So let’s look at the euro banks. What does it tell us about this global economy?
Deutsche Bank two weeks ago fired Anshu Jain and Juergen Fitschen its former co-CEO.
On Wednesday Barclays Chief Executive Antony Jenkins was ousted after the board decided fresh blood is needed after three lackluster years with Jenkins leading the bank.
This tells me that the euro-centric banks are in more trouble than anyone cares to admit. With Greek debt about to become a greater liability to all the banks balance sheets, despite protestations that contagion is ring-fenced, there will be pain.
Can we extrapolate that Barclays and Deutsche have large exposure? My spidey senses say yes. These managers did not ring-fence their exposure, therefore they must go.
Remember Barclays took on Lehman Bros. after the bankruptcy and has been dinged multiple times by EU, British and US regulators for Libor and other market rigging charges.
This may be a big part of the reason the Trioka has been kicking the Greek can down the road and probably will continue to do so.
Christine Lagarde of the IMF came out again on Tuesday to admonish the US about an interest rate rise in the US again.
Doesn’t this woman have enough on her plate with Greece?
Something tells me that the back-channel discussions between Fed chief Janet Yellen and Lagarde are not going well.
Yellen and her Fed cohorts are trying to temper the stock and bond bubbles by jawboning a Sept. rise, which must be of grave concern for Lagarde.
Could the IMF chief see something in the derivative market — her expertise — that could implode the system which Yellen & Co. are missing?
For Lagarde to come out twice in two weeks with protestations on a Fed move — when this is usually handled out of the public’s eye — seems to suggest such a circumstance.