* It was Turnaround Tuesday in the global financial markets as stocks are recovering from 2 days of carnage following the surprise Brexit vote in the U.K.

* The Dow was up almost 270 points today, NASDAQ up about 97

* But really the markets got beaten up the last couple days

* The smallest bounce was from the banks, which have been beaten up the most

* So they had the biggest drop and the smallest bounce

* Which really shows you how weak that sector is

* It couldn't even manage much of a dead cat bounce

* In fact, the carnage in, particularly the European banks is much bigger than it was during the financial crisis of '08

* This really shows you how much more levered up the banking system must be, thanks to all these years of QE and negative interest rates

* And of course, how much farther behind can the American banks be from their European cousins?

* U.S bank stocks, too, were hitting 52-week lows yesterday

* I still think there's a lot of carnage coming

* Some banks may be in a position where they are going to have to raise equity, which means they'll have to sell stock

* Clearly the market is not going to like that

* But again, everybody is blaming this on all the uncertainty surrounding Brexit

* To me, if we had a healthy financial system, if the markets were sound, and prices were based on fundamentals

* Would it really make that much of a difference if the UK were in the EU or not?

* What is being revealed here is the fragility of the whole system that is being propped up artificially by the banks

* By cheap money, low interest rates - everybody is speculating

* And everybody is assuming that the powers that be, whether it is the politicians, the governments or the central banks have everything under control

* It's a big put out there and nothing can go wrong

* And then when something does go wrong, then people get nervous

* The wake up and say, "Wait a minute! Maybe it's not as safe as we thought!"


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