Showing posts with label Deutsche Bank. Show all posts
Showing posts with label Deutsche Bank. Show all posts

2016-10-10

MacroView: World's Central Bankers Doubling Down, Going For Broke?

MacroView | © DomainMondo.com
Domain Mondo's new weekly review of  macro economic and investing news:

MacroView Feature • Doubling Down:"... it is capitalism itself that is threatened by the ongoing Martingale strategies of central banks. As central bank purchases grow, and negative/zero interest rate policies persist, they will increasingly inhibit capitalism from carrying out its primary function — the effective allocation of resources based upon return relative to risk ... This cannot end well."--Bill Gross. See also Bill Gross says global markets are one big casino created by central banks--MarketWatch.com.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.--William Butler Yeats

•  The 3 Things That Spook People about the Stock Market:

SkyBridge Capital [skybridgecapital.com] founder Anthony Scaramucci explains in the above video published Oct 3, 2016, by Fortune.com.

•  The TRUST Index: Trust is eroding away in markets | BusinessInsider.com. See also Backlash to World Economic Order Clouds Outlook at IMF Talks | Bloomberg.com and Perry Capital Closing Flagship Fund After Almost Three Decades | Bloomberg.com.

•  Bridgewater Ray Dalio's Long-Term Debt Cycle Charts--Ritholtz.com: "It is no longer controversial to say that: … this isn’t a normal business cycle and we are likely in an environment of abnormally slow growth … the current tools of monetary policy will be a lot less effective going forward … the risks are asymmetric to the downside … investment returns will be very low going forward, and … the impatience with economic stagnation, especially among middle and lower income earners, is leading to dangerous populism and nationalism."

•  Deutsche Bank (db.com | $DB $DBK): German minister accuses Deutsche Bank of making speculation its business--"I did not know if I should laugh or cry ... [Deutsche Bank] made speculation a business model [and] is now saying it is a victim of speculators."--German Economy Minister Sigmar Gabriel--Reuters.com  See also Crisis of Globalization Lies Behind Deutsche Bank’s Troubles | WSJ.com: "Deutsche has also paid a high price for its global ambitions ... it tried to buy market share through aggressive pricing, acquiring a reputation among its rivals as the “dumb money” in the market."

•  A weak British Pound means UK-based assets are attracting more and more attention from foreign investors, particularly investors with US$. As a result, the London Stock Exchange benchmark index FTSE100 is up, up, up:

•  Venture Capital: It is a pricing, not a value, game! "At the time of a VC investment, the VC wants to push today’s pricing for the company lower, so that he or she can get a greater share of the equity for a given investment in the company. Subsequent to the investment, the VC will want the pricing to go higher for two reasons. First, it makes the unrealized returns on the VC portfolio a much more attractive number. Second, it also means that any subsequent equity capital raised will dilute the VC’s ownership stake less ... This is a business where success is measured less on the quality of the companies that you build (in terms of the cash flows and profits they generate) and more on the price you paid to get into the business and the price at which you exit this business, with that exit coming from either an IPO or a sale. Consequently, how much you are willing to pay for something becomes a process of judging what you will get when you exit and working backwards."--aswathdamodaran.blogspot.com.

•  Venture Capital hits a wall in Q3 as investments tumble 28% YOY: "According to a new report from the National Venture Capital Association, startups in the U.S. raised $15 billion in venture capital during the third quarter ending September, down 28.6 percent from $21 billion for the same period one year ago."--VentureBeat.com

•  Election 2016: One mashup of recent polls has Hillary Clinton ahead of Donald Trump but remember that the Financial Times poll tracker ahead of the Brexit vote had “Remain” up by 2 points the day of the referendum. Betting odds have recently had Clinton at a 75% chance of winning; they had “Remain” at 85% the day before that vote. The USC Dornsife / LATimes.com daily tracking poll, on the other hand, for weeks has shown Donald Trump leading Hillary Clinton. Consensus is that Trump's running mate, Indiana Gov. Mike Pence, won the VP Debate. Remaining Presidential debates: October 9th and October 19th (both are 9:00-10:30 pm EDT). Watch online here.

 Q3 2016 Earnings Season--companies on Domain Mondo's coverage list:
  1. Alibaba BABA
  2. Alphabet GOOG
  3. Amazon AMZN
  4. Apple AAPL
  5. Facebook FB
  6. GoDaddy GDDY
  7. Neustar NSR
  8. Rightside NAME
  9. Twitter TWTR
  10. Verisign VRSN
Q3 2016 preview:  For Q3 2016, the estimated earnings decline for the S&P 500 is -2.1%. If the index reports a decline in earnings for Q3, it will mark the first time the index has recorded six consecutive quarters of year-over-year declines in earnings since FactSet.com began tracking the data in Q3 2008--read more here (pdf).

