After listening to all of the guests on CNBC and Bloomberg, I am convinced the world has gone insane. The prevailing wisdom amongst some of the top minds in finance is that Deutsche Bank isn’t Lehman. Ergo, everything is fine. Feel free to run about naked throughout the streets — but just don’t buy COCO bonds. One of the gents on CNBC said DB was a great long term buy here and that this ‘little bear raid’ was long in the tooth and about to end.
That being said, yields for Deutsche Bank’s COCO bonds are now upwards of 13% and prices are less than 70.
The euro is materially weaker vs the dollar, off by 0.5%. Aside from that, DB is indicating up in the pre-market, in spite of it still trading down by 2.8% in Europe.
A calm normality has imposed itself on markets. I would expect nothing less than a rally, coupled with commentary telling investors that Deutsche Bank’s problems are overblown and that once the DOJ lowers the fine, all will be well.
A great man once said ‘Liquidity is just great, until it isn’t anymore.’
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futs green bc central planners,,,,,,no more down days…
I do wonder how long it takes the DOJ to realize that it’s also in their best interest to not be owed money from a bank that goes bust, especially when they hold the keys to help momentarily restore confidence in the institution….
At the end of the day, it’s a bank that’s just not fundamentally suited for our brave new world with too much IB and no retail offset….
ny fed = citadel have a lot of heavy am lifting to do before ramp capital steps in 90mins early……
Now … about 10:15 EST – DB is trading up almost 7.5% from open. Evidently the people who pulled their business from DB yesterday were wrong and it will all be fine.
now crash this bitch.
When the bailout comes, what will keep people’s trust in the banking system? When will people realize that banks are just instruments of governments? There is no risk to overleveraging if govts will bail you out every time. Too big to fail indeed.
my 16 call on db looks increasingly likely, on rumors and the inevitable “settlement”. a ponzi has its own special logic….