Menu Close
Posted in Other Guys

Deutsche Bank’s 90% Stock Collapse And The ECB’s Attempted Rescue In One Chart

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

Deutsche Bank, the European Union’s largest bank, has suffered a 90% stock price decline since its peak on May 11, 2007.  The European Central Bank (ECB) rode to the rescue like John Wayne in a John Ford US Cavalry flick.

db070316

This chart allows you to see the attempt of the ECB to stimulate growth in the European economy and save the banks.  After Deutsche Bank’s stock price peaked in May 2007, it began to nosedive. The financial crisis set it and the ECB reacted with lowering rates and performing asset purchases (like the Federal Reserve). While the ECB began to trim their asset purchases in 2013, they had to start up asset purchases again and cut the main refinancing rate once again in late 2014.

Here is Deutsche Bank’s credit default spread post financial crisis.

dbcdsddd

Deutsche Banks remains stranded on the rocks after the EU’s economic and financial Jutland (the largest naval battle of World War I, damaging both the British and German naval fleets).

Deutsche Bank has a tier 1 capital ratio of about 14%, down from about 17% in 2013.

dbtie1

Deutsche Bank’s Earnings Per Share (EPS) resembles a German Stuka (Junkers Ju-87) dive bomber from World War II.

dbeps

Of course, Europe has sub-2% GDP growth (except for the UK) with almost nonexistent inflation. Italy is the next Greece, so you should watch them closely (sub-1% GDP growth and a touch of deflation).

eugdpinf

As I have said before, the EU banks have never recovered from the global credit bubble of the 2000s.

banksomg

So, the EU remains on the economic rocks and their banks pose a threat to the global financial community. The credit bubble was Jutland 1 and now the stagnation of the EU economy is Jutland II.

When pundits begin yammering about how Brexit is causing Treasury yields and mortgage rates to decline, show them the nosedive in EU banking stocks and the EU’s economic stagnation that will result in continued Central Bank intervention. NOT necessarily the Brexit.

German Junker Ju-87 (Stuka) fighters in a dive-bombing run.

ju_87_Stuka_kl

 

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

Related Posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.