Two More Reading Recommendations: 
  1. It's Time We Crush the Putrid Roach Motels of Philanthro-Crony-Capitalism, Starting with the Clinton Foundation--CharlesHughSmith.blogspot.com
  2. Why thousands of millionaires don’t pay federal income taxes--WashingtonPost.com.
-- John Poole, Editor, Domain Mondo 

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2016-10-03

Deutsche Bank $DB $DBK In Serious Trouble, Woes in 5 Charts (videos)

Deutsche Banks woes in 5 charts:

Deutsche Bank is in serious trouble, with some hedge funds pulling business and the US Department of Justice seeking $14 billion to settle its probe on mortgage securities. Why are people so worried about the bank’s fate? FT.com's Martin Arnold explains in five charts. Published Sep 30, 2016

What Do Deutsche Bank Clients, Investors Fear?

As Deutsche Bank shares fell to a record low last week, concerns grew about the bank's mounting legal costs. Bloomberg's Michael Moore examines the bank's challenges on "Bloomberg Surveillance" September 30, 2016.

See also: Crisis of Globalization Lies Behind Deutsche Bank’s Troubles | WSJ.com: "Investors doubt the bank can earn an economic return on its equity ..."

 Domain: db.com
Stock exchange: symbol | FWB:DBK | NYSE: DB


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2016-08-08

Benefits of Brexit, How UK's Brexit Ministers Plan To Leave The EU (video)

How Brexit ministers plan to leave EU:

Video above: Lionel Barber, FT editor, and Janan Ganesh, political commentator, discuss how the UK’s three Brexit ministers — Boris Johnson, Liam Fox and David Davis, the "Brexit Team" — plan to negotiate exit from the EU, and how they will work together. Published July 28, 2016, by FT.com.

Benefits of Brexit: one reason Brexit makes sense
Courtesy of: VisualCapitalist.com

While maintaining economic ties to the single market is an important point to consider, the UK also gains advantages from separating from parts of the EU ecosystem. Parts of Europe are still an economic mess, not getting any getting better. For example, see chart above on non-performing loans (NPLs). Italian banks are being crushed by €360 billion in non-performing loans. Bank stock prices in Italy have plummeted, including Banca Monte dei Paschi di Siena, Italy’s third-largest bank by assets, and UniCredit, the country’s largest bank with just under €1 trillion in assets, is trading at one-third of what it was worth a year ago. The ECB’s Mario Draghi is now backing a public bailout of Italy’s banking sector.

Portugal has a similar banking crisis brewing. Non-performing loans have mounted to 18.5%, and Prime Minister Antonio Costa is also publicly looking for a solution to help Portuguese banks. Even Germany, which is typically rock-solid, has its own banking issues. As covered a few weeks ago, the country’s largest bank, Deutsche Bank, has seen its value collapse as it has been engulfed by scandals.

See on Domain Mondo:
See also: 

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2016-07-06

Deutsche Bank $DB $DBK, Italian Banks, Approaching a 'Lehman Moment'?

Top: Deutsche Bank (NYSE: DB) shares are down 25% since the Brexit vote on June 23, 2016.
Bottom: Deutsche Bank (NYSE: DB) shares are down 92% since May 11, 2007. Source: google.com
Background: "Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004 to 2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a 'case study' of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors."--Deutsche Bank | Wikipedia.com (emphasis added)


Deutsche Bank AG | Domain name: db.com | Shares traded on: FRA: DBK and NYSE: DB
  • 23-29 Jun 2016: "... investor George Soros believed the U.K. would vote for Brexit ... and Soros was long the pound as the results were announced. After the vote, though, Soros shorted about $100 million worth of Deutsche Bank shares, targeting Germany's biggest lender as a potential victim of Britain's secession. It was a good bet: Deutsche has tanked since the June 23 vote, falling to the lowest level since Germany's DAX stock index was established in 1988 ..."--Bloomberg.com


  • 29 June 2016--[U.S.] Federal Reserve releases results of Comprehensive Capital Analysis and Review (CCAR)--"The Federal Reserve objected to the capital plans of Deutsche Bank Trust Corporation and Santander Holdings USA, Inc. based on qualitative concerns."
  • 4 July 2016: "... the continuing implosion of major banks over in Europe is the main factor that is driving investors to safe haven assets such as silver. Rumors continue to spread that Deutsche Bank is essentially insolvent at this point, and many are watching for the imminent collapse of the largest and most important bank in Germany. When this happens, it will be a much, much more cataclysmic event for the global financial system than the collapse of Lehman Brothers was back in 2008. But today I want to focus on the ongoing implosion of the major banks in Italy. Italy has the 8th largest economy on the entire planet, and their banks are drowning in approximately 400 billion dollars worth of non-performing debt. The Italian government would like to bail these banks out, but the rest of the EU appears ready to block that effort because it would violate EU rules. As a result, the big Italian banks experienced a bloodbath on Monday…"--washingtonsblog.com (emphasis added)
  • 5 July 2016: European stocks slammed after property fund suspensions | MarketWatch.com: "European stocks moved sharply lower again Tuesday, as concerns over the U.K.’s Brexit vote gripped the market ..."


