Deutschebank shares continue to slide, denies claims it asked for a bailout and was denied by Merkel
5 replies, posted
[quote]Intensifying concerns about Deutsche Bank AG ’s financial health caused its shares to drop Monday and pushed the company into the awkward position of publicly denying that it had sought help from the German government.
Shares of Deutsche Bank, one of the world’s largest banks and a linchpin of Europe’s financial system, tumbled 7.5% in European trading, closing at €10.55 ($11.85), their lowest price in decades. They have slid 53% this year, whittling Deutsche Bank’s market value to about $16 billion, roughly the size of regional U.S. lenders like Fifth Third Bancorp and M&T Bank Corp.
The concerns—voiced by a number of analysts and investors—center on whether Deutsche Bank would need to raise capital to fortify its precarious finances. The latest source of pressure is the possibility of a multibillion-dollar legal settlement with the U.S. Justice Department.[/quote]
[url]http://www.wsj.com/articles/deutsche-bank-shares-drop-on-fears-of-capital-raising-1474881370[/url]
Will Deutschebank be the first victim of the next recession? I say good to Merkel giving them the finger (one of the few things she's done I agree with). Banks thinking they can take any risk they want because the taxpayer will foot the bill for it is the reason so many banks were in this mess last recession and will probably be in this mess next recession.
She kind of has to give them the finger.
It would be hypocritical if she gave them a bail out given the strict/frugal austerity measures imposed on Greece.
What exactly is threatening a German recession? And if they do go into recession, will it kill the Eurozone?
[QUOTE=1239the;51115779]What exactly is threatening a German recession? And if they do go into recession, will it kill the Eurozone?[/QUOTE]
A lot of strange things are happening in the economy; everything is slowing down, reserve banks keep lowing interest rates but are now hitting rock bottom etc. The collapse of Deutschbank won't kill the Eurozone but it will likely bring everyone down with it. It wouldn't really be Deutschbank's fault, it would just be the straw that broke the camel's back.
[QUOTE=1239the;51115779]What exactly is threatening a German recession? And if they do go into recession, will it kill the Eurozone?[/QUOTE]
I'm a bit of a europhile so please take my views with a pinch of salt.
I think a breakdown of the EU could only happen if some countries do far worse than others, ie the successful countries see the EU as dragging them down and want to leave. If everyone struggles or succeeds in unison then there would be no call for leaving or dismantling the EU.
Germany is one of, if not the strongest country in the EU, if Germany goes down then everyone has gone down and there would be no logical reason to leave or dissolve the EU. If the EU does dissolve then Germany (and probably poland) will just form a new union and cut out the weaker places anyway. (one reason germany holds so much power is if they leave then the EU collapses and france, the other major player will be saddled with crippling debt)
Thats the logical side anyway, euroskeptics might blame the EU for recession in a bid to trick their country mates into voting against their own interests, it would work too.
Germany having a recession would be a sign of a bigger problem, more of a symptom than a cause. Cause would be the US manufacturing recession which itself is a sign of a bigger issue. To put it short if Germany has a serious recession its likely that everybody will be having the same recession, if the various bubbles burst then it could be serious. A big recession in china might be 2008 all over again.
I hope people see sense that the EU didn't cause the issues we are facing and will face in the future. A trade union is good for all of us and the shares values, regulations and standards mitigate the dangers and disadvantages of free trade.
I'm really happy about this. Deutschedeath is long overdue from its part in the 2008 MBO crisis here in the US. They squandered our massive taxpayer bailout right the fuck back into more CDOs and leveraged ETFs and it's finally coming back to bite them in the ass. On the flip side, if Merkel breaks down and bails DB out she gets slapped with corruption and lying accusations; if she stays the course she'll be indirectly responsible for the inevitable financial ruin. That makes me happy too.
[editline]27th September 2016[/editline]
My options trader co-worker says it's time to go straddle shopping.
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