Charting The Epic Collapse Of The World's Most Systemically Dangerous Bank

[Grizz]

"After a hard-hitting sequence of scandals, poor decisions, and unfortunate events,Visual Capitalist's Jeff Desjardins notes that Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low."

"
Even more stunning is the long-term view of the German institution’s downward spiral.

With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007."

Charting The Epic Collapse Of The World's Most Systemically Dangerous Bank | Zero Hedge

Watch out boys and girls, it's beginning.

 

[Grizz]

"
Translation: things are in full-on crisis mode.

In the following weeks, here’s what happened:

• May 16, 2016: Berenberg Bank warns that DB’s woes may be “insurmountable”, noting that DB is more than 40x levered.
• June 2, 2016: Two ex-DB employees are charged in ongoing U.S. Libor probe for rigging interest rates. Meanwhile, the UK’s Financial Conduct Authority says there are at least 29 DB employees involved in the scandal.
• June 23, 2016: Brexit decision hits DB hard. The bank is the largest European bank in London and receives 19% of its revenues from the UK.
• June 29, 2016: IMF issues statement that “DB appears to be the most important net contributor to systematic risks”.
• June 30, 2016: Federal Reserve announces that DB fails Fed stress test in US, due to “poor risk management and financial planning”.
  "

 

[tyroneweaver]

I sometimes wonder if low interest rates are a good thing. Banks can't make many. People just spend and barrow rather than learning the principle of saving.
Just my opinion.

 

[Toro]

Yeah, ZeroHedge is about as credible as World Weekly News, but DB is a problem, no doubt about it.

The German state will probably stand behind it, though.

 

[Moonglow]

With low interest rates, businesses are taking on more debt than income..Which is always a bad move....Once rates go up, the lean years will kick in..The banks are making money, on loans....but only high interest loans funneled through their high interest loan programs and credit cards...

 

[Mac1958]

I sometimes wonder if low interest rates are a good thing. Banks can't make many. People just spend and barrow rather than learning the principle of saving. Just my opinion.

Like most things in finance, they're a mixed bag; a bad quality for every good quality.
.

 

[Toro]

Interest rates that are below the rate that they otherwise would be is like any other artificially-set price. It creates distortions.

The question is whether they are too low?

I think they are.

If it stays this way, it will eventually destroy the financial system.