Don’t look now. But everyone’s “favorite” systemically important global mega-bank is on the edge of a precipice. More specifically, shares of Germany’s Deutsche Bank (DB) are falling sharply again, and within a few pennies of an all-time low. Its bonds are also weakening, and the lousy action appears to be weighing a bit on the financial sector overall here. The latest carnage stems from a move by the Department of Justice to extract as much as $14 billion in fines from the bank for its actions during the mortgage and credit market crisis. But DB was already suffering from concerns over weak capital levels, lousy earnings trends, rising credit losses, tight interest rate spreads, and more.Â
I know the Fed and BOJ are front and center here in terms of investor mindshare. But keep a close eye on Deutsche Bank. If the stock keeps melting down, it will get noticed.
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I’ve noticed in the media a lot of reports on fines (HSBC, RBS et al) over the past couple of years. Governments around the world who dump huge fines on banks and expect it to have *no effect* on them are simply weakening the whole system.
“..banks around the world??”… excuse me..its only our DOJ doing this..just wait till the US DOLLAR is no longer the KING of the central banking system…[just around the corner people].
We tell governments to report on OUR citizens finances in THEIR COUNTRY, we fine banks whose SOVEREIGNTY is overlooked by our “dept of whatever” as if they own the world ! We control their purchases by insisting on OUR dollars…..
YOU GET WHAT YOU GIVE ! Unfortunately, it will be the US people who will suffer….not the DC crowd..
LPP
Please show trades.