Deutsche Bank

Forget Brexit, It's The Banks Stupid!

Political instability for the EU is a significant and visible threat, but is not the immediate problem, which is financial. As a result of savings and spending imbalances, none of the core Eurozone states can stand on their own.

"We Have Reached The Point That Keynes Warned Of In His General Theory"

"We have arguably reached the point that Keynes warned of in his General Theory where demand for money and credit to satisfy what he labeled “non-speculative” motives has been more than satisfied...  At this point it is likely central bankers are “pushing on a string,” positively affecting prices for the financial markets’ flavor of the month but doing nothing for actual economic activity."

Is Another Financial Crisis Coming: This Chart May Have The Answer

There is one chart that shows that underneath the placid surface of the S&P not all is well. The chart is the following, and demonstrates the substantial recent selloff in US bank stocks, which have been a near-flawless 'canary in the coalmine' ahead of major market inflection points, and which have successfully predicted most major crashes inthe past several decades. 

How To Trade Brexit

on "Brexit": long gold, short peripheral debt versus bunds, long EUR vol vs GBP, short volatility/long risk once sterling troughs.
on "Bremain": long DM equities for the bearish positioning unwind and short volatility immediately; short Spanish & Italian bonds vs. gilts.

"Renormalization" Is Dead: The Market Is Pricing Just One Rate Hike Over Next 3 Years

Rates shock: market now pricing only one Fed hike over next 3 years. As bond yields in Europe and Japan hit new historical lows this week, the US 10y yield fell to a 4-year low, just 20bps above its 2012 historical lows. This followed a weak payrolls report, Brexit uncertainty, the beginning of the ECB’s corporate bond buying program and a very dovish June FOMC meeting which significantly cut rate forecasts in the out years. 

"The Fed Has Failed" - A Disturbing New Warning From Bank Of America

"Central banks have lost the “War against Deflation”. They have failed to stimulate animal spirits depressed by the 4D’s of excess Debt, financial Deleveraging, aging Demographics and technological Disruption. This changes if Quantitative Failure spreads from Europe & Japan to the US. A rise in US bank CDS and/or a dive in assets related to consumer & housing credit would be very negative for global asset prices in our view. Note the new whispers of a peak in the US consumer credit cycle which, if true, at a time of zero rates in an $18 trillion, consumer-led economy would be concerning."

Global Stocks Rebound As Brexit Odds Decline Following Tragic Death Of UK Lawmaker

While it may very well not last and all of yesterday's gains could evaporate instantly if the Brexit vote is set to take place as scheduled, all 10 industry groups in the MSCI All-Country World Index advanced, with the index rising 0.7% trimming the week’s drop 1.6%. The Stoxx Europe 600 Index rose 1.4%. Futures on the S&P 500 were little changed, after equities Thursday snapped their longest losing streak since February. . Oil rose, paring its biggest weekly decline in more than two months. Bond yields around the globe fell.

Terrorism As Pretext For Intervention In Middle East

This contradiction speaks volumes about the sheer hypocrisy and double standards of the Western powers: that, when it comes to securing 265 billion barrels of Saudi oil reserves and 100 billion barrels, each, of UAE and Kuwait that together constitutes 465 billion barrels, i.e. one-third of the world’s proven crude oil reserves, they are willing to overlook the excesses that have been committed by such Medieval regimes but when it comes to negotiating with the Islamist insurgents to reach political settlements and to let up on all the violence and spilling of blood in the region, they stand firm against the so-called “terrorists” as a matter of principle. Why do the Western powers overlook the excesses committed by Saudi Arabia where Shari’a is the law of the land and Hudood-style executions are an everyday occurrence?

Deutsche Bank: "This Chart Is Even More Appropriate To Show A Broken Financial System"

"Yesterday we said that the chart we published on 10 year bund yields back to 1807 was an excellent way of showing a broken financial system well maybe the chart in today's PDF showing this Swiss 2049 bond yield is even more appropriate. You now have to pay the Swiss government for the privilege of lending to them for nearly 33 years."

Global Stocks Continue To Plunge As Central Banks Disappoint, Brexit Looms

Futures on the S&P 500 slipped 0.3%, as U.S. equities are on track to extend losses for a sixth day.  Europe's Stoxx 600 fell to a four-month low, sliding 1% for its sixth decline in seven days, and U.S. crude retreated for a sixth day in the longest losing streak since February. Bond yields sank to records in Germany, Australia after Japan as Federal Reserve Chair Janet Yellen said next week’s U.K. vote on European Union membership was a factor in the decision to hold interest rates steady. The Yen surged more than 2% as the Bank of Japan refrained from adding any new stimulus,

These Are The Banks That Would Be Hardest Hit In The Event Of A Brexit

The problems that UK banks will encounter would be twofold: they would potentially lose access to European markets; and the next wave of concern would be presumably a weaker pound accompanied by higher interest rates - the latter hurting those who are already highly indebted. With Brexit odds at an all-time high, here is a succinct overview of the banks that would be the most affected should the UK vote to leave.