Could Deutsche Bank Fail?

[timsk]

The daily candlestick chart above is of Deutsche Bank - with the Dax 30 overlaid with a blue line for comparison. You don't need much in the way of TA skills to work out something ain't quite right with the banking giant. Do a Google search or similar for 'could Deutche Bank fail?' and there are lots of results that suggest this isn't just a possibility - it's a probability. And not just from flakey nutheads who would like to see it go belly up - but from some respected market commentators. According to The Wall Street Journal even the IMF recognize the bank is in trouble:

FRANKFURT—Deutsche Bank AG is the riskiest financial institution in the world as a potential source of external shocks to the financial system, according to the International Monetary Fund.
“Among the G-SIBs (globally systemically important banks), Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse,” the IMF said in its Financial Sector Assessment Program.

Is Deutsche too big (to be allowed) to fail or perhaps it's too big to save? Some commentators put Deutsche at being five times bigger than Lehman Brothers, and the financial crisis that would result if they went down would completely dwarf that of 2008.

So, whaddya think - could Deutsche fail and what would happen if it did?

 

[timsk]

This from 'The Street':
Deutsche Bank to Initiate the Next Financial Crisis? Stock Could Be Headed to Zero

BBC News:
Deutsche Bank: World's most dangerous bank?

FT:
Dark days flag up challenges for Deutsche Bank

The Spectator:
If Deutsche Bank collapses, it’s taking the euro with it

 

[Atilla]

View attachment 227826

The daily candlestick chart above is of Deutsche Bank - with the Dax 30 overlaid with a blue line for comparison. You don't need much in the way of TA skills to work out something ain't quite right with the banking giant. Do a Google search or similar for 'could Deutche Bank fail?' and there are lots of results that suggest this isn't just a possibility - it's a probability. And not just from flakey nutheads who would like to see it go belly up - but from some respected market commentators. According to The Wall Street Journal even the IMF recognize the bank is in trouble:

FRANKFURT—Deutsche Bank AG is the riskiest financial institution in the world as a potential source of external shocks to the financial system, according to the International Monetary Fund.
“Among the G-SIBs (globally systemically important banks), Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse,” the IMF said in its Financial Sector Assessment Program.

Is Deutsche too big (to be allowed) to fail or perhaps it's too big to save? Some commentators put Deutsche at being five times bigger than Lehman Brothers, and the financial crisis that would result if they went down would completely dwarf that of 2008.

So, whaddya think - could Deutsche fail and what would happen if it did?

Well if the authorities knew what they know now, Lehman & Bear Stearns would have been saved.

Cost of saving would have been cheaper too.

Doubt same mistake will be made again.


Having said that CBs and Governments are walking on air now as we speak.

 

[kalott]

no

as long ecb is solvent..

 

[Splitlink]

no

as long ecb is solvent..

It's a merry-go-round. ECB lends billions to everyone. They can, hardly, refuse the Germans, when it is their turn.

I can remember, a bit before I went to sea, sailors telling me about how they bought sextants, binoculars, cameras for packs of American cigarettes. Those were the days! I wonder how many Germans, actually, dared to smoke them-it must have seemed like watching money go up in smoke.

I can remember a carton of 200 Camel, Lucky Strike, etc costing me a dollar, tax free from the ship's bond.

 

[counter_violent]

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.


Sounds like the perfect candidate for either a black swan event, or a competitor bank or consortium to take them down. The vultures will be continually circling looking for an opportunity.

Dog eat Dog, Just saying !

 

[TexasRangersFan]

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.

I saw this tonight and thought it might be relevant.

--------------


'We should nationalise German banks' Warning Deutsche Bank teetering on edge of CRISIS

A TOP economist has warned that Germany's biggest bank is teetering on the edge of crisis and they only way to protect it against future shocks is to nationalise it.


Martin Hellwig said stress tests carried out by the European Central Bank revealed the Deutsche Bank would be left in a precarious position in the event of another financial crisis.

While it would probably not go bust in a fresh downturn - he predicted the bank which is crucial to the German economy would face serious equity problems.

He said: "Putting it short: for a long and serious crisis there simply wouldn't be enough money."


more........

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I imagine if DB failed that it would have a domino effect across Europe and possibly endanger the EU.

All the banks and markets are intertwined, failure of DB would impact the markets in the states as well.

I assume that the Euro would drop against the dollar.
But after the initial shock, do you think that money would flow into the U.S. markets for safety?
Do you think it might increase the likelihood of American banks failing if our FED would slightly raise margin requirements limiting the money available for lending ?

