from King World News
In spite today’s bounce, a 50-year market veteran warns just how violent things can get to the downside.
By Art Cashin Director of Floor Operations at UBS
October 17 (King World News) – “On this day (+2) in 1987 (that’s 27
years ago, if you are burdened with a graduate degree), the NYSE had one
of its most dramatic trading days in its 220 year history.
It suffered its largest single day percentage loss (22%) and its
largest one day point loss up until that day (508 points). No one who
was on the floor that day will ever forget it. While it was an
unforgettable single day, there were months of events that went into its
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zerohedge.com / by Tyler Durden on 10/17/2014 11:05Please share this article
Several days ago we were confused why,
out of the blue, a €1 billion loan BWIC appeared that was dumping
German non-performing loans. After all, the whole point of the European
“recovery” fable to date has been to deflect all the attention from the
“pristine” German banks, up to an including world-recordderivatives juggernaut Deutsche Bank, and to focus on Greece and other insolvent peripheral European nation. Earlier today, German Handelsblatt provided an answer,
when it reported that “four German banks are on the brink”, i.e., four
banks of which three are known, HSH Nordbank, IKB and MunchenerHyp, will
likely fail the ECB’s stress test whose results are due to be announced
Keep in mind that this is a significant fraction of the 24 German banks that are undergoing the ECB’s Stressfarce test.
So one wonders: if one in six German banks is so unsafe even the ECB
(which kept Cypriot banks going well past their insolvency) will give
them a black stamp (because in Europe failing a bank stress test is
first of all impossible since both Bankia and Dexia passed theirs with
flying cololrs, but more importantly a death sentence), what does that
leave for the rest of Europe’s banks, all of which are in far more dire
shape than sleepy Germany?
In any case, here is Handlesblatt’s warning: