pv78
Forumer attivo
C'è già qualcuno che la pensa come te.
Deutsche Bank: Everyone Take A Deep Breath
Sep. 30, 2016 2:41 AM ET
|
4 comments
|
About: Deutsche Bank AG (DB)
FIG Ideas
Follow(128 followers)
Long-term horizon, medium-term horizon, long/short equity, long only
Send Message
Summary
Opinions are swirling about Deutsche Bank.
There is no question the German government would ultimately support Deutsche.
It is for hyper rational investors only, but I would start buying small: in it to win it.
Jeffrey Gundlach was quoted yesterday as saying, "The market is going to push down Deutsche Bank until there is some recognition of support".
It certainly feels this way. The latest leg down in DBK was triggered by the rumour that Angela Merkel had ruled out supporting the bank.
There is something very plausible about this line of thinking. Banks are under pressure: we have Wells Fargo explaining itself on Capitol Hill, Credit Suisse CEO Tidjane Thiam describing the European sector as "uninvestable" and Deutsche Bank (NYSE:DB) exploring new lows daily.
Nothing so far has suggested that if - and it remains a very big if - Deutsche Bank needed German state support, such support would be withheld. If the collapse of Lehman Brothers did anything for the world economy, it was to show the impact of letting a major, interconnected bank fall. John Mack's reaction when this question was raised in February, another time Deutsche was under intense pressure, is instructive: "It's the GERMAN bank...." (emphasis and upper case added).
Chancellor Merkel, in saying no rescue is planned, was simply observing the hierarchy carried in EU rules on aid to private sector companies. First, the company has to be in a state of collapse, and Deutsche is not. Second, after equity holders are wiped out, holders of subordinated, equity linked debt must be bailed in. If then the company still needs assistance, state aid can be applied. To my mind, imagining that the German government would not then assist Deutsche Bank is unrealistic.
Yes, some hedge funds limited their risk exposure to Deutsche yesterday. There may well be a few more. After all, hedge funds often act in a herd like fashion. I thought the most interesting item in this piece of news flow was Deutsche Bank's response, and I would urge investors to consider it:
"Our trading clients are amongst the world's most sophisticated investors," Deutsche Bank said in an emailed statement to CNBC. "We are confident that the vast majority of them have a full understanding of our stable financial position, the current macro-economic environment, the litigation process in the U.S. and the progress we are making with our strategy."
Critical to the appreciation of this "financial position" is Deutsche's liquidity. Deutsche has over €40bn of liquidity above its short term wholesale funding commitment, and the total commitment is over €200bn. Backing everything up in Europe is TLTRO II. This means that counterparties will keep taking DBK's name.
The Deutsche statement mentions the "litigation process in the US" as something that is believes clients understand. And investors should too. The one fundamental threat to DBK here is that the DoJ has presented it with a demand for $14bn in settlement of the RMBS sales issue. First, The DOJ made a similarly sized demand of Goldman Sachs over RMBS and ended up settling for much less. Second, it would seem unrealistic that the DoJ is unaware that this demand, if met, would push DBK below its capital adequacy thresholds. And it therefore, to me at least, seems unrealistic that the DoJ would pursue the full claim. This is an opening gambit, and no more. And until the settlement is reached, DBK has the capital.
If I were ING, I might be politely asking if Deutsche would like to sell me an asset management company, but I'm not, and Deutsche wouldn't.
My own disposition is to start buying small. I don't think Deutsche will fail, I do think it will settle with the DoJ for an amount that leaves its capital ratios intact, though it will probably be close. But I think it has a steady revenue base and this is a great position to start restructuring a chronically inefficient cost base from. You have to be in it to win it.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Mi trova d' accordo.Anche se ritengo non realistico anche l' impiego del bail-in,che nel caso dell' investitore sarebbe equivalente ad un fallimento.Questo perchè DB è un rischio potenziale,non una banca sull' orlo del fallimento.La multa poi,non la considero neppure:l' importo è una mera ripicca per la multa di Apple.Ci sarà,ma di rilevanza molto minore.
Ovviamente non sono un abile forumer come molti che acquistano sui minimi e vendono sui massimi.
Quindi mi tengo le mie perdite virtuali e mi godo le cedole,in attesa di tempi migliori,anche considerando che le preferred hanno call 2018.....
Cordiali saluti
) Newcastle Investment US65105M2070 a 25,93...
