Deutsche Bank

Have We Reached "Peak Fedspeak"?

Between a convoluted, self-referential reaction function and a cacophony of Fed speakers, the market simply can no longer process the FOMC's message and with that in mind, we bring you RBS’ Alberto Gallo who asks if perhaps we have reached “peak Fedspeak”.

Deflation = Debt + Demographics + Disruption

The cyclical fallout from the Great Financial Crisis and the secular deflationary “D’s” of excess Debt, tech Disruption, aging Demographics have been the major catalysts for deflation.

Glencore Production Cuts Backfire After World's Second Largest Miner Vows To Fill The Glencore Void

On Friday we said that "it is certain that any volume reductions by Glencore will be promptly taken advantage of by Glencore's competitors, because in a global deleveraging and commodity supercycle repricing, he who cooperates while others defect, always loses the game theory."And just as expected, overnight the world's second biggest mining company, Rio Tinto, warned that it will not cut copper production, saying it would be illogical to hold back output and leave space in the market for higher-cost rivals.

Dell Buys EMC In Record $67BN Deal: Creates "World's Largest Private Integrated Tech Company"

Just when you thought the M&A boom is over after a surge in bond yields that Goldman has repeatedly dubbed as "recessionary", and which will make the debt cost of any funding so high that there is barely any room for execution error, moments ago as had been extensively leaked previously, private Dell announced it would acquire tech giant EMC in a deal valued roughly $67 billion, while maintaining VMWare as a publicly-traded corporation. Good luck with raising the tens of billions in debt the deal will require: our best wish to Barclays, BofA, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, RBC who will all be underwriting the required debt financing to Dell.

RANsquawk Week Ahead video: 12th October - BoJ minutes are released on Tuesday, while investment banks are in focus as earnings season reaches full swing, with analysts looking for any effects of the global slowdown

  • BoJ minutes are due to be released on Tuesday with multiple central bank speakers on the slate to supplement the calendar
  • Investment Banks are in focus as earnings season starts in full swing, with analysts looking for whether the global slowdown had an impact on results

The Endgame Takes Shape: "Banning Capitalism And Bypassing Capital Markets"

"We believe that the path of least resistance would be to effectively ban capitalism and by-pass banking and capital markets altogether. We gave this policy change several names (such as “Cuba alternative”, “British Leyland”) but the essence of the new form of QE would be using central banks and public instrumentalities to directly inject “heroin into blood stream” rather than relying on system of incentives to drive investor behaviour."

Credit Suisse Stuns Investors With 50% Bigger-Than-Expected Capital Raise

Hot on the heels of Deutsche Bank's admission that all is not well, Credit Suisse's announcement last night of a major capital raise was greeted by buying pressure from investors. However, reality punched them in the face this morning as CS releasaed its investor day details and, as Bloomberg reports, is looking to raise up to CHF8 billion (almost 50% larger than Goldman Sachs investor survey suggested). Clearly, CS' has a much more massive capital shortfall than expected.

Saudi Arabia Declares Spending Moratorium As Oil Rout Bankrupts Kingdom

Last month, when King Salman arrived in Washington to a fleet of Mercedes S-Classes, we asked if, considering the current circumstances, cutting back on spending might be in order. Indeed, in the wake of Saudi Arabia's move to tap debt markets, rumors have been circulating for months that the kingdom has enlisted the help of "advisers" to help rein in the ballooning deficit. Now, Riyadh has effectively declared a spending moratorium in the face of self-inflicted crude carnage.

GoldCore's picture

Like other banks, Deutsche has been caught up in the Libor-rigging scandal, and faces another investigation in Switzerland for suspected price-fixing in the precious metal market.

Gillian Tett, ourselves and many others have warned that Deutsche and its massive derivative book has the potential to be a ”European Lehman Brothers”. Is Deutsche Bank, the largest holder of Warren Buffett’s “financial weapons of mass destruction” derivatives in trouble?

Frontrunning: October 8

  • Congress probing U.S. spy agencies' possible lapses on Russia (Reuters)
  • Defense Ministers From NATO Hit Out at Russian Action in Syria (WSJ)
  • U.S. Rules Out Cooperation With Russia as Moscow Launches First Naval Strikes on Syria (WSJ)
  • Man Who Called China's Boom and Bust Says Use This Rally to Sell (BBG)
  • For Volkswagen, New Questions Arise on U.S. Injury Reporting (BBG)
  • Deutsche Bank May Swell $14 Billion Selloff in China Bank Stakes (BBG)
  • Emerging market slowdown hits German exports (FT)

Futures Slump On Lack Of Chinese Euphoria Despite More Terrible Economic Data

It was supposed to be the day China's triumphantly returned to the markets from its Golden Holiday week off, and with global stocks soaring over 5% in the past 7 days, hopes were that the Shanghai Composite would close at least that much higher and then some, especially with the "National Team" cheerleading on the side and arresting any sellers. Sure enough, in early trading Chinese futures did seem willing to go with the script, and then everything fell apart when a weak Shanghai Composite open tried to stage a feeble rebound into mid-session, and then closed near the day lows even as the PBOC injected another CNY120 bn via reverse repo earlier.