CDS on the Debt of Australian Banks on the Move

Below you find a brief update of the most important CDS charts we usually keep an eye on.  We decided to increase the frequency of these chart updates to give readers the opportunity to stay abreast of what is happening in these markets now that they have broken top new highs and are consequently at a critical juncture. It doesn't happen all that often that most of Europe sees its credit risk priced at banana republic levels.

 

A comprehensive commentary will come out again soon. In the meantime, we want to point out that there have been two recent movers that really caught our eye: CDS on Japanese JGB's and CDS on the senior debt of Australia's 'Big Four' banks, which have shot up in the new year like a bat out of hell.

We strongly recommend watching for signs of a prospective  funding problem for Australia's banks.

They are exposed to one of the most egregious housing bubbles ever  – and they receive most of their short term funding (to the tune of nearly $400m.) from overseas sources. This is a potentially highly explosive situation.


Charts

– prices in basis points, color-coded:


 

5 year CDS spreads on Portugal, Italy, Greece and Spain – once again, all except Italy's move to a new crisis high – click for higher resolution.

 


 

5 year CDS spreads on Ireland's sovereign debt, Bank of Ireland's senior debt, France and Japanese sovereign debt. All at either new record highs or new highs for the move. A big move recently in CDS on Japanese debt – the absolute level at about 79 basis points is still fairly low, but high for a major industrialized nation – and they have nearly doubled from this year's lows – click for higher resolution.

 


 

5 year CDS on Romania, Hungary, Austria and Belgium – with the exception of Romania, yet another set of new highs – click for higher resolution.

 


 

The Markit SovX index of CDS on 19 Western European sovereigns – yet another new all time high – click for higher resolution.

 


 

5 year CDS on Australia's 'Big Four' banks. A rocket ride higher so far in the new year. This needs to be watched very carefully – we regard credit risk pricing on Australia's banks as a 'canary in the coal mine'. Spreads have yet to best the highs seen at various junctures in 2010, but it seems that this recent move from a higher low could be 'it' – click for higher resolution.

 


 

The SPX, T.R.'s proprietary VIX-based volatility indicator and the gold-silver and gold-commodities ratios. No sell signal just yet, but getting close – click for higher resolution.

 

Charts by:Bloomberg


 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • The Triumph of Madness
      Historic Misjudgments in Hindsight Viewing the past through the lens of history is unfair to the participants.  Missteps are too obvious.  Failures are too abundant.  Vanities are too absurd.  The benefit of hindsight often renders the participants mere imbeciles on parade.   The moment Custer realized things were not going exactly as planned. [PT]   Was George Armstrong Custer really just an arrogant Lieutenant Colonel who led his men to massacre at Little...
  • The Secret to Fun and Easy Stock Market Riches
      Post Hoc Fallacy On Tuesday, at the precise moment Federal Reserve Chairman Jay Powell commenced delivering his semiannual monetary policy report to the House Financial Services Committee, something unpleasant happened. The Dow Jones Industrial Average (DJIA) didn't go up. Rather, it went down.   The Fed chair and His Magnificence, God Emperor, Field Marshall & Stable Genius, POTUS Donald J. Trump: a complicated relationship. [PT]   Were the DJIA...
  • The Constitution IS the Crisis
      A Review of Murray N. Rothbard’s Conceived in Liberty, Vol. 5 Holy Writ The posthumous release of Murray Rothbard’s fifth volume of his early American history series, Conceived in Liberty, is a cause of celebration not only for those interested in the country’s constitutional period, but also for the present day as the nation is faced with acute social, economic, and political crises.   Murray Rothbard, the foremost representative of the “American branch” of the...
  • A Pharmaceutical Stock That Is Often Particularly Strong At This Time Of The Year
      An Example of Strong Single Stock Seasonality Many individual stocks exhibits phases of seasonal strength. Being invested in these phases is therefore an especially promising strategy.   Danish drug company Novo Nordisk   Today I want to introduce you to a stock that tends to advance particularly strongly at this time of the year: Novo Nordisk. The Danish pharmaceutical group supplies a broad range of products and is a global market leader in diabetes...

Support Acting Man

Austrian Theory and Investment

j9TJzzN

The Review Insider

Archive

Dog Blow

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

Mish Talk

     
    Buy Silver Now!
     
    Buy Gold Now!