Deutsche bank in Trouble?

[JulieW]

Check the VIX. Nobody cares, or perhaps see no contagion risk.

 

[SteveS]

Check the VIX. Nobody cares, or perhaps see no contagion risk.

I know. Very strange, but then everything is these days. Maybe those 'in the know' reckon there's no way Merkel and Co will let DB fail, but if she bails them out, the pitchforks will be out in Greece.

 

[GoldenEye]

Check the VIX. Nobody cares, or perhaps see no contagion risk.

Seems strange if such a huge bank is on the verge of failing and the stock market also seems unaffected. We could have it wrong, but I sold a pile of shares as a precaution.

 

[JulieW]

Interesting blog post on jsmineset.com by Jim Sinclair in his usual gruff brevity.

Posted September 26th, 2016 at 10:21 AM (CST) by Jim Sinclair & filed under In The News.

Stockman was on fox business this [Saturday] morning

Sounded somewhat panicked

Says the whole market is held up by half a dozen robo machines

When asked what he recommended to investors

He said

Get out Monday

But the Vix is steady.

Is this worth a coin toss?

 

[SilverDJ]

Australia won't get off so lightly next time. There is no money in the piggy bank and private debt is running at a staggering 160% of GDP, making Australia the world's No 1 for household debt.

Bring it on, I'm debt free

 

[Old Codger]

Is Max still talking through his nose?

OC

 

[errol43]

Maybe?^^^^but Yellin is talking through her ass.

Regards Errol 43

 

[SpacePete]

Rally!

Deutsche Bank shares were higher by nearly 3 percent by 10.00 a.m. London time. They pared some gains, but closed over 2 percent higher. This helped the DAX to post solid gains and close 0.8 percent higher, as well as aiding financial stocks and the pan-European benchmarks.

 

[SpacePete]

Don't worry, I'm sure everything is fine, the banks are sound and it's never been a better time to put your money in the markets.

1927 "We will not have any more crashes in our time." John Maynard Keynes

Apr 13, 1928: The N.Y.S.E. introduces new and improved high-speed tickers. The devices can print 500 characters per minute, almost twice as fast as the earlier models.

Mar 4, 1929: President Herbert Hoover is inaugurated. Nicknamed "The Great Engineer"

Mar 25, 1929: Federal Reserve warns of excessive speculation.

Spring, 1929: The American economy shows ominous signs of trouble. Steel production is declining, construction is sluggish, car sales are down, and consumers are building up high debts because of easy credit. Yet the stock market continues its upward momentum, heedless of real economic indicators.

May 14, 1929: The NY Stock Exchange opens a new bond room, adding 6,000 feet to the trading floor.

Summer, 1929: The market continues to rebound, and stocks hit record levels month after month.

Sept 1929: "There is no cause to worry. The high tide of prosperity will continue." ~ Andrew W. Mellon, Secretary of the Treasury


Sept 20, 1929: The London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery

Oct 24 1929: Black Thursday. The stock market falls 11%. A pool of bankers acts to stem the drop by putting more money into the market, and President Hoover reassures Americans that U.S. business is sound. Within a few days, a headline will read, "Brokers Believe Worst is Over and Recommend Buying of Real Bargains."

Oct 25, 1929: "We feel that fundamentally Wall Street is sound ... good stocks are cheap at these prices." Market-letter in The New York Times

Oct 28, 1929: Black Monday. The stock market falls 22.6%, the highest one-day decline in U.S. history. The crash triggers similar declines in markets around the world.

Oct 29, 1929: Black Tuesday. Panic sets in as investors all try to sell their stocks at once.


Dec 5, 1929: "The Governments business is in sound condition." Andrew W. Mellon, Secretary of the Treasury

Jan 21, 1930: "Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said that reports to the Cabinet showed the tide of employment had changed in the right direction."

Feb 1930: "There is nothing in the situation to be disturbed about." - Secretary of the Treasury Andrew Mellon

May 1, 1930 "I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover." President Hoover

Jun 1930: "The worst is over without a doubt." James J. Davis Secretary of Labor.

