Bankrupt Banks Brutally Bleeding…Worldwide

I. M. Vronsky

March 24, 2016

All avid students well know a nation’s economy depends a great deal upon the strength of its financial system…to wit: the stability of its banks.  To be sure most major banks are “crowing” stability, strength and all that exemplifies security.  But is it true?! What is really the financial solidarity of major world banks?
This analysis will reveal the international banking system as a House of Cards (at best) and a rickety, fragile, unsound, unstable, weak and unsound Garage for Storing Cash (at worst).
To review a bank’s Balance Sheet and Income Statement is a futile chore, which bears little information that is trustworthy.  The reason is today’s ‘exotic’ Accounting Methods permit distortions beyond comprehension.  Therefore, to determine the real financial solidary of the banks comprising this study, we are going to focus only upon the long-term price trend of their stock price.  Indubitably, there can be NO distortion implied nor built into the stock price, which is determined rationally by many thousands of individual investors and Institutional Investors over a protracted period.  To this end we will examine the stock price trends of 7 major world banks and four Banking Indices.  The 11 banking stock price indicators include major US Banks, European Banks, Bank of India and Banking Indices which encompass many 100s of individual banks.  Specifically, they are:
Bank of America
Citigroup
Deutsche Bank
Commerzbank AG
Credit Suisse
Barclays Bank
Banco Santander (Spain)
Bank Index (NASDAQ)
Bank Index (S&P)
US Bank Index (Dow Jones)
Bank of India
The following charts demonstrate the monthly stock price trend since 1999. Furthermore, one of the most accurate long-term Technical Indicators is also shown, namely Full Stochastics.  In each chart the dark blue circle in the Full Stochastics pin-pointed when the stock price commenced the birth of the BEAR MARKET CRASH.  It is imperative to notice the Stochastics Blue Circle has recently heralded another stock market crash…a la 2001-2003 and 2007-2008.  To ignore this CRASH WARNING SIGNAL is financially MASOCHISTIC.  Additionally, bank on the markets to be extremely volatile…to entice the ignorant, naïve and ill-informed to buy stocks…as the big guys are DUMPING.
Bank of America

Citigroup

Deutsche Bank

Commerzbank

Credit Suisse

Barclays Bank

Banco Santander (Spain)

Bank Index (NASDAQ)

Bank Index (S&P)

US Bank Index (Dow Jones)

Bank Of India

Bank Stocks were massacred in the 2007-2008 global CRASH IN STOCKS. During that stock market debacle, banking stocks were pummeled down the following percentages:

The average loss of global banking stocks was a horrifying -83% during the 2007-2008 Global Stock Market Crash.  In tragic concert the S&P500 common stock Index declined only -59%.
Now Fast Forward To Today…and we see global banking stocks are AGAIN leading worldwide stock markets into another CRASH MODE.   Year-To-Date Performances of the six global banks in our analysis have fallen a whopping average of -25% (in only three months). Consequently, this suggests the emergence of a terrifying bear market in global bank stocks in 2016…and possibly well into next year.

http://tinyurl.com/hmrqnp9
US Stocks Forecast For 2016-2017
Obviously, Banks in the US and the Euro Union are rapidly going down the toilet…faster than they did in the 2007-2008 MARKET CRASH. And as plummeting bank stocks in the 2007-2008 crash pulled down the general stock market, so will they indubitably shepherd common stocks into the bears’ lair.  The big question is:  HOW FAR MIGHT THE DOW AND S&P500 INDICES DROP in the forth-coming market crash?!
Based upon the analysis “Bankrupt Banks Brutally Bleeding,” the probability is high US equities are hell bent for leather to severely tumble this year…and possibly into 2017.  The above charts suggest the DOW Index may eventually be hammered down to 8000 support, while the S&P500 Index might decline in lethal concert to its 800 support (both in early 2009). 
In this event hordes of investors may again flock to the traditional safe havens of GOLD AND SILVER.
Historically, the average bull trend lasts 63 months. However, we are already 84 months into this one…which means the BEAR MARKET in stocks has already begun…as this bull is very long in the tooth.
Related Research
The Coming Debacle Will Be Magnified By Derivatives Causing Banks To Fail
Breaking UP our Big Banks – very easy today! 
Bear Market Foot Prints In US Equities
Stocks To Crash Worldwide In 2016
Fed's Lockhart Says Rising Rates to Create Risks for U.S. Banks
The Collapse Of The Too Big To Fail Banks In Europe Is Here
The Bear Is At The Door (Part 1): Momentum Stocks Getting Crushed
All The Stock Charts Spell: B-E-A-R M-A-R-K-E-T
Legend Warns Global Panic Is Coming
The Looming Global Bear Market In Stocks
Stock Bears Are Preparing To Run Amok…Worldwide (Part 2)
How Much Will The DOW Index Correct In The Developing 2015-2016 Bear
Hell Week For The Global Economy Gives Signs Of Things To Come
Banking Panics of 1930 And 1931
********

Gold-Eagle provides regular commentary and analysis of gold, precious metals and the economy. Be the first to be informed by signing up for our free email newsletter.

 

Free Gold-Eagle Newsletter!

• Fresh weekly insights on gold, precious metals, and the economy
• Leading authors from around the world
• Always free
• Stay informed!

 

Founder of GOLD-EAGLE in January 1997. Vronsky has over 40 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a Financial Analyst with White Weld.  He believes gold and silver will soon be recognized as legal tender in all 50 US states (Utah and Arizona having already passed laws to that effect). Vronsky speaks three languages with indifference:   English, Spanish and Brazilian Portuguese.  His education includes university degrees in Engineering, Liberal Arts and an MBA in International Business Administration – qualifying as Phi Beta Kappa for high scholastic achievement in all three.