The bottom of the market really fell out in the last few minutes and some worrisome developments are unfolding beneath the surface. If you’ll recall back in 2008 one of the more disturbing trends was the illiquid banking system. Well, the short-term indicators of bank liquidity are all blowing out today. Now, they’re nowhere near the levels they were in 2008, but we’ve seen this every time a major global liquidity concern has emerged over the last few years.
As the problems in Spain and Italy unfold it will be important to keep an eye on these gauges. Not good signs at all.