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Deutsche Bank Tells Clients To Put "Risk Off" Trades Ahead Of December 9 Summit, On Hopes Market Sell Off Will Shock ECB Into Printing
While our assessment that the latest and certainly not greatest European summit due this Friday will be yet another dud (confirmed by today's Merkozy non-statement which took both Eurobonds and the ECB off the table), we are surprised to learn that none other than Deutsche Bank has once again joined our call that the market continues to get ahead of itself, in the process making life for the ECB that much harder. As BBG reports, Deutsche Bank's Dominic Konstam has advised clients to re-establish risk-off trades ahead of the December 9 summit. In his note he adds: "We think the current track of European policy is not credible in that austerity ultimately undermines the banks, increasing the need for recapitalization and asset liquidation, and threatening a vicious circle." And therein, as noted over the weekend, lies the rub: European banks are desperate for a longer-term solution (not the Fed's FX swap band aid), which can only come if and only if the ECB relents and starts printing. This however, will not come as long as the stock market keeps diverging from broad risk indicators, and rises purely on hope and a career risks Santa rally. In fact, as DB today confirms, it makes the case for the ECB (or Fed for that matter) to print that much harder, which considering there is no additional fiscal stimulus coming either in the US (thank you congressional gridlock) or Europe (thank you Germany-imposed austerity), means only additional monetary easing can do anything to push markets higher out of the recent trading range. Alas, we doubt any of the momentum chasing algos caught once again reacting to the market, will care much about this, and instead once the inevitable Risk Off day once again comes - which it will: it's mathematically certain - will simply accentuate the downside move as one side of the boat moves to the other at the same time.
Here is how Deutsche Bank continues to beg for the market to finally sell off and for the ECB to do the only thing that can buy some time in a slightly longer time-frame than just day to day.
From Dominic Constam:
- We think it is too early to return to “risk on” trades.
- In the short run, European “fiscal integration” means “fiscal austerity”.
- We think the current track of European policy is not credible in that austerity ultimately undermines the banks, increasing the need for recapitalization and asset liquidation, and threatening a vicious circle.
- We view 2012 as a year of two distinct halves; the first of which is “risk off”, the second of which is “risk on”.
- The transition from the first to the second will be marked by central bank (read: ECB), catch up.
- We continue to expect 10y Treasuries to trade to 1.75% early in 2012, with the curve flattening, spreads widening, and LIBOR pressured higher.
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Isnt that a pretty piece of advice.
-DB Prop Desk
No, it's do exactly as I say (at least now) so they can short...advice to clients my ass.
They're frontrunning the decline.
mathmatical certainty = SP 850; and yet she rises up from the dead every day -- wtf!?!?!?
The only mathematical certainty is pushing up daisies. Even taxes will have their day in the dirt. I hope everybody has realized by now that the paper game is completely rigged, and if you want to save your assets you'd better be in physical gold and silver. If they hyperinflate then stocks will go through the roof, but the price of gold is still going to equal the DOW in due time whether there's inflation or deflation.
The European situation in a snail shell...................
"It's your turn to pick up the tab"
"Ok, but who in the fuck ordered lobster, caviar, and Cristal?"
"It was probably Greece, Spain, Italy, Portugal, or France. Well, I'm not sure. Could be anybody I didn't mention too."
Don’t forget the rare wines our bought economists and nobles guzzle yearly at Davos - like the 1971 Chateau Petrus premier cru that sells for $1,700.
The way Ron Paul puts it is that “a government monopoly on the issuance of money is purely a method of central control over the economy (world?).”
Paul has noted that “confidence in the dollar is plummeting, confidence in the euro has been shattered by the European bond crisis, and beleaguered consumers and investors are slowly but surely awakening to the fact that government-issued currencies do not hold their value.”