-------


http://www.express.co.uk/news/world/698305/Deutsche-Bank-financial-crisis-EU-Angela-Merkel

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BTW, most of the forum members here are British.

What most Brits think of Merkel and her bailouts of Greece over the last few years and allowing so many immigrants into Germany against the wishes of the people ?

 

[timsk]

Deutche embroiled in another scandal. Very long article from The New Yorker: Deutsche Bank’s $10-Billion Scandal. Anyone who wants to know the gist without reading the whole thing, the penultimate paragraph sums it up and paints a rather bleak picture. . .

"Given Deutsche Bank’s fragility, the mirror-trading scandal could not have come at a worse time. Cryan has promised to settle the Russian case by the end of this year, and the bank recently set aside about a billion dollars for legal costs. This may not be enough. Last year, Deutsche Bank was fined the relatively small sum of two hundred and fifty-eight million dollars for its circumvention of sanctions against Iran, Sudan, and elsewhere. In 2014, however, BNP Paribas agreed to pay nearly nine billion dollars to settle with regulators over sanctions violations. And the mirror trades may exact a heavy fine from U.S. regulators, who take a dim view of activity that looks like money laundering. A payment as vast as the one levied at BNP Paribas could require Deutsche Bank to raise capital to survive. A German government bailout might become a necessity. A capital shortfall at Germany’s largest bank might provoke a banking crisis across Europe. The shock to the global economy would be profound."

 

[kalott]

time for draghi to step in and start the usual year end rally? :whistling

before the banks in italy gets attention

 

[timsk]

News of the German banking giant goes from bad to worse:
Deutsche Bank shares fall to lowest level since mid-1980s

 

[Splitlink]

14 billion? Peanuts! Should read what Bank of Madrid has been up to.

Trial started today. and the bondholders want blood! You know what those Spaniards are like! Especially, when they have been taken to the cleaners by some very inscrupulous, already wealthy, top brass.

 

[Pat494]

It is high time that regulators and the Courts caught up with the shady figures at the top of the financial and banking industries, who are making such a mess of things. No doubt stuffing their pockets with their ill gotten gains.
People like Fred the shred were given golden bowler retirement packages not the massive fines they deserved.
More Capitalist money stuffing I guess.

 

[timsk]

Just to balance the Guardian article linked earlier, here's one from the Telegraph. . .
The Deutsche Bank crisis could take Angela Merkel down – and the Euro

 

[Splitlink]

Just to balance the Guardian article linked earlier, here's one from the Telegraph. . .
The Deutsche Bank crisis could take Angela Merkel down – and the Euro

With all the money lent to Greece, etc. that they will never get back, surely they can save an important bank like that? A bunch of crooks heading it-certainly-- but there must be other people, in Germany, who can run banks. If Merkel does not save that bank, she'll be making as grave a mistake as she did with the immigrants crisis.

 

[counter_violent]

Why has everyone got a downer on Europe?

Oh yep, I remember, cos it's a great big steaming pile of ----



The sensible Brits voted Brexit, alas, we should have done it years ago !

 

[Splitlink]

Why has everyone got a downer on Europe?

Oh yep, I remember, cos it's a great big steaming pile of ----



The sensible Brits voted Brexit, alas, we should have done it years ago !

You've got a short memory! Ever heard of RBS, Lloyds and HSBC?. Not only going abroad for holidays , but going abroad for your nuclear plants, too. No heavy industry left, to speak of?

It's not that I am gloating, I'm British and proud of it but, yes, you should have voted Brexit years ago, it would have been better for all us.

 

[TradetoWinU]

After the german goverment made sure that they will not help with new credits as they did before it could be that the deutsche Bank have some big problems in the future. Or even will come a bad end.

 

[timsk]

no

as long ecb is solvent..

Hi @kalott
Are you still as confident in your assessment?

A torrent of bad news regarding the bank in the last 24 hours. When the CEO sends out a memo to all staff saying everything's hunky dory and that there's nothing to worry about - isn't that a sure sign the dirty brown stuff either has - or very soon will - hit the fan?
Tim.

 

[Atilla]

Hi @kalott
Are you still as confident in your assessment?

A torrent of bad news regarding the bank in the last 24 hours. When the CEO sends out a memo to all staff saying everything's hunky dory and that there's nothing to worry about - isn't that a sure sign the dirty brown stuff either has - or very soon will - hit the fan?
Tim.

What's the bad news that's so bad?

 

[Pat494]

DB employs about 12,000 people in Britain alone. If DB fails then the EU will be pushed to survive.