Deutsche Bank, based in Frankfurt, is considered by many bears to be one of the most vulnerable large financial institutions in the world given its derivatives exposure. I am not particularly knowledgable on that issue, so feel free to chime in below with any insight you have as to DB‘s business lines and risk exposure.
In looking for clues about whether the bears are right or wrong here, the monthly chart intrigues me. Clearly, the bank, like many others, is nowhere close to its 2007 highs.
Beyond that, the tedious consolidation sideways since 2008 appears close to resolving. A break up and out of this pattern into the mid-$50’s would likely signal that the market has rejected the bear case for DB‘s undoing, let alone systemic risk. That has not happened yet, though, and we are left in limbo headed into August.
What say you about the bank?
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Chess
I saw this article, on market folly. Thanks for the awesome work you do.
http://www.reuters.com/article/2013/06/14/financial-regulation-deutsche-idUSL2N0EO1D220130614
thanks
The rumors seem pretty serious on this one.
Hard to believe, but the DB chart bears an uncanny resemblance to the FCX chart. Is DB heavily involved in emerging markets, commodities, other risky stuff besides the derivatives you mentioned? I suspect the answer is yes, and if FCX breaks, we may see DB break as well.
interesting stuff
I don’t like it…. something has smelled funny with this one for ages.
Trouble
August is a good month for leaving stocks in limbo – good call. It’d be by extreme off chance that anything would resolve itself this coming month. DB is pretty complex, but should have a more conservative book than the French banks… At least the French banks of a couple of years ago. Reasoning that DB is much weaker than they should be, and is perceived to be, one would have to support the notion that the relatively robust German economy has been a crutch to DB and that the bank has failed to change as a result of continuing domestic support.
DB won’t “have” to suffer unless the German economy tanks – all the fanciful exposures can be dealt with over time – if they’re losing bets. No one need fear a “mark-to-market” event – that’s not how the game is played.