Credit Suisse is about to be be bailed out (again) by the Swiss National Bank. Oil has decoupled from gold as a possible risk hedge, on plunging yields and U.S. Dollar. Will Central Banks begin asset buying programs and start their money printing once again? Inflation is still elevated at 6% with full employment. This is not like 2008.

Chart 1

Chart 2

Oil has detached itself from Gold as a hedge on possible systemic risks, as the market is pricing in a wider banking crisis after Credit Suisse was denied a funding boost from the Saudi National Bank.  Which was most likely providing extra liquidity for a bailout before an actual bailout, meaning credit markets are showing signs of 2008 disfunction when mortgage markets in the U.S. blew up and credit spreads widened.   Interest rates were probably the primer to this crisis, showing up how ill equipped banks have been in-rebalancing their balance sheets and portfolios in the face of inflation.  Instead they have been calling for a U.S. recession and forecasting that rates will pause and be cut in 2023.   Be careful for what you wish for, as the debt/collateralized market has imploded, with a lot of it attached to NASDAQ speculation, more so crypto/tech start ups which are unwinding at a rapid rate.  This is a bank-run by banks on banks, not the average person in the street.   

The Chart 1 above shows the decoupling of oil from gold as both hedges on risk, now oversold collapsing through its supports (green horizontal line/s) of 72 and 69.

Chart 2 is very telling of the distortion in not just the bond markets but FX as well, more so safe havens.  Refer to the U.S. Dollar, YEN and Swiss futures.   With the USD under pressure, trailing the rate sensitive 2 YR and 10 YR yields, which have gone south on bond buying, thus dragging the USD down with it - and also the oil price.  Which could end up being mispriced, assuming inflation is falling rapidly, when it is not.   The YEN, that lost its safe haven status due to Japan's fiscal basket case policies, based on bizarre monetary actions aimed at balancing deflation with inflation; without lifting rates.  Is bid over the USD, yet the Swiss Franc, a once safe haven is selling off, with the behemoth Credit Suisse, whose market cap is valued at $6.7 billion, with generated revenue at over a Trillion.   Is about to be bailed out by the Swiss National Bank again at 50 Billion Francs, in 2008 when the mortgage crisis hit the Credit Suisse it was 60 Billion.  The vertical blue lines on Chart 2, represent the Silicon Valley Bank bankruptcy and the beginning of the Credit Suisse write-downs.

The problem here and it is more than just a conundrum, is that the economy is at full employment, with inflation still running high at 6%.  Very different to the credit crisis of 2008.  Central Banks are truly stuck.  The can pause rates and begin accumulating toxic assets of most investment/commercial banks, which is a form of money printing.  Hope that food and energy costs start to trend down over the Northern Hemisphere Spring/Summer.  With more hope that oil stays depressed under $70, yet we may not see operational/refinery costs dip at all, which will be passed on at the pump.   As the oil industry had lifted it profit margins in lieu of higher revenue i.e new exploration projects/costs.

Will Central Banks rev up their money printers back up again?  Or allow several bank failures? 

Not many options left.

Dark clouds on the horizon for this one.