Worrisome: Japan Bank Stocks Plummeting

Get to the bank this morning and get yourself SOME cash money. Not for paying bills; but to survive.  Money to pay for food, medicine, and fuel. Bank shares tanked across the globe on Friday as fears of a recession swept through markets in the wake of U.S. President Donald Trump announcing the highest tariff walls in a century. Japan Banks are hit hard.

(Hal Turner Remark: This is the largest decline in 40 years. Shit is hitting the fan. Could have full blown financial crisis by next week.)

Mitsubishi UFJ Financial Group, (MUFG, 8306.T) fell 8.5% on Friday for a weekly loss of 20%

Mizuho Financial Group (MFG, 8411.T) fell 11% on Friday and more than 22% for the week

Sumitomo Mitsui Financial Group (SMFG, 8316.T) slid 8% on the day and more than 20% for the week

European banking stocks had tanked 10% by 1100 GMT and the financials sector was the biggest faller in the STOXX Europe 600.

BIGGESST BANK LOSSES SINCE 2008

In Asia, Japanese megabanks ended the week with the biggest losses since the financial crisis of 2008 in one of the markets' most unsettling signals so far about the consequences of Trump's trade war.

Banks, as barometers of growth, are seeing their shares hammered as the U.S. breaks with the free trade order that it built up over decades. Investors are bracing for falling spending, a sharp decline in loan demand and deal volumes to crater.

"Bank stock valuations tell us investors are leaning toward the bear case for banks becoming a reality," according to Raymond James, pointing to investor expectations for a recession in 2025.

U.S. banks also extended declines in premarket trade, after crumbling to their lowest in months on Thursday. JPMorgan Chase fell 4%. Wall Street powerhouses Goldman Sachs and Morgan Stanley fell 3% and 4%, respectively.

A universal 10% tariff on U.S. imports is set to take effect on April 5, followed by further levies on dozens of countries as Washington erects the steepest trade barriers in more than 100 years.

Mounting fears of retaliation, which Trump officials have warned could escalate the dispute further, have also led some to shorten their odds on a recession coming to pass.

China's finance ministry said on Friday it will impose additional tariffs of 34% on all U.S. goods from April 10.

The drop in shares is a sharp reversal for the banking sector, which a few months ago was riding high on post-election optimism. While the tariffs don't hit banks head-on, they may prompt companies to pause M&A plans and erode consumer sentiment, which can ultimately hit investment banking fees and slow loan demand.

Fitch Ratings' head of North American Banks Christopher Wolfe said that banks may have to start setting aside bigger provisions for potential loan defaults, especially if tariffs stay in place for a prolonged period.  This is going to start triggering the CDS (Credit Default Swaps), which implicates . . .  derivatives!

Starting next week, U.S. banks will offer insights into their strategies for navigating the turmoil, with JPMorgan, Morgan Stanley, Wells Fargo and BNY set to kick-off the earnings season.