Will Deutsche Bank Be Saved From Collapse?

Deutsche Bank shares tanking over 10% today (more than 30% since last Dec alone) is evidence that the market has finally awakened to the smell of the roses. DB, probably the most reckless too-big-to-fail bank for those who have not noticed, is merely at the leading edge of the wave of souring debts hitting the banks. The $7 billion asset write-down it took in 2015, while jaw dropping, does not quite adequately reflect the losses still to come from their significant exposures to the energy sector and EM loans. This calls into question the bank’s liquidity position, as it would take a mere 3.5% write-down of its asset base to wipe out its book value. The other elephant in the room which everyone does not even want to discuss is, of course, its off-balance sheet derivatives book. At $58 trillion notional (yes, T), no country would be able to save it if and when it blows.

Full article: http://investmentresearchdynamics.com/will-deutsche-bank-be-saved-from-collapse/

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