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 ..."

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