Deutsche Bank is on the precipice...



POSTED BY Ed (17 mths ago)
I’m in Awe at How Fast Deutsche Bank is Coming Unglued

Deutsche Bank – “the most important net contributor to systemic risks,” as the IMF put it last week after a lag of several years – is having a rough time. Shares dropped 4.2% today to close at a new three-decade low of €11.63, down 48% since July 31 last year, lower even than the low during the doom-and-gloom days of the euro debt crisis and the Global Financial Crisis.

It’s not the only European bank in trouble. Credit Suisse dropped 1.7% today to CHF 9.92, another multi-decade low, down 63% since July 31. Other European banks are getting mauled too. The European Stoxx 600 banking index dropped 3% today to 117.69, approaching the Financial Crisis low of March 2009.

If July 31, 2015, keeps showing up, it’s because this was the propitious day when Draghi’s harebrained experiment with negative interest rates and massive QE came unglued, when European stocks, and particularly European bank stocks began to crash.



Ed (17 mths ago)
Deutsche Bank: World's most dangerous bank? - BBC News

Deutsche Bank shares hit a new record low today. Its value has halved since the beginning of the year.

So is it now the most dangerous bank in the world?

According to the International Monetary Fund - yes.

Last week, the IMF said that, of the banks big enough to bring the financial system crashing down, Deutsche Bank was the riskiest. Not only that, Deutsche Bank's US unit was one of only two of 33 big banks to fail tests of financial strength set by the US central bank earlier this year.

It's not hard to get scared when you look at a few numbers. Bear with me.

In simple terms any bank is worth the difference between what it's owed and what it owes. In the case of Deutsche Bank that means the difference between assets of 1.64 trillion euros (yes, trillion) and liabilities of 1.58 trillion euros. Its net value is 60 billion euros.

Sounds like a lot. BUT the value of what its owed doesn't need to move by much to wipe out its value completely.
'Financial apocalypse'

The IMF and the US central bank aren't the only ones who think Deutsche Bank is risky. The share price has fallen early 70% in the last year. In fact, you can buy the whole bank for 20bn euros - a third of what it's worth on paper. Other banks trade at a discount to their net worth but Deutsche Bank is by far the biggest.

For that reason, many people fear Deutsche Bank could be the first horseman of a new financial apocalypse.

This is a strange position for the one-time financial muscleman of European banking to find itself in. There are few German companies more associated with the post-war economic miracle than Deutsche Bank. Long before the European Central Bank existed, it worked hand in glove with the seemingly infallible Bundesbank to provide rock solid non-inflationary growth for decades.

For that reason, many people fear Deutsche Bank could be the first horseman of a new financial apocalypse.


Duracelll (16 mths ago)
While I am tempted, since you always get it wrong, I might give this one a miss.

Any more tip?

Ed (16 mths ago)
Deutsche Bank Profit Plunges 98% And The Worst Is Yet To Come

Ed (10 mths ago)
Deutsche Bank AG plans to cut as much as 17% of its equities staff and 6% of its fixed-income staff globally, with notices planned for many employees next week, according to people familiar with the matter.

Chief Executive John Cryan has said that the lender is cutting around 9,000 employees as part of broader efforts to reduce costs and pull back from businesses that have become too expensive under tighter regulations. The latest cuts are part of that larger reduction, one of the people familiar with the plans said.

Deutsche Bank on Thursday reported a bigger-than-expected loss for the fourth quarter, hurt in part by lagging performance in its markets division. It has been losing ground in stock trading, and executives said they expect a recovery to take some time in that business.

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