Deutsche Bank Is Crashing Again As European Banks Slide To Crisis Lows
"As of this moment, various European banks but most prominently Deutsche Bank... ... as well as Credit Suisse and RBS, have been crashing back to lows hit in early February and then all the way back to the March 2009 "the world is ending" lows. We commented on this yesterday using, ironically enough, a note by Deutsche Bank strategist Jim Reid, in which we showed all the things that were not supposed to happen when Draghi unleashed his massive quad-bazooka QE expansion.
The problem is that now that global central banks are more focused on appeasing China and keeping the USD weaker (by way of a dovish, non-data dependent Fed), the pain for Europe (and Japan), and their currencies, and their banking sector, will likely only get worse. This is precisely the case proposed by Francesco Filia of Fasanara Capital, who explains below his "Short European Bank Thesis."
Here is his note:
Here below, we update our views on negative rates and our consequential short European Banks equity and sub debt thesis. In a nutshell, we think that not only no bank is ever designed to survive in an environment of deeply negative rates for a prolonged period of time, but their business model is further impaired by negatively sloping interest rate curves. In a twisted unwelcome side-effect following..."
http://www.zerohedge.com/node/528284
All the gains post-Draghi’s bazooka-est efforts in March have gone as bank credit risk is spiking…
and the last 4 weeks have seen the biggest collapse in European banking stocks since April 2012.
Having blown his wad in March and been front-run by every Tom, Dick, and Harry trader, “whatever it takes” appears to be failing hard and with nothing left up his sleeves, Mario may not be so super anymore.
