Some risk recap, courtesey of Capital Context.
After a turbulent week or two in global financial markets, as reality turned to relief and then back to a more ruinous reality among European sovereigns and their contagiousness, we note that the risk of the 30 most systemically important financial entities in the world has risen to a 13 month high. Let us see if some kind of intervention brings risk down from these elevated levels, like it has in the past.
As we would expect, European financials have the highest risk but it is noteworthy to see how rapidly the risk of Asian financials has run up over the last few months.
A little difficult to see but we note that Aussie banks (overlaid into the chart but not specirfically members of the FSB30) have risen very notably.
When broken down into region it is clear that Europe is the critical area for now as the rest remain further away from recent wides but this is more relative-value driven in our view as we see US financials heading into a tough earnings season that will suirely bring the realization that borrowing from LLPs will no longer be believed.
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