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Collapse of the World: Deutsche Bank (1 Viewer)

AAAll-Stars said:
Pressure is building for Germany to show it's ready to rescue Deutsche Bank

This bank has tentacles all over the world and a 7% drop is catastrophic. If it falls, it could pull the rest of the world down with it.

Is this the end?
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The European banking system remains deeply ####ed up. US banks are in great shape, by comparison.

Recently EU leaders started pushing back on implementation of the Basel III accords on banking regulation because actually complying with them would be "too burdensome" on their #### banks. Never mind that they negotiated and agreed to those regulations.

European banks also remain far more of a problem from the standpoint of interconnectedness. When Deutche Bank gets the flu, more European banks catch a cold than would be the case for Bank of America and other US banks, for instance.

 
I think a greater sign of the end of the world is that I cant read an internet article about the end of the world without a Pantene ad playing annoyingly over the text.

 
Move all investments out of DB and put them in Italian banks :moneybag:

The global economy is doing great and stocks rightfully so are hovering around all time highs :thumbup:

 
Chancellor Merkel is facing elections. There is zero chance she will let her country's largest bank fail. My guess is they will suffer for a few more days, maybe a week, before the government announces some kind of backstop.

 
This is no surprise they have been hemorrhaging losses the last year with the $14B fine on top of it. 

European banks are a shell of what us banks are right now.

the scariest thing is the stock market does not seem to care. There should have been a massive drop due to this. Stock market continues to ignore cracks in the foundation.

 
bagger said:
This is no surprise they have been hemorrhaging losses the last year with the $14B fine on top of it. 

European banks are a shell of what us banks are right now.

the scariest thing is the stock market does not seem to care. There should have been a massive drop due to this. Stock market continues to ignore cracks in the foundation.
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15 minute stretch today when the market turned south was the highest volume of any 15 minute stretch in 2016 in S&P futures, worth noting.

 
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bagger said:
There should have been a massive sell off today. Everyone is ignoring risk.
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Almost every market in the world is being driven by one thing right now and it has little to do with fundamentals.

Edit: Tomorrow could be risk off. European bank issues, end of the quarter, & a Friday. 

 
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bagger said:
This is no surprise they have been hemorrhaging losses the last year with the $14B fine on top of it. 

European banks are a shell of what us banks are right now.

the scariest thing is the stock market does not seem to care. There should have been a massive drop due to this. Stock market continues to ignore cracks in the foundation.
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There is a lot of money out there with few places to go.  There are undoubtedly some pretty big bubbles.  When, where, and how they pop is the big question.

 
bagger said:
This is no surprise they have been hemorrhaging losses the last year with the $14B fine on top of it. 

European banks are a shell of what us banks are right now.

the scariest thing is the stock market does not seem to care. There should have been a massive drop due to this. Stock market continues to ignore cracks in the foundation.
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Is the $14b fine imposed to stop it from becoming Turkey Bank?

 
SacramentoBob said:
Just like last time, it's different this time.
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Ben Bernanke, 05/2007:

Amazing looking back almost a decade later and reading this before it all unfolded.

http://www.cnbc.com/id/18718555

Quote

"We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,"

"Past gains in home prices have left most homeowners with significant amounts of equity in their houses and the growth in jobs and incomes should allow most households to keep their financial obligations in a manageable range."

But don't worry, the central banks will make sure nothing bad happens.

Janet Yellen, 08/2016:

 
 
"even if average interest rates remain lower than in the past, I believe that monetary policy will, under most conditions, be able to respond effectively to shocks."[\quote]
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The point of holding those two quotes up next to each other is to emphasize how silly everyone is for putting this unbelievable trust in the Fed and other central banks. 

 
jonessed said:
There is a lot of money out there with few places to go.  There are undoubtedly some pretty big bubbles.  When, where, and how they pop is the big question.
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Apparently there is safe yield everywhere - one well respected poster on this very board had this to say to me when I said the world is piling into our market bc there is no yield anywhere:

This clown isn't going to listen to me, but maybe somebody else here can tell LHUCKS here about the yield available on highly rated corporate debt or REITS? You know, the sorts of investments pensions and endowments are actually making....
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Slapdash said:
That thing is interesting rates.  Unfortunately, negative interest rates really wreck the business models of most banks.
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Slap, are you calling for negative interest rates?  I don't believe you are but just want to be sure.  IOER needs to go way now but I don't think the political will is there at the Fed.

 
fantasycurse42 said:
Apparently there is safe yield everywhere - one well respected poster on this very board had this to say to me when I said the world is piling into our market bc there is no yield anywhere:
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Here's what you said verbatim:

We're sitting on emergency monetary policy now for almost a decade, the Fed (and all central banks alike) have forced investors into risky assets (think about pensions for instance) because they cannot get yield anywhere. With their no interest business, companies have relentlessly bought back stock further fueling frothy asset valuations as investors have piled in. If the market was to crash, lives will be ruined - I'd blame central banks as much as greedy investors who aren't playing any defense

 
baymen said:
Slapdash said:
That thing is interest rates.  Unfortunately, negative interest rates really wreck the business models of most banks.
Click to expand...
Slap, are you calling for negative interest rates?  I don't believe you are but just want to be sure.  IOER needs to go way now but I don't think the political will is there at the Fed.
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 My post was simply pointing out that the scenario Walking Boot describes is typically solved by lowering rates.  Given the corner we have backed into, that would mean negative rates.  The natural rate of interest likely remains negative. 

The Fed would never do something like that because negative rates wreck bank profitability.  The Fed remains under immense pressure to increase rates from banks.

Ideally, we need the political will at the Fed to change to an NGDP level-targeting approach.   They are moving there slowly, but there is too much popular ignorance and backlash over inflation to implement.  Bernanke had written about this for a while prior to joining, but he could not overcome the political desire to increase rates.

 
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