From Wolf Richter at Wolf Street:

Healthy big banks would get over Brexit and the political turmoil it is spawning, particularly non-UK banks. But there are no healthy big banks in Europe. And non-UK banks are crashing just as hard, and some harder. This is about a banking crisis morphing into a financial crisis.

These bank stocks got crushed on Friday. And they got crushed again today. Italian banks have been reduced to penny stocks. Spanish banks are getting closer. Commerzbank, Germany’s second largest bank, and still partially owned by the German government as a consequence of the last bailout, is well on the way.

The two-day losses are just breathtaking.

A couple of examples:

Deutsche Bank’s infamous CoCo bonds deserve a special word. These hybrid bonds that are just above equity on the capital totem pole had spiraled down, with the 6% CoCos hitting 70 cents on the euro in February.

And Italy:

In Italy, the banking crisis that has been growing for years has reduced all major Italian banks to penny stocks. It has triggered bailouts of some banks, including the third largest publicly traded bank, Banca Monte dei Paschi di Siena. Now the taxpayer is going to get shanghaied into bailing them out to put a floor under the collapsing share prices and prevent them from going to zero

American banks took a hit:

Contagion is infecting US banking stocks. As I’m writing this, Goldman Sachs is down -1.2%, Wells Fargo -1.3%, JPMorgan -3.1%, Morgan Stanley -3.3%, Citibank -4.1%, and Bank of American -6.1%.

These wounds among US banks are just cosmetic compared to the bank massacre happening in Europe, where the ECB is now fully engaged in trying to deal with a Financial Crisis under the cover of Brexit Chaos. Read… ECB Blows €400bn on “Brexit Black Friday” Bank Bailouts

400bn pounds sounds like a pretty large bailout. If you want to read the link to that last sentence go pay Wolf a visit: http://wolfstreet.com/2016/06/27/european-banks-get-crushed-worst-2-day-...