Jun 1930: "Gentleman ... The depression is over." - President Herbert Hoover

1933 "All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S." - President F.D. Roosevelt

 

[leo25]

Check the VIX. Nobody cares, or perhaps see no contagion risk.

Seems strange if such a huge bank is on the verge of failing and the stock market also seems unaffected. We could have it wrong, but I sold a pile of shares as a precaution.

Not really strange, just how markets are today. People generally believe there is no risk anymore and governments/ center banks will always fix everything. Got to love the simple-minded.

 

[SilverDJ]

Rally!

Deutsche Bank shares were higher by nearly 3 percent by 10.00 a.m. London time. They pared some gains, but closed over 2 percent higher. This helped the DAX to post solid gains and close 0.8 percent higher, as well as aiding financial stocks and the pan-European benchmarks.

Who would buy into this turkey?

 

[Ipv6Ready]

Rally!

Deutsche Bank shares were higher by nearly 3 percent by 10.00 a.m. London time. They pared some gains, but closed over 2 percent higher. This helped the DAX to post solid gains and close 0.8 percent higher, as well as aiding financial stocks and the pan-European benchmarks.

Who would buy into this turkey?

If German government allowed Deutsche Bank to charge customers fees like Australia, I would be in like flynn. Having said that it could be a good long shot bet for lazy money. The current trouble is all about the 14b fine, once that blows over they will go back up.

 

[SpacePete]

Europe's problems with some of its largest financial institutions could spill over into the rest of the global market.

Deutsche Bank's shares tumbled on Thursday on a report that a group of hedge funds were reducing their exposure to the giant financial institution

"All it takes is for one of the big [banks] to suddenly topple. The flow of credit would freeze up instantly. In an economic system that depends on credit, and whose lifeblood is credit, such an event is a financial crisis."

The chart shows that German banks, represented in black with a red border, have been among the worst decliners. Germany's second-largest bank, Commerzbank AG CBK, -5.69% is off 44% from its high, while Deutsche Bank is down more than 60% since its 52-week high.

On Thursday, prominent investor and founder of DoubleLine Capital Jeff Gundlach cautioned investors to stay away from Deutsche Bank.

http://www.marketwatch.com/story/a-...s-threatens-to-roil-global-markets-2016-09-28

 

[SpacePete]

Some positive news for Deutsche: they don't look as bad as Lehman did. That's setting the bar rather low however.

Deutsche Bank Looks Better Than Lehman Did But Counterparty Risk Remains An Issue

Deutsche Bank's U.S. shares hit a new 52-week low in afternoon trading Thursday on the heels of a Bloomberg report that hedge funds had begun pulling derivatives positions with the German banking colossus. While it is very important to note the context of the Bloomberg reportstating "about 10" of the bank's "more than 200" derivatives clients have moved "part of their holdings"there is no doubt that counterparty risk is the most important factor at Deutsche now. Not credit risk at Deutsche's counterparties, but Deutsche's suitability as a counterparty for its own clients.

If this trickle of derivative funds becomes a tidal wave and shifts to other areas of the bank's balance sheet then Deutsche could truly become a troubled institution. As shown by the stock chart some market participants obviously believe that has already happened. Some sort of resolution to the U.S. Department of Justice's recent claim of $14 billion from Deutsche for mortgage-related infractions in the mid-2000s would also be necessary for Deutsche's stock to regain any balance, but, again, the stock market is telling us it is not optimistic on that front.

So, the market is pricing in continuing market share losses at Deutsche, which would obviously lead to lower profitability. Deutsche's net income for the first half of 2016 was 20 million euros versus net profit of 818 million euros in the first half of 2015, and looking at the stock price, obviously some are predicting a continued erosion and likely red figures at the net level.

The Bloomberg report tanked the U.S. stock market, but, again context is important, and one has to differentiate between a potential "Lehman moment" and a creaky old bank that is having difficulty finding focus.

Deutsche is not Lehman for one simple reason: its balance sheet is strong.

More: http://www.forbes.com/sites/greatsp...nterparty-risk-remains-an-issue/#641221192e28