMF expects that Spanish and Italian banks will lose $300 billion just on their loans to companies in the next 2 years.  If we add to that property loans and personal credit, it will reach into the trillions of dollars.  The Eurozone banks are working with a staggering average 26-times leverage, which guarantees they are completely insolvent. The eurozone banks need another $1 trillion just to meet the stress test. With the eurozone banks insolvent, it means that the ECB, as well as the eurozone governments, are also insolvent.

The Volcker rule goes on April 1st, 2014. The Volcker Rule will cost U.S. national banks as much as $4.3 billion to implement as it forces them to sell restricted investments at a loss, according to a study by the Office of the Comptroller of the Currency. The regulator estimates implementation costs between $413 million and $4.3 billion for banks it supervises, the OCC said in a report released yesterday. Most of the potential costs could come from the rule’s curbs on certain investments, such as in some collateralized loan obligations. The agency also said affected banks will mostly be those with more than $10 billion in assets and could include as many as seven community banks.

• There is a disconnect between Banks in different parts of the world. Canadian banks continue to behave well and our Canadian Bank Shares continue to show new records. American bank shares are breaking out and showing a mature bottom and some have already started a BULL Trend. European Bank shares continue in misery...
  
• Banks in Panama MUST by law have a reserve coefficient of at least 30 %.
  
• The Deutsche Bank is on the verge of collapse because the value of the derivative-position of the bank exceeds the value of the total world economy! Deutsche Bank carries $ 72 trillion derivatives on its books, while the world economy is $ 66trillion.
• Governments force/blackmail pension funds, insurance co's and banks to absorb a maximum of Treasuries: Japan, USA, France, Belgium, The Netherlands.
• The CYPRUS DEAL tells it all...STAY AWAY. Financials and this includes Insurance co's are DOOMED! What's more, the authorities are lying to us: at the time Greece ran into problems, it was known that there were repercussions for Cyprus. Why than took it over a year before the Cyprus problems surfaced?
  
• In the EU-zone there is NO MINIMUM's for the Bail-in amounts: if an accident happens, you can lose ALL your deposits with the bank.
• Trusting your money to the banks is like trusting your life to the Devil.  We have insolvent banks supporting insolvent sovereigns and insolvent sovereigns supporting insolvent banks. Most large banks are simply not solvent if there are major sovereign defaults. The US banks have sold some $90 billion in credit default swaps on Greek, Irish, and Portuguese debt to European banks. That is supposedly balanced with other purchases of CDS, but much of that insurance is from German banks. A firewall will do nothing more but delay the Apocalypse because it is built with Fiat Paper money which is decreasing in value and power.
• Not only is the financial system like we have been living it for the last 60 years going to break up but we've come to a point where the CLEARING HOUSES are going out of business. With digitized securities, the bankruptcy of a clearinghouse is DRAMATIC. [a clearinghouse arranges the transfer between parties and banks each time a stock, bond, the currency is bought or sold and when money is transferred between banks...more]

• The Bank of America, Wells Fargo and Citigroup have been downgraded and this will happen again. The credit rating of Goldman Sachs has fallen below the rating of Citicorp. Dexia goes bankrupt and KBC runs into problems. Credit Suisse absorbs its daughter Clariden Leu to improve its ugly looking balance sheet...When Greece falls into bankruptcy its largest creditor or the Deutsche bank will follow. But on top, we now also have Portugal, Italy, and Spain. Belgium (Dexia) is also running into problems. Together with Deutsche Bank, because of Credit Default Swaps the 5 largest American Banks will default. Hence ALL WILL BE DONE TO AVOID THIS! (see a video clip about POMO below)
  

• The financial problems have a direct impact on the dangerous structure of CDO's (derivatives, structured products,...) which brought Greece down in the first place and on the Financial markets: stocks, commodities, bonds!

• Banning Shorters only makes matters worse. This continues to be the tale of a dangerous adventure. Banks are bankrupt and they will rot to the core! There is no way to keep bailing them out without risking HYPERINFLATION and there is not even a plan to mop up all the extra QE...It will take Hyperinflation before the herd SEES that the Emperor has no clothes.

• A unique aspect of Banking systems is that they cannot be rebuilt once they turn insolvent. They rot in place and nothing can be resuscitated except for the balance sheets. Not even the higher capital requirements required by the Basel III regulations can solve this problem. The Basel agreement gives banks 9 years to comply with a 7% reserve level, practically nullifying the exercise.

• One has to be a fool (or a Hedge fund manager) even to consider buying Bank shares. Fractional Reserve Banking is nothing more than Premeditated Theft and Usury [usury is charging an interest rate which cannot possibly be honored]. Charts are issuing warnings all the time. Stay away from Bank and Financials: it is probably safer to travel to Las Vegas and use your funds to play the Roulette than to speculate on Bank and Financial Equities.

• So many banks have been closed down (+ 120 from Jan to Sep. 2010 and so many will follow) that the FDIC has run out of funds! Increased capital requirements are still insufficient and Financials remain dangerous as long as we have Fractional reserve banking and creation of fiat money out of thin air. The FDIC lost $ 25 bn and last June (2010) it was in the hole for $ 10bn.

• The exposure of the major banks to Derivatives is scary. Derivatives are a nuclear financial bomb and Interest Rates are the detonator.

• The crisis in Greece is not so much about Greece, which is irrelevant in the greater scheme of things (at 2% of the EU economy). It is about the German, French and British banks and the consequences if Greece defaults, followed by Ireland, Italy, Portugal and Spain (the infamous PIIGS). These countries will default on their sovereign debt; it's just a question of when. Creditors worldwide had a combined direct exposure to the PIIGS of almost $2.4 trillion, according to the Bank for International Settlements, as at Dec 31, 2010. (The total profits of all the EU banks for the six months ended June 2010 were just €46.8 billion while total equity was €1.8 trillion, according to European Central Bank data).

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If you consolidate 45 bankrupt Spanish banks, the end result still remains a bankrupt entity!  In any event, there is widespread agreement that the regional Spanish banks, the cajas, are bankrupt, as they made massive loans for construction and mortgages. The government has taken some action, forcing 45 Caja savings banks that were threatened by bankruptcy due to bad property loans to consolidate down to 14. But although bank regulators have estimated that Spanish banks will need €26 billion in extra capital, many skeptics believe this severely underestimates future losses and that the government may have to step in with a much larger bailout for the financial sector. The Bank of Spain contends that construction debt to banks stands at some €400 billion, of which repayment of €176 billion is questionable, with €31.6 billion of those considered nonperforming. (WSJ).

 Replace the word FED by the word ECB for Europe in the following video clip:  this excellent video is short but to the point. It is a very good explanation of why there is no way out of QE. POMO is primarily to bail the banks out of bad mortgage paper that they have written up in value to outrageous levels and not audible to sustain thanks to FASB. It is a way of hiding that outrageous paper trick that makes the financial balance sheets look good as FASB allowed the financial industry to decide for themselves what crap derivative paper is worth. This is the financial equivalent of the mafia burning down the restaurant used to launder money before the IRS saw there were no clients. This is the equivalent of the auditors shredding the trades at Enron before anyone could audit them. This is the truth.

 Click here for Bank & Financials II

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