It's tough to go down more than the 3% that Britain was down, as they are the epicenter of this, not us. But the complacency of today's opening was too much for me. Now we are getting more realistic.
Let's not be glib. I am not worried about systemic risk here. Our banks have never been stronger. Our companies are flush with cash. The world will grow more slowly than it is now and our companies will be ready for that. We will be the safe haven.
But here's what I am worried about -- European banks. Lloyds (LYG) is off 24%, Royal Bank of Scotland (RBS) has lost 22%, Barclays (BCS) is down 20%, Deutsche Bank (DB) has dropped 16% and Credit Suisse (CS) has shed 15%. That's very disconcerting.
These moves are ugly, and they aren't the type of thing that happens in a vacuum. This is what you should pay attention to, not our banks or our industrials or anything else except oil and interest rates. (The former is bad for the bull and the latter is terrible for the banks.)
This is a distinctly subpar situation.