The Bank Crash of 2016…
In August of 2008 when I had a crude idea of what Stocktwits would be and Stocktwits was a Tumblr account, the ‘FAZmobile’ was born.
My friend Joe who is happy to trade from the short side would call on the ‘FAZmobile’ when he thought the banks would fall. FAZ or $FAZ as the ticker it goes by, is a ‘3 times leveraged bearish ETF’ designed by cocaine friendly marketers at Direxion and approved by the SEC who is all for small traders imploding (sarcasm).
By March 2009, $FAZ had climbed to over $5,000
Flash forward to 2016 and the ‘FAZmobile’ is back. I am not sure how long it stays cool, but it could get real interesting over the next 90 days.
One fun fact about the stock/ticker…while it has already doubled this year, it is only back to $60 (see chart above). Yes it’s down 99 percent.
So why is the ‘FAZ’ cool again?
In the past 3 months, Bank of America has given back three years of gains.
Deutsche Bank is at all-time lows and bloated with derivative risks. The weight of the world seems to be pressing down on the stock at this point.
All the Banks (Citibank, Goldman, JP Morgan) are now down in price since November 2009 and US Treasuries are up 56 percent.
Here is how it has worked since we started ‘quantitative easings’ in 2008 (QE1,2,3):
1. We pay taxes;
2. The government gives our tax money money plus more that they print to the banks;
3. Banks hoard cash, pay bonuses and fines back to the government…complain about regulation ‘natch’;
4. Big money follows the ‘don’t fight the fed until 2015 but mostly just buys US treasuries;
5. Banks sell more crap like MLP’s and insurance products because they have huge staffs of MBA number crunchers and no soul.
6. Banks crash (In process)
Not sure how it really ends, but I can imagine Jamie Dimon in front of Congress in 2018 saying they thought that ‘Oil’ and ‘The Cloud’ were the same thing.