{"id":7821,"date":"2016-07-02T09:08:37","date_gmt":"2016-07-02T03:38:37","guid":{"rendered":"http:\/\/patriotsforumindia.com\/?p=7821"},"modified":"2016-07-02T09:14:00","modified_gmt":"2016-07-02T03:44:00","slug":"forget-brexit-europe-has-a-much-bigger-problem","status":"publish","type":"post","link":"https:\/\/patriotsforumindia.com\/?p=7821","title":{"rendered":"Forget Brexit!! : Europe Has a MUCH Bigger Problem"},"content":{"rendered":"

Forget Brexit!!
Europe Has a MUCH Bigger Problem<\/h2>\n

By Harry S. Dent Jr., Senior Editor, Economy & Markets<\/em><\/h4>\n
\"Editor\"The Dow dropped nearly 1,000 points (5%) and the London FTSE dropped 10% after the Brexit vote surprised the markets on June 23. After two days though, markets were marching back up again.

That\u2019s just like markets on \u201ccrack!\u201d They react to political events, but totally miss the fundamentals.

Yes, Brexit is important. Years from now it will be recognized as the beginning of the end for the great Eurozone experiment.

It isn\u2019t just about the renegotiations on trade agreements with Britain and initial slowing of GDP. It\u2019s also about the threat that more countries will choose to exit the economic bloc. The euro and Eurozone have 40%-plus unfavorable ratings in polls in France, the Netherlands and Italy. That many areas within <\/em>countries will break free of their overlord. And then this rush for nationalism will spread across the globe like wildfire.

But here\u2019s the 800-pound elephant in the room (I talked about this in detail in the February issue of The Leading Edge<\/i>).<\/a> The one Wall Street seems blind to at the moment\u2026<\/div>\n
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The Most Important Financial Event of 2016<\/span><\/a>

This October, Harry Dent and the entire Dent Research team are gathering in Palm Beach, Florida for the annual Irrational Economic Summit.

At Dent Research\u2019s premier event of the year, you\u2019ll have the chance to hear from a panel of 15+ financial gurus on how to thrive in the years ahead.

And for a limited time, you can reserve your seat at an early-bird rate. Click here<\/a> to register now.<\/div>\n
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Italy is the next Greece!

It\u2019s bad \u2013 non-performing bank loans have risen to 18%.

At 10%, most banks are technically bankrupt. That\u2019s the percentage of capital and pledged deposits they have against bad loans. Our<\/em> pledged deposits, not theirs.

At 18%, they\u2019re no longer \u201ctechnically\u201d bankrupt. They ARE bankrupt!

Greece still has bad or non-performing bank loans of 34%, Ireland 19% and Portugal 12%. And we haven\u2019t seen the next serious financial crisis yet.

Yet nothing has been done to seriously restructure debt in southern Europe. The EU just bailed out Greece to stop the dominoes from hitting other countries. They\u2019re pumping in heavy doses of QE to keep the banks and economy temporarily liquid and solvent.

But the problems are growing even worse. The blood is getting harder to hide\u2026

Just look at Deutsche Bank. It had its largest loss in history in the fourth quarter of 2015: $7 trillion, without any help from the next financial crisis!

Its stock is now down 89% from its early 2008 high, and 62% from its 2015 high.<\/div>\n
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See larger image<\/a><\/div>\n
It\u2019s the largest bank in Germany.

<\/em>Why is Wall Street ignoring this!?

UniCredit is the largest bank in Italy. Its<\/em> stock is down 94% since the 2008 high, and 71% since its 2015 high.

Banca Carige, another major Italian bank, is down over 99% from its high in 2008.

HSBC in the UK lost 15% since Brexit, while the Royal Bank of Scotland dropped 40% and Barclays bled 41%.

Investors in these stocks are suffering tortures no investor should ever endure. And there\u2019s more pain to come.

Depositors in these banks are willingly settling their heads into the guillotine!

But here is the worst part…

To raise capital after the 2008 global financial crisis, Deutsche Bank issued CoCo bonds. They didn\u2019t want to dilute their shareholders or their senior bond holders, so they issued a new B.S. bond that ranked just below senior level. But \u2013 and this is a pretty significant \u201cbut\u201d \u2013 the 6% coupon only gets paid if<\/em> the bank has sufficient cash flow\u2026 and<\/em> any missed payments don\u2019t have to be made up. If they continue to miss payments, the bonds get converted to stock. And there\u2019s nothing the bond holder can do about it!

These should have been called Coo-Coo, not Co-Co, bonds!

The yields have now spiked above 12% and the bonds have been devalued substantially already\u2026

And again, we haven\u2019t even seen the next real financial crisis yet.

<\/em>If Deutsche Bank is in this<\/em> much trouble, you know many other major banks are.

Before the Brexit vote, most of these guys were trading at well below book value, while the broad markets trade at 2-times-plus book value. Italy\u2019s Banca Carige is trading at just 3% of book value. Citibank is at 54%, Spain\u2019s Banco Santander is at 58%, Deutsche Bank is at 59%, Credit Suisse is at 63%, and HSBC is trading at 69% of book value. Since then, they\u2019ve gotten worse.

And the bank with the highest exposure to the most leveraged and toxic of all assets \u2013 credit default swaps (largely mortgage derivatives) \u2013 is Deutsche Bank! It holds 10% of this $550 trillion nuclear bomb. Not billion. Not million. Trillion!

<\/em>At 10%, that means Deutsche Bank has $54.7 trillion credit default swamps on its books. JPMorgan isn\u2019t far behind, with $51.9 trillion. Citibank has $51.2 trillion, Goldman Sachs has $43.6 trillion and the Bank of America has $27.8 trillion.

Markets should be much more worried about the coming default in Italy.

They should be much more worried about the largest banks in the world failing\u2026 and they will fail.

Yet they seem more concerned about political factors like Brexit, or when Janet Yellen will raise the fed funds rate 0.25%.

Investors are going to get their asses handed to them.

Mark my words: a major collapse is bearing down on us. Don\u2019t be among the blind investors flattened when it arrives!<\/div>\n
\"\"<\/div>\n","protected":false},"excerpt":{"rendered":"

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