While Germany's largest lender would ultimately be rescued by the German government if needed, other banks in the region wouldn’t be able to count on such support, Gundlach said. “Deutsche Bank will be supported by Germany if push comes to shove, but what about Credit Suisse, which has shown a similar decline in stock price? Who’s there to bail them out?”
Profits at roughly a quarter of Chinese companies in a Reuters analysis were too low in the first half of this year to cover their debt servicing obligations, as earnings tumble and as corporate debt soars to record highs.
The United States government closed out the 2016 fiscal year that ended a few days ago on Friday September 30th with a debt level of $19,573,444,713,936.79. That’s an increase of $1,422,827,047,452.46 over last year’s fiscal year close.
"So for what it’s worth however the ECB decides to navigate their latest challenge we are less inclined to embrace the classic financial sector meltdown led risk off trade that forces core rates significantly lower. Or at least it would need a spectacular display of policy incompetence first. (On second thoughts..?!)"
Regardless of whether you’re a millionaire with multiple foreign bank accounts or a recent college graduate with a boatload of debt, the status of being a United States citizen brings with it a burden that will only grow heavier over time.
One day after Deutsche Bank stock soared from all time lows, on the back of what so far appears to have been a fabricated report sourced by AFP which relied on Twitter to "inform it" that the DOJ would reduce its RMBS settlement with the German Lender, today Bloomberg reported that Deutsche Bank and six of its managers were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank and manipulate the market.
Angela Merkel cannot afford to bail out Deutsche Bank given the hard line Berlin has taken against state aid in other European nations and the risk of a political backlash at home, a German media chorus blasted on Saturday.
Global stocks continued their selloff this morning, driven by surging speculation about the liquidity, solvency and viability of Deutsche Bank, which plunged 9% after opening in German trading today, dropping to a new all time single-digit low of €9.90, while its default risk soared to new all time highs.
With The SNB and BOJ already neck deep in their equity-buying experimentation, and even Janet Yellen hinting at it for The Fed, the most pressing question on most liquidity-hunting central-planer-watchers is - when will Draghi start buying stocks? The short answer, from ABN AMRO, is ECB equity purchases are unlikely in the near term.. and even so, The ECB would be increasing the risk on its balance sheet for uncertain, and at best modest gains in economic growth and inflation.
"The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be. One day, Deutsche Bank shares will go up 40 percent. And it will be the day the government bails them out. That jump will happen in a minute," Gundlach said. "It is about an event which is completely out of your control."