Losses Pile Up at the Barclays Center of the Universe

In light of the Brexit vote and, more importantly for market players, the subsequent reaction by equities, the giant European banks continue to represent systemic risks in such a way we have not seen in years.

Three of the main ones: BCS CS DB, are all getting drilled again this morning. We are not talking about 2-5% pullback, either. Instead, we are witnessing heavy duty selling ranging from 7-20%, or more. 

CS and DB are printing all-time lows, while Barclays is down more than 20% as I write this. 

Moreover, to see the VIX hover in the mid-20s may be a sign of looming complacency by the market with respect to the havoc the stress these banks are facing may soon cause. 

Turning the long-term BCS chart, below, a retest of the prior 2008/9 low around $3 cannot be ruled out, especially given that CS and DB already took out their own lows. 

Like it or not, the market has decided that the concerns in Europe and Forex land now matter more than whether a basket of software plays are executing on a micro level. When the market changes character so, too, must we roll with those punches and adjust accordingly.