The forecast this week for equities, and bonds for that matter, is partly to mostly sunny with occasional earnings misses and “talked-down” forward guidance casting the only clouds on the landscape.
The Fed advertising their intent to backstop markets by cutting rates is by now old news.
It’s almost a stated guarantee that we’ll see a quarter point cut out of the July 30-31 meeting minutes.
Then there’s the prospect of a September cut. Fed Funds futures are pointing to that as more than likely.
Not a bad background from which to paint a rosy picture.
But there’s more…
No, Deutsche Bank, Germany’s largest bank, hasn’t failed, as in going out of business and being shut down.
But it has failed in every other sense of the word.
What happened to Deutsche Bank is a warning.
It’s not a warning for how greedy bankers blow themselves up, though it is about that.
It’s not a warning against how easily compliance can be circumvented, though it is about that.
It’s not a warning of what one giant bank’s “failures” can do to banking across a country or Union, though it is about that.
Ultimately, Deutsche Bank’s failures are a warning about how central banks cover up failure and how dangerous they are…