It seems major events are ready to unfold and major games are being played right now to manipulate events and critical decisions that will have to be taken this week.
First we have Credit Suisse saying 66 European banks will fail the 3rd stress test, and
will need hundreds of billions in fresh capital, something the market
ignored entirely last week but that may be re-evaluated now that Germany is shattering the sweet dreams of business as usual with today's Schäuble and Merkel declaration. And few hours ago inexplicably, we have Deutsche
Bank warning that France may well be put on downgrade review by year
end.
"We highlight in this note that the French corporate sector is already financially stretched, with poor profitability and large borrowing requirements. We consider that the deterioration in economic conditions is now creating a distinct risk that France could be put under “negative watch” by the rating agencies before the end of this year. We think that France has the wherewithal to react to such an outcome and could avoid an outright downgrade by taking corrective measures quickly, but this naturally would be a very sensitive political decision a few months before a major election."
Why Credit Suisse or Deutsche Bank are starting to fore-say doom and gloom while putting at risk the recapitalization of banks all over Europe I have no idea. But something serious and dangerous is incoming.
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