Banks shares were massacred across the board around Europe yesterday, as a general feeling that the Stress Tests were not strict enough, designed more to assure markets that all is well in the Banking industry, than rooting out publicly the "rotten apples".

In the UK, Barclays and Lloyds lost a huge 7% plus with the RBS down over 6%. The HSBC escaped the bloodbath but not completely, losing 1.5% only, with the current negative trait in the equity markets unchanged, the Footise giving up 1.5%.

The backdrop to this negativity is the spectre of a possible US default, as no headway is currently being made by Obama, negotiating a borrowing package that needs to be passed into law by August 2nd. Though a default  is very unlikely to happen and would plunge world markets into chaos, time is running out.

When gold starts to hit record prices, it is clear that investors are running for the hills as far as equitites are concerned and a loss in financial shares of more than 7% in one day, will scare all but the short term traders looking for a fast profit.