Moments ago, in response to DB's open querry on Twitter whether the Dax is "overreacting", we highlighted DB's soaring CDS and asked if perhaps the market was not underreacting. Minutes later the market opined, by sending DB stock to new all time lows.
When it rains it pours...
WTI keeps dead-cat-bouncing thanks to the algos and crashing thanks to reality. This morning's reality check on the overnight ramp comes courtesy of a double-whammy from Goldman ("wouldn't be surprised to see WTI in the teens") and The IEA which increased its estimate of excess-supply drastically. This has dragged WTI back below $30 once again and where oil goes, stocks go...
The ECB's "whatever it takes" ponzi strategy of keeping the dream alive in Europe's financial system has finally been caught as rapid collapse in the banking system is contagiously spreading to peripheral sovereigns once again. Portugal risk spreads are up 120bps in the last 3 weeks and Spain and Italy are soaring over 35 and 50bps respectively as the almost self-dealing nature of banks buying "risk-free" EU bonds and repoing for cash via The ECB comes home to roost...
"You can tell them that Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position. On Monday, we took advantage of this strength to reassure the market of our capacity and commitment to pay coupons to investors who hold our Additional Tier 1 capital. This type of instrument has been the subject of recent market concern."
Or, said otherwise, "Deutsche Bank is fine." And the selling has resumed...
We now expect the March package to include a larger deposit rate cut of 20bp, taking it to -0.5%
We now expect another package after that, possibly as early as June
We expect this second package to take the deposit rate to -0.7% and to extent QE until end-2017
Our forecast change is motivated by risk management amidst low inflation, rather than a macro forecast change
- Investors dump stocks (Reuters)
- Global Bond Rally Near `Panic' Level With Japan Yield Below Zero (BBG)
- Global Growth Fears Hit Bank Stocks (WSJ)
- GOP Race for Second in New Hampshire Intensifies (WSJ)
- N.H. Primary: Where Each 2016 Candidate Needs to Place to Build Momentum (WSJ)
"We need to find out what happened, if the cause of the crash was based on the technology or human failure. This is a huge shock."
With China offline for the rest of the week, global markets have found a new Asian bogeyman in the face of Japan which as reported last night saw its markets crash, and the Yen soar, showing that less than 2 weeks after the BOJ unveiled NIRP, yet another central bank has lost control.
"...investors around the world are realizing that the jig is up... We’re all going to suffer… Central Banks will panic but the market knows this is over and we’re not going to play this game anymore."
"Today Deutsche Bank published updated information related to its 2016 and 2017 payment capacity for Additional Tier 1 (AT1) coupons based on preliminary and unaudited figures. The 2016 payment capacity is estimated to be approximately EUR 1 billion, sufficient to pay AT1 coupons of approximately EUR 0.35 billion on 30 April 2016."
The total and utter failure of The BoJ continues to accelerate...
Not only has free speech become a four-letter word - profane, obscene, uncouth, not to be uttered in so-called public places - but in more and more cases, the government deems free speech to be downright dangerous and in some instances illegal. Yet by allowing the government to whittle away at cherished First Amendment freedoms - which form the backbone of the Bill of Rights - we have evolved into a society that would not only be abhorrent to the founders of this country but would be hostile to the words they used to birth this nation.
“I don’t think there’s a whole lot from my generation that are still in the industry"..."The business has to be downsized,” said Keith Underwood, a foreign-exchange consultant who ended a 25-year trading career, including at Lloyds Banking Group Plc, in 2014. But it’s not easy “for people who have been in a market for many, many years to see that they’ve been replaced by an algorithm.”