BRIC Currency Crisis Bad for Indian Banking Stocks?

Weakness in the Indian #Rupee will most often translate into weakness for the Indian banking space as potential hawkishness forced on the #RBI in defense of the Rupee could hurt bank margins. The Rupee has weakened considerably since Russia raised interest rates to defend the slumping Ruble and more recently with China devaluing the Yuan.

Recent  topping action in the bank index could suggest a possible sell off in this space in anticipation of further Rupee weakness and potential hawkishness from the RBI. Just going back to August 2013 banks corrected over 30% when the Rupee fell to over 68 Rupees to the dollar and the RBI embarked on some serious tightening raising the overnight lending rate from 7% to 9%.

BRIC currency crisis bad for Indian banking stocks? http://t.co/SFzBN5BwiL pic.twitter.com/GvUnswEwGO

— samuelR (@RajveerRawlin) September 7, 2015

The dominoes keep falling one after another

Lets take a look at a few charts courtesy yahoo finance and market watch.com. First we started with the well over 95% crash in the Baltic dry index (#bdi).

Then we had a over 40% plunge in #gold and #silver prices as symbolized by the respective ETF's:




This was matched by over a 40% plunge in base metals:



Followed by the dramatic over 50% plunge in #oil:


This has translated into a rout in the junk bond market:

Which will most certainly nail banks which have exposure to this toxic stuff:


No surprise then at the flight to quality bid emerging in US treasuries and the #dollar:




And carry trade liquidation should start any moment with a bid for the Japanese #Yen:


All in all we have sown the seeds for the great depression of the 21 st century and the U.S Fed and its fellow central banks can do absolutely nothing about it.

The dominoes Keep falling one by one http://t.co/lfL8gIu1o2 pic.twitter.com/wAkJpkNixp

— samuelR (@RajveerRawlin) September 8, 2015

Deflation to trigger junk bond rout?

The deflationary collapse of oil is clearly threatening to take down other risky asset classes with it, most notably of late the junk bond market


the makings of a brand new financial crisis!

Collapsing Oil price flat out deflationary

The recent 40% decline in oil the past 6 months is flat out deflationary. Look at the popularly traded oil ETF. This taken together with the collapse in other industrial commodities has generated a major deflationary signal. The collapse in the Euro also lends further support to the deflationary theme emerging.




The last time oil approached it's cost of production was just before the financial crisis of 2008. Just a matter of time before the collapse in gold, silver, copper, oil and other industrially sensitive commodities spreads to other risky asset classes like stocks.