*Official* General Market Chit Chat Thread - Part 2

[Dyhalt]

Wah. Then they shouldn't buy back their own. They should save themselves.

Problem with DB is they are super highly leveraged compare to US banks, so when oil price didn't go up as expected, they took huge losses in derivatives.

The negative interest rate is also squeezing their profitability. So even though they are trading way below book value, nobody dare to buy them.

Personally I think unless they work with government for a well planned rescue package, they are going to make Lehman crisis looks like just a side show.

 

[lalalalalala]

You mean this one? They sure got money
Deutsche Bank to Buy Back $5.4 Billion Bonds in Euros, Dollars - Bloomberg ...

Buying back bonds isn't good. Most of the time your budget factors in the bonds with coupons paid out. Once u do a buyback you immediately lose that 'loan' and your cashflow becomes 2x tighter

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[Shion]

Therefore we need not be too worried since the govt will definitely help Deutsche Bank ?

 

[JW2015]

Problem with DB is they are super highly leveraged compare to US banks, so when oil price didn't go up as expected, they took huge losses in derivatives.

The negative interest rate is also squeezing their profitability. So even though they are trading way below book value, nobody dare to buy them.

Personally I think unless they work with government for a well planned rescue package, they are going to make Lehman crisis looks like just a side show.

Bro you work in bank are. You so crystal clear

 

[Darkshadows]

Hmm guys, would you take scrip or cash dividend?

 

[Genosis]

Therefore we need not be too worried since the govt will definitely help Deutsche Bank ?

Ya.....the German govt is strong enough to bail out DB to prevent contagion spreading to other European banks.

Anyway, this 'CoCo bonds' issue is old news. The German authorities oredi knew about this problem, so I am sure the Germans are monitoring the situation.

However, if this situation happens in one of PIIGS countries, then it is a different story......

 

[Genosis]

Hmm guys, would you take scrip or cash dividend?

SCRIP for me!

 

[xSieghartx]

Hmm guys, would you take scrip or cash dividend?

Gonna be taking cash, then invest in DBS.

 

[Pensive]

Problem with DB is they are super highly leveraged compare to US banks, so when oil price didn't go up as expected, they took huge losses in derivatives.

The negative interest rate is also squeezing their profitability. So even though they are trading way below book value, nobody dare to buy them.

Personally I think unless they work with government for a well planned rescue package, they are going to make Lehman crisis looks like just a side show.

That will be a major catastrophe. Even if they get bailed out, it will still shake the financial markets. But it may well be that they are the new black swan since Lehman.

 

[Aventad0r]

Hmm guys, would you take scrip or cash dividend?

Scrip for me

 

[Daimon]

That will be a major catastrophe. Even if they get bailed out, it will still shake the financial markets. But it may well be that they are the new black swan since Lehman.

DB is German national bank. It's like DBS. But globally big player.

 

[Dyhalt]

Therefore we need not be too worried since the govt will definitely help Deutsche Bank ?

German government wants to do all they can to stop fear contagion, but the German public might think otherwise.

Biggest problem is potential bank run caused by fear. Many holders of DB Coco bonds/ DB bonds buy it because they believe DB will NEVER collapse. Problem is DB is just as risky as any other commercial banks in Europe.

If a top notch bank is paying you 6~7% interest a year for its Coco bonds, you should know something is not right... Now bondholders are shocked that their bonds might be converted to DB stocks because they didnt read the fine prints when they bought the bond years back.

 

[Sinkie]

sembmarine hiong !

 

[Darkshadows]

German government wants to do all they can to stop fear contagion, but the German public might think otherwise.

Biggest problem is potential bank run caused by fear. Many holders of DB Coco bonds/ DB bonds buy it because they believe DB will NEVER collapse. Problem is DB is just as risky as any other commercial banks in Europe.

If a top notch bank is paying you 6~7% interest a year for its Coco bonds, you should know something is not right... Now bondholders are shocked that their bonds might be converted to DB stocks because they didnt read the fine prints when they bought the bond years back.

If it's converted to stock...they might not even get back their money if DB collapse.

 

[Daimon]

If it's converted to stock...they might not even get back their money if DB collapse.

DB is another too big to fail.

 

[Dyhalt]

If it's converted to stock...they might not even get back their money if DB collapse.

I'm sure they will find a way to solve it though some backdoor rescue package.

Nobody know what would happen if the biggest global derivative player go under..... too scary to think about it.

 

[Pensive]

DB is German national bank. It's like DBS. But globally big player.

Precisely. That's what makes it scary and a major catastrophe if they even need a bailout by their govt.

 

[Average]

Small pullback, evening chiong 1% can.

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[Daimon]

Precisely. That's what makes it scary and a major catastrophe if they even need a bailout by their govt.

Why scary? In the age we live in, it's very normal.

 

[Daimon]

I'm sure they will find a way to solve it though some backdoor rescue package.

Nobody know what would happen if the biggest global derivative player go under..... too scary to think about it.

If collapse, then we are back to 2008. So governments will not allow it to happen. Therefore a bailout will happen.