It is becoming increasingly impossible for the glad-handing, cheerleading members of the status-quo-hugging club to ignore the fact that Europe's banking system is collapsing.
Today's weakness has sent both Deutsche Bank and Credit Suisse (not some tin-pot Italian banks) to record lows ("worse than Lehman" lows)…
And, in the short end of the EUR curve, we are seeing funding stresses in the form of widening Libor/OIS spreads… (basically a measure of short-term counterparty risk)
And EUR/USD 3-mo. cross currency basis, the latter being driven by demand for USD funding…
While not at full panic mode yet, things are escalating rapidly…
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