Negative Interest Rates Destroying World Economy: “Doom-and-Gloom Outlook for Banks in Europe”
Trying to simply hold onto the standard that you’ve got has become a new normal for financial challenges.
Equity erodes away when interest rates go negative… then everything starts to sour.
China’s economy and stock market are effectively in the toilet, or poised to further collapse the next time anything big happens in Europe or the United States, and perhaps any part of the world.
The U.S. stock market has become jumpy and prone to collapse as well, and all major markets are now global, and trip up anytime the string tied around their ankle is yanked from across the ocean. And collapsing oil prices are adding huge pressures to everything.
Now Europe banks are at the brink. Will it be enough to set off the major crisis everyone has been warning about?
Via MarketWatch:
Europe’s bank index has posted its longest weekly string of losses since 2008 […] the Stoxx Europe 600 Banks Index has logged six straight weeks of declines.
Lackluster profits and negative interest rates, have prompted investors to dump shares in the sector that was touted as one of the best investment ideas just a few months ago.
[…]
The negative interest rates set by the ECB means that banks effectively have to pay to have cash on their balance sheets, while at the same time getting squeezed on their net interest margins. Debt levels are already really high on the continent, which means further loan growth is expected to be low, he said.
Negative interest rates, a result of the overkill of quantitative easing at the Federal Reserve, is plenty enough rope for all involved to hang themselves. The desperate and poor will fall as a result of borrowing too much on easy credit, and the richer and better off will fall as a result of declining returns and falling standards for income.
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