And that Deutsche Bank has been waiting to slide into insolvency.

Given the source of that might think about buying some CoCos……

7 thoughts on “Rilly?”

  1. @dearime No, that’s why they bail it out. If it actually becomes insolvent there will be an event of default on all DB’s borrowings which means a lot of claims will fall due. Very messy.

  2. Thanks, Alex. So it won’t become insolvent, it’ll only become ruined? Phew!

    I suppose it might be a test case for German Exceptionalism.

  3. He isn’t a million miles off on this one. I read a couple of books on the US crash and every time Goldmans et al had some right shit to dispose of, the rubes at Deutsche Bank will their first call and most willing buyers,

    I suspect the DB asset book has a frightening amount of crap in it..

  4. Yup, he’s right this time:

    “It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed.

    After a hard-hitting sequence of scandals, poor decisions, and unfortunate events, Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low.

    Even more stunning is the long-term view of the German institution’s downward spiral.

    With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007.

    If the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful.

    In 2009, the company’s CEO Josef Ackermann boldly proclaimed that Deutsche Bank had plenty of capital, and that it was weathering the crisis better than its competitors. It turned out, however, that the bank was actually hiding $12 billion in losses to avoid a government bailout. Meanwhile, much of the money the bank did make during this turbulent time in the markets stemmed from the manipulation of Libor rates. Those “wins” were short-lived, since the eventual fine to end the Libor probe would be a record-setting $2.5 billion.

    The bank finally had to admit that it actually needed more capital.

    In 2013, it raised €3 billion with a rights issue, claiming that no additional funds would be needed. Then in 2014 the bank head-scratchingly proceeded to raise €1.5 billion, and after that, another €8 billion.

    The bank is now in the process of cutting 9,000 employees and ceasing operations in 10 countries.

    Now the real question: what happens to Deutsche Bank’s derivative book, which has a notional value of €52 trillion, if the bank is insolvent?”

  5. Murph is right about economic bad news ahead.

    His reasons are a load of socialist bollocks but even a stopped clock etc….

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