Well, it's that time again to talk about the Spanish banks (I could talk about all banks in Europe but I'll choose Spain since I know it better and they are the worst).
The Spanish summer of tourist revenues was cut short and was very bad over all. The window of opportunity to
rebuild cash flows for business and households has passed. COVID complications will cause more economic pain and The Insolvency will become prevalent over the autumn and winter.
Last week the EU gave $73bn in help for the EU banks but that failed - they are down 14% since then.
But in Spain... yikes. Banco Sabadell is about to break key support
Santander is a total shit show...
It is about to take out its ALL TIME LOW, set back in 1992.
BBVA looks equally bad...
And remember the Cliff of Death? Its down over 50% since breaching that...
The merger of Caixa and Bankia just turns an ok bank into a shit bank. I still continue to fear that a large part of the equity of the EU banks is going to zero and ends up in state hands.
Meanwhile, the Ibex looks like a horror story...
It doesn't feel like the right time to be record-long the Euro... but that is the markets position, or therein there-a-bouts.
Welcome to The Insolvency.
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A bit of shade being thrown about the Banana Zone. Let me clarify...
Macro Summer and Fall are driven by the global liquidity cycle that exhibits clear cyclicality since 2008.
Why since 2008? Well, back then the worlds all reset their interest payments to zero and they debt maturity to 3 to 4 years, creating a perfect macro cycle.
You can see the perfect cyclicality in ISM (the best guide to the business cycle)
Well, the genesis of ALL my thinking comes from Global Macro Investor, where @BittelJulien and I do our deep thinking each month (120 pages+).
I'm immensely proud of GMI and Ive been writing it for 20 years.... 1/
It is an expensive research service and is subscribed to by many of the world's largest hedge funds (usually the principals), SWF's, Asset managers, RIA's, Family Offices and HNW investors.
It also has the best proven and recorded track record of any research service...ever.
A 20-year track record of performance is not something that any other service provides.
My track record has many 100% plus years (thank you crypto!), many decent years, some so so and some bad ones. But it is all timestamped and transparent.
What is Macro/Crypto Summer and why does it matter?
Well, macro summer has started, its the part of The Everything Code cycle where the ISM picks up (GDP growth).... 1/
And that is driven by liquidity, which bottomed at the end of 2022... macro summer and fall are all about liquidity rising and is a core part of The Everything Code thesis...
And that, in turn, lifts tech stocks... they LOVE macro summer and fall...