    • See Brexit Triggers EU Power Struggle between Merkel and Juncker | spiegel.de: "... After Merkel speaks with Juncker on the phone that weekend, her belief that the Commission president is more a part of the problem than a part of the solution doesn't change. The chancellor believes that Juncker's appetite for power is one of the reasons why the British have turned their backs on Europe ..."

     See also on Domain Mondo:

    Caveat Emptor!

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    2016-02-15

    Deutsche Bank, Coco Bonds, Big Trouble Brewing? (videos)



    More gloom for Deutsche Bank? | FT Business - Germany's biggest lender has suffered a continued sell-off in its shares and bonds. Why has Deutsche Bank suffered more than its peers, and what is its chief executive doing to reassure investors? FT.com's financial editor Patrick Jenkins explains in 90 seconds. Published on Feb 9, 2016

    Domain name: db.com

    Deutsche Bank stock down more 50% since July 31, 2015
    Deutsche Bank stock down more 50% since July 31, 2015 (source: google.com)


    Here's What You Need to Know About CoCo Bonds - Video above: "Morning Must Read," Bloomberg’s Tom Keene discusses the function of CoCo bonds in light of concerns at Deutsche Bank with Mohamed El-Erian, chief economic advisor at Allianz and Bloomberg View columnist and Martin Gilbert, chief executive officer at Aberdeen Asset management. They speak on "Bloomberg ‹GO›." (El-Erian is a Bloomberg View columnist. The opinions expressed are his own.) Published Feb 9, 2016

    Stock Exchanges:  Symbols  FWB: DBK and NYSE: DB

    Europe's 'doom-loop' returns as credit markets seize up - Telegraph: 09 Feb 2016 "A string of dire results from banks have set off a firesale on "Cocos", bonds that allow lenders to miss a coupon payment and switch the debt to equity. A Unicredit issue of €1bn of Coco bonds has crashed to 72 cents on the euro. The iTraxx Senior Financial index measuring default risk for bank debt in Europe soared to 137 on Tuesday, from 68 as recently as early December. Mr Guglielmi said the mood is starting to feel like the panic in the summer of 2012 ..."

    Frances Coppola, Feb 10, 2016: "The fundamentals have not changed and the longer-term trend is downwards. I suspect the recovery in Deutsche Bank’s share price will be short-lived ...  It would be hard to see how including bank stocks in QE could avoid accusations of monetary financing of government, in breach of Article 123 of the Lisbon Treaty. And the moral hazard involved in the ECB acting as a backstop for bank stocks doesn’t bear thinking about. However, desperate times need desperate measures. It seems the market wants to believe that the ECB would intervene to prevent financial sector meltdown. “Whatever it takes” still resonates."

    As Deutsche Bank Chief Turns to Legal Woes, Here's What He Faces - Bloomberg Business: "The bank is grappling with matters that many of its global rivals have put behind them -- including U.S. probes into its mortgage-backed securities business and into whether its traders colluded to manipulate currency rates. In a more recent development, the bank is being investigated by U.S. and U.K. authorities over whether its internal controls failed to catch some $10 billion in transactions that may have moved money out of Russia, people familiar with the matter have said. “You’ve seen a lot of the same issues for a lot of banks,” said Elliott Stein, a Bloomberg Intelligence litigation analyst. “The problem is they have so many. These issues are not going away, and the bank is not likely getting a discount for settling a lot at once.”"

    $DB OR Deutsche Bank tweets:


    See also: Bad Results Foreshadow A Gloomy Future For Deutsche Bank - Forbes: "... underlying these exceptional expenses is a sustained revenue fall due to low interest rates. Interest rates are set to fall further, if anything. The prospects for DB’s private & business bank look pretty grim."

     and A tempest of fear | The Economist: "... the malaise of European banking stocks has deeper roots. The fundamental problem is both that there are too many banks in Europe and that many are not profitable enough because they have clung to flawed business models. European investment banks lack the deep domestic capital markets that give their American competitors an edge. Deutsche, for instance, has only just resolved to hack back its investment bank in the face of a less hospitable regulatory environment following the financial crisis..."

     and European Bank Nightmare Far From Over as Fines and Fintech Loom - Bloomberg Business



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