Another Banking Crisis?

A few days ago the New York Times reported that people were starting to get nervous over the stability of the world’s biggest banks:

An unsettling trend has emerged from the heavy selling that sent global markets tumbling this year: Investors are getting nervous about the world’s biggest banks.

On February 10, 2016, however, European banking stocks had dramatic rises.  As of now, however, they have given back most of those gains as fears continue to simmer over the stability of the world’s biggest banks:

The banking sector staged a strong comeback on Wednesday,following sharp declines in recent sessions. Germany’s Deutsche Banksaw shares jump, closing up 10.2 percent, after a Financial Times report said the lender was considering buying back several billion euros of its debt, to soothe concerns about its funds.

Some experts say that the fears over the stability of global banks are overblown, and contend that banks are in far better shape than they were in 2008:

Analysts caution against doomsday scenarios, arguing banks are in much better shape than in

But today, February 11, 2016, stocks continue on their downward trajectory while investors look for a safe place to wait out the plunge:

Stock indexes worldwide tumbled on Thursday on fears over the health of the global economy, with banking shares slumping on both sides of the Atlantic, while safe-haven 10-year Treasury yields hit their lowest since 2012.

 

It does not seem like investors are buying the argument that the “fundamentals” are “strong.”  Full me twice, I suppose.

Meanwhile, concerns over just how bad the Chinese slowdown might get continue to grow:

A Chinese credit crisis would see the country’s banks rack up losses 400 percent larger than the hit U.S. banks took during the subprime mortgage crisis, storied hedge fund manager Kyle Bass has warned in a letter to investors.