Wednesday, 20 July 2016

Deutsche Buy-nk?

Image result for deutsche bank

Okay I'm going to stick my contrarian neck out and say I'm putting DB in my buy watchlist.

To clarify, I am not buying. Perhaps this is the time one should start building a position but my risk profile doesn't match that kind of strategy. I want to see more confirmation geo-politically and technically before that would be an option.

reasoning


Yesterday I noted that Standard & Poor's had downgraded DB's credit rating. Experts always seem to be the last to cotton on to what's been going on, which suggests to me Deutsche might be bottoming.

To me the almost certain ECB/EU bank bailout is now almost definitely certain as: 1. Juncker won't go down without a fight (and several bottles of claret); 2. From my observations, there's nothing more motivating for an institution (ECB), than it's actions being tacitly approved by another, in this case, S&P's.

Image result for juncker
It feels nice, doesn't it Mario?

Admittedly I've been on twitter (a lot) telling anyone who'd listen what a rancid turd DB is. In my mind it still is a rancid turd but it's a potentially stabilising one.

If the ECB conducts its alchemy on DB, that of "vanishing" toxic debt from its balance sheets and buying (even more) of it's own debt (corporate bonds), where would be the risk?

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