“When it gets serious, you have to lie”™  ~ Juncker | Deutsche Bank

Update – 12.12.2016

I suppose this is a good example of being wrong on timing.  DB will probably just be around until it isn’t, but in the meantime I’ll just try to generate a little cash as it bounces around from one range to another.  Bought a put and a call about two months ago on the stock because I figured it would make a big move by mid-November, but was not sure where it would go (even though I was/am bearish on them).  It didn’t move enough for me, so I rolled the position out until January.  Released it on Dec. 3 (a bit early).  Still got a 45% return though, so it was ok.

September 27th
In einem Interview mit “Bild” (Mittwoch) sagte John Cryan laut Vorabmeldung auf die Frage, ob die Bank Staatshilfen brauche: “Das ist für uns kein Thema.”

[In an interview with Bild (Wednesday), John Cryan responded to the question whether or not the (Deutsche) Bank needed help from the government: “For us, that isn’t even a topic to discuss”]

September 28th
Die Bundesregierung und die zuständigen Finanzaufsichtsbehörden bereiten einen Notfallplan für die Deutsche Bank vor. Nach Informationen der ZEIT arbeiten Beamte in Berlin, Brüssel und Frankfurt trotz bisheriger Dementi ein entsprechendes Konzept aus.

[The federal government and relevant regulators are preparing an emergency plan for the Deutsche Bank.  According to information provided to Zeit, officials in Berlin, Brussels, and Frankfurt, are working on a suitable plan despite previous denials.]

“However, confirming the severity of the situation, earlier today Deutsche Bank also announced it had sold its Abbey Life insurance unit to Phoenix Group Holdings for £935 million ($1.22 billion) in a deal that will boost the German lender’s capital position. Deutsche Bank Chief Executive John Cryan said in a statement that the sale would allow the bank’s asset-management arm to focus on its core business and strengthen its capital position.”
ZH

“German financial watchdog (Bafin) not working on emergency plan for Deutsche Bank: sources” Reuters

September 29th
“*DIJSSELBLOEM REPEATS DEUTSCHE BANK MEETS CAPITAL REQUIREMENTS” ZH

“Deutsche Bank is not Europe’s Lehman moment: Austrian finance minister”
“But that should not happen again given that we have the banking directive, the banking union, a common regulator, the single resolution mechanism, deposit guarantees set by EU rules – that means we have all measures in place on a European level to stabilize financial markets.” Reuters
Should not’.  Yes, and Lehman Brothers ‘should not’ have collapsed.  But it still happened.

“A number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank.”
“Millennium Partners, Capula Investment Management and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation who declined to be identified talking about confidential client matters.”
“The issue here is now one of confidence,” said Chris Wheeler, a financial analyst with Atlantic Equities LLP in London. “That’s what’s going on here. The thinking is ‘Deutsche Bank is fine, but there’s a slim chance it might not be, so why leave my money in there?’”” 
Bloomberg


 

With all of these convoluted headlines, I’m sure everything is just fine at one of the most dysfunctional banks in Germany.
Good confidence is the only thing that keeps a modern bank functioning when one considers the insane modern-day leverage ratios.  When confidence goes, that’s it.  The.  End.

(Anecdotal evidence – Deutsche Bank is:

  • A bank which takes 2+ days to make a small internal transfer between two Deutsche Bank accounts. – According to an acquaintance who has to work with Deutsche Bank as a business partner.
  • A bank which does not know how to properly train or instruct interns. – Three acquaintances have completed an internship there.  Not a good experience.

 

Silver lining of a major, systemically important bank collapsing: At least there will be some interesting topics to discuss this October during university lectures in Berlin; Namely – Things do not always happen the way they ‘should’ happen.  Especially Macroeconomics.

 

Comments

  1. Post
    Author
    Eric

    September 30th

    “Our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. … Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.” ~ John Cryan

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