Deutsche Bank COCO Bonds Hit Record Lows; Futures Gain

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.’

A few hours of shut eye and voila, like it never happened. Losses have been halved in DB, but Commerzbank is still trading near the session lows. But no one gives a shit about them.

Futures are flat. Bond yields around all of Europe have normalized, closing the deficit between German and Italian. And, lastly, crude is barely off now.

That was the shortest panic ever. Back to business as usual.

This isn’t a joke people. Laugh and masturbate all you want over a rigged market dominated by explicit central bank schemes, but this is the game changer. The collapse of Deutsche Bank is underway and it’s having a profound effect on other banks too, like Commerzbank and Soc Gen, just to name a few. I can’t even sleep right now.

Bloomberg's @MooreMichaelJ explains why there's concern about Deutsche Bank https://t.co/tC3RidtcI0 pic.twitter.com/KueEt1xwAH

— Bloomberg TV (@BloombergTV) September 30, 2016

Shares of Deutsche are collapsing, now off by 9%.

Germany’s second largest bank, Commerzbank, is collapsing — down 7%.

Soc Gen is off by 5%. You get the picture.

German and American yields are dropping like a stone, while peripheral Europe rise. This is a huge issue that will become front page news if it should continue.

Futures are down over 100 and Europe is down more than 2%.

They’re just so enlightened.

Arab News is Saudia Arabia’s first english newspaper, founded in 1975. After U.S. lawmakers overrode Obama’s vetoe of the JASTA bill, they lost their shit — apparently.

The bill is Justice Against Sponsors of Terrorism Act, typically referred to as JASTA.

The House of Saud translation is Just Acted Stupidly Towards Allies.

Obviously, they believe the House will reject the bill and uphold the Obama veto.

It’s drivel like this that makes this man tantamount to a circus clown offering stock tips, while flying mid-air out from a carnivale cannon. Cramer lays out three infantile scenarios, all of which end with ‘business as usual.’ His best advice is to may expect downside, but to buy Pepsi.

It will last for exactly 24 hours. Should you fail to join our league of gentlemen by that time, your little bullshit computers will self-destruct.

CLICK HERE TO TRAVERSE THE LEAGUE OF GENTLEMAN AND RELISH IN THE DARKNESS THAT IS A SPIRALING MARKET

These are some of the most insane public comments by a US diplomat I’ve ever seen. Russia’s involvement in protecting the Assad regime and to destroy ISIS has gotten the Obama administration in such a frenzy that they’re now sending out their shit talkers to make veiled threats to Russia.

Is this wise foreign policy, sabre rattling with a country who has 10,000 ICBMs? This is fucking stupidity at the highest levels.

“Extremist groups will continue to exploit the vacuums that are there in Syria to expand their operations, which could include attacks against Russian interests, perhaps even Russian cities. Russia will continue to send troops home in body bags, and will continue to lose resources, perhaps even aircraft,” Kirby told reporters at Wednesday’s press briefing, adding that if the war in Syria continues “more Russian lives will be lost, more Russian aircraft will be shot down.”

Maria Vladimirovna Zakharova, Director of the Information and Press Department for Russia, said in a Facebook post “And those [acts of terrorism] will be perpetrated by ‘moderate’ [Syrian opposition groups]? Just the ones that Washington has been unable to separate from Al-Nusra for as long as six months? Don’t you think that such ventriloquism about ‘body bags,’ ‘terrorist attacks in Russian cities’ and ‘loss of aircraft,’ sounds more like a ‘get ’em’ command, rather than a diplomatic comment? Is Kirby actually threatening to use the same “moderate” jihadists that the Obama administration has funded and armed to kill Russian troops, down Russian planes and slaughter Russian citizens in their own country?”

What the fuck is going with this country and why are we supporting ISIS in Syria?

Following a long summer of french martinis and bloody marys, Carter Braxton Worth has placed his polo gear in the family mud room and taken to the charts to have a gander, or two, at Deutsche Bank.

He posits the shares have zero support, currently well below the 2009 lows, saying it can go ‘all the way.’ He then goes on to compare its paltry $15b market cap to some of its American competitors, whose caps are 10x Germany’s largest bank. Having a eureka moment. C.B. Worth says ‘something’s wrong here.’

Indeud.

The new bond King, Jeff Gundlach, offers some sage advice here, in a Reuters interview by morse code.

“I would just stay away. It’s un-analyzable,” Gundlach told Reuters by phone about Deutsche Bank shares and debt. “It’s too binary. The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be.”

“One day, Deutsche Bank shares will go up 40 percent. And it will be the day the government bails them out. That jump will happen in a minute,” Gundlach said.

“It is about an event which is completely out of your control.”

While we all love to see Germany’s biggest bagholder punished in biblical terms, it’s a toxic trade for both longs and shorts. On one hand, the bank is all but dead. The capital base is on the verge of destruction — with over $1.8t in assets and a market cap slightly above $15b. On the other, in spite of what Merkel said, there is no way the Bundesbank permits DB to blow up, when considering they underwrote every single Greek bailout over the past decade.

The billion dollar question is, when will Germany assist Deutsche Bank? Do you know? I have no idea. I’m guessing they won’t do it, unless the stock gets hammered a little bit more. Clearly, they’d like to avoid displaying moral hazard for as long as they can. But, if we’re being honest here, the entirety of western finance is now a rigged game of smoke and mirrors. You’d have to be crazy to believe they’d sit back and let Deutsche Bank unravel and then blow up.

Short sellers will be met with an awfully acrimonious vengeance, whenever the Bundesbank decides to step in. You’re better off sitting back and enjoying the shit-show.