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Today after many of UK's banks have lost more than 1/2 of their market cap, Moody's comes out and issues negative reports. Does this not remind you of 2006-2008 starting with Bear Stearns? But instead of Bear Stearns its Deutsche Bank $DB this go around. Now this may take 1.5 to 2 years to play out as it did in '08 but the same writing is on the walls. The same reasons are here as to why I left Bear Stearns just in time to short it from over $100 and it famously sold to JPM for $2.
Bonds are the key ingredient to bank earnings and as you can see with this bid ask spread (spread is where the bank makes their $$) has continued its downtrend from 2012. So we have no spread in stocks, no proprietary trading revenue because of Dodd-Frank, no IPO's and now no bond spreads. And we are to believe the market should be trading above its 2011/'12 highs?