Warns Paul, “If you can be forced to accept the government’s increasingly devalued dollar, there is no limit to how far the government will go to debauch the currency. Anyone who attempts to create a market based currency – meaning a currency with real value as determined by markets – threatens to embarrass the federal government and expose the folly of our fiat monetary system. So the government destroys competition through its usual tools of arrest, confiscation, and incarceration.” And war, of course.
G. Edward Griffin warned long ago that ‘the Federal Reserve can now inflate our money supply by using literally any debt in the world…and unless we zero in on the Fed itself, we will just be playing political games with no chance of winning.”
“There can be no more iniquitous alliance than to have the politicians at the service of the bankers, unless perhaps it is to have the military at the service of the bankers too.” – London Banker
The world is moving away from the petro dollar monopoly. Russia, Nigeria, and Zimbabwe are actively seeking a Yuan denominated trade mechanism. The Federal Reserve can only really do 3 things. Inflate, deflate, or do nothing. It is Con-gress that is spending us into debt oblivion, creating the need to inflate the debt away. Central banking may be the means of controlling the money supply, and lobbying for puppet representation, but it is this puppet representation that holds the keys and needs to change what they're doing to have any real impact. Ending the Fed won't do any good if our leaders continue to be irresponsible.
I like chart porn...No, I LOVE chart porn.
I've been looking for a SGS inflation adjusted REAL Housing Value (Calculated Risk) chart to no avail.
I did find this--
http://goldprice.org/james-turk/
Friday, January 25, 2008The "Real" Gold Price
Where James Turk takes SGS alternate inflation and applies it to gold.
Unfortunately, he's not updateg it.
Make of it what you will.
The only good news in debt destruction is the following: while it takes decades to build debts, it goes faster to destroy once it becomes apparent that productivity gains are not enough to increase GDP while keeping nominal debt constant. As per the "US is Japan", it is wrong on the unemployment comp, it is wrong on the savings comp, it wrong on the export comp, it is wrong on the inflation comp, which never topped 1.5% during the whole period despite being at very low unemployment, it is also wrong onthe printing comp . Japan was very reluctant on printing and printed and that is why they "failed". Bernake on the other hand is much more likely "succeed" in creating inflation wherecJapan "failed".
Right vast-dom, my 'cold feet' theory, what are they waiting for?
please sell us back your risk trades so we can cover our shorts!
Exactly what I thought. Risk-Off going into Friday, where they will undoubtedly come up with another "great" rumor for the market to latch onto on Monday? Or even into the close Friday? Ballsy. Remember, buy the rumor, sell immeidately after the rumor...
The ZHeeple: Slaughtered again.
But not you. You are so intelligent that you can't even be bothered to tell us why $3600 is your entry point for gold.
It's called an 'all in' entry point for a reason. $3476. Do your homework. You guys have been short equities since 666, LoL. Dummies.
$3476. Do the homework for me.
What better buy signal(apart from a Goldman sell/avoid)could one have?
Shock therapy, bitchez.
Isn't DB one of the banks that is supposed to "fail" or become "nationalized"??
Why are they now suddenly the "experts"??
They're fine. They're only down 22% on the year.
Perhaps tongue in cheek, as suggested by Tyler's empahsis on begging for ECB printing from a bank on the ropes.
Also, if we eliminated every Bank that should be nationalized and/or if left to their own devices would fail, we would be left with comments from JPM ONLY.
Agreed, except I would fear that the comments would be from the Treasurie of the Unted States of JPM.
Another fucking bifurcated year.
Where the 2nd half is always better than the first half.
Because the EU will be in a severe recession in the 2nd half, which will of course be awesome. Because after 3 years of unprecedented correlations, North America is definately going to decouple.
Don't look now but China is actually down 1 % since the RRR cut.#btfd
BLITZKRIEG EFFECT!!
Deutsche management will be furloughed and sent off to the re-education camp.
Could anybody tell me where are the market going to sell off? EZ is shit, US is shit, JP is shit, BRIC is shit?
Where is the useless market going to function on?
fraudulent numbers, rumor and presumption..the usual
a mello cup
Fear of a currenice/bond market collapse.
cocaïne.
IMO putting a date on the collapse almost ensures it won't collapse in that date. Unfortunately.
Just how bad is the situation in DB? Oh dear, they are SCREAMING for ECB bail out almost every day. And the other insolvent megabanks in Europe of course have the same single line written in their letters to the Santa Claus.
OT: Trump the douche
http://today.msnbc.msn.com/id/45551313/ns/today-books/t/trump-huntsman-p...
I'd wonder if they are bank x?
Maybe this comment is coming from ignorance (and if so let me know) but isn't the value of a currency relative to other currencies that its competing against. I mean, even if they print in Europe if they print even more in the States wouldn't its value still rise against the dollar. I think some of the reason that inflation isn't higher here in the US is because most of the money is being captured at the top by the banks and isn't being distributed throughout the rest of the economy. Sure, the prices of commodities have risen but you haven't seen the rampant inflation you would expect because workers wages haven't risen in response.
Basically what I'm trying to say is that although Europe has many problems, they pale in comparison to problems over here. Why don't European leaders print just enough to make sure nobody defaults and engage in just enough austerity to address some of the obvious problems in retirement age, pensions, and like that they have without overdoing it and destroying their economies? Just pass the ball back to us and watch as we collapse into the third world country we deserve to be. Our political system is broken, we're hundreds of trillions of dollars more in debt, we're dependent on cheap oil, and we don't produce anything anymore. Does anybody really believe that our congress is gonna engage in any meaningful reforms to address our debt problem? The only thing we can do over here is print and eventually we soon won't be able to do even that anymore without causing extreme inflation.
All these problems were caused and are perpetuated by the corrupt US banking system. Don't surrender your national sovereignty or your way of life to these unelected EU bureaucrats without a fight. The US economy is the one that deserves to be punished.
No, Europe's banks are leveraged 3 times more than US banks, not trying to downplay the US's problems but Europe is on deck, US is a few batters behind.
Yep. That's they way I've been reading it too.
The last to collapse "wins."
Eruopean Banks, US Banks..... what does it matter?? They are most certainly own by a few Illuminati heads behind the shadows of the NWO.
I don't believe a word these clowns say.
When the fat girl in the row boat drops her potato chips and leans over, to the other side, to pick them up the water rushes in. Never a pretty picture, and it won't be here either.
http://vegasxau.blogspot.com
When does the boat capsize?
"We think it is too early to return to “risk on” trades."
Deep thoughts. Do people pay for this kind of advice? I could be a trillionaire.
Unfortunately they must - look at Merkel & Sarkozy - they have said nothing meaningful for months! The truth is that the only constant has been the ever increasing impact of volatilty - Wish I had the volatilty franchise in 2011 - I too could be a trillionaire!
Come on, Robotrader just told to you to buy into this "strongest market ever".
How DOES ONE SPELL EXTORTION?
After reviewing the size of the hole in our books, we think its crazy to put a risk on trade.
Sincerely,
The Deutsche bank analysis team, with special thanks to our accounting colleagues.
Wow wee , Screw DB fuckers.
I would NOT go long this market longer than a 2 point move in ES futures. KO and MCD have either been selling off the last few days or going no where. These are the big companies that will be hurt the most by Euro failure. Watch those stocks ...... why are they NOT moving up with rest of market in past 3 or 4 days?
better pay your cable bill or buy tomorrow's newspaper....MCD = 52 week high>>>>
I heard that MCD came out with the McCDS on Italy and they're in trouble.
Naaaaah....they're on the $ menu and selling well!!!
So sell gold/silver... again.
Translation "We missed the run-up, please sell off so we can get onboard"
SCARE them into printing! Oh man this is an outright clownshow at this point.
SO lets see....we put on 'risk off' trades now, tank the market to 'scare them', then news of more printing will get us where....back to where we are now?
RETARDS!
I think they will print.
Or, they will assasinate..
And then they will print.
64K EU question. What happens if the ECB does print?
Does the Euro go down or up? If the Euro goes down, does the US Market tank with a perfect correlation to the Euro or does the correlation magically disappear overnight.
Does the Dollar rally and kill commodities and squash any hope of inflation to juice the world economy.
These guys are damned if they do, damned if they don't. It's going to be up to the MSM to spin whatever happens into a happy cake for everyone to have a piece.
BATTLEFIELD MAIN STREETPentagon project lets police forces – even in small towns – arm themselves with military gear
http://www.thedaily.com/page/2011/12/05/120511-news-militarized-police-1...It's getting more and more obvious what their plan is, but the people don't see it for what is is. The militarization has been allowed to creep into our lives at a slow pace to the point that they are operating right out in the open. Yet ,the sheeple don't care.
@Dr Engali : The writing is on the wall. Operation "Clean up OWS" was an obvious ploy and I beleive that last nail in the coffin to real freedom of expression and assembly in the US (and the rest of the dev world will follow). Through a combination of repression, electronic surveillance and spooky political threats combined with the dulling of the will and impoverishment of the masses. Heck, if silly Rupert Murdoch could illegally tap the phones of the biggest stars for years undetected, imagine how brain-dead simple it would be for the NSA to monitor every word you speak, write or even dream.
I agree with you. Their ability to lull people back to sleep has been astounding. And they have done a good job creating a division between Tea party members and Occupy Wallsreet. Effectively neutering and or co-opting both movements.
Don't look now, but the bank cross-town from DB (Commerz) just cut their Euro forecast on debt agreement pessism.
Ita;ly big winner, US big loser in Treasuries. Will led Big Ben to QE3!!!!!!
E1 Trillion Cash Infusion into Eurozone - Fed May Enter "Bailout Bonanza!" - Italy, Belgium, Spain and France Big Winners in Bond Market, US Biggest Loser
http://confoundedinterest.wordpress.com
One of these days we are going to come in and this non-liquid hopium market is going to be down 1000 pts on the open. Then finally , maybe reality will set in.
Time for Europe to threaten Bernanke for a bailout. Bernanke and the Fed will do anything to save it's banks. Threaten to take down the world financial system if Bernanke and the Fed don't keep providing money. Time for all of Europe take advantage of the biggest money printer of our times, egotistic Ben Bernanke. PIIGS you can now lean on Ben Bernanke and the Fed through the IMF. Let the US Federal Reserve inflate their balance sheet by trillions more.
On the basis that you cannot believe a word these lying thieves say this is maximum double bullish...
if i were a bankster crook in charge, you'd know what i'd do? the night that i call for a market crash, the internet would crash in synch! ha! all yours monies belongs to me now, suckers!
Here's The Central Bank Conspiracy Theory That Art Cashin Just Explained On CNBC
Read more: http://www.businessinsider.com/art-cashin-on-the-new-theory-on-wall-street-for-why-the-worlds-central-banks-intervened-2011-12#ixzz1fgGjrphx
Could this reference to weak bank domino be the french insurance corporate AMA?
Just asking, as it is believed that both Groupe-ama as the Commerzbank in Germany are liqudity and solvency strapped, and needed USD desperately short term.
DB to the world: Ok, everyone, we really need you to sign this petition by selling your stocks and commodities and buying U.S. Treasuries, so we won't have to sell more of our own shares, diluting our shareholders.
Great advice by Deutche Bank - Great 9-month late advice.
Also, what will be the reaction of oil price at the current stage if markets decide for some reason to start reflecting fundamentals (which I highly doubt), if the ECB considers printing that is?
Is the current oil price a product of market pumping due to the Iran charade, or is it the result of Fed's market pumping, which allowed cheap money into commodities?
I regard the FED : ECB swaps as quasi printing anyway...just electronic numbers created in accounts...amounts that didnt exist before the swap.