No confirmation on this yet but I was watching for the DB stock to drop below 10 Euros and it looks like it bottomed out today at 9.90 Euros before heading back up. Remember, we are at the end of the 3rd quarter and Deutsche Bank needed Tier 1 Capital desperately.
If their COCO Bonds automatically converted to Common Shares when the stock price breached 10 Euro then they may have added up to 5B Euros in new equity to their balance sheet while wiping out the 100% of the COCO bond holders.
I haven’t heard anything yet but it’s a long 3 day weekend in Germany for the banks and anything can happen.
As predicted… the US Justice Department has NOT confirmed the settlement rumor of $5.4B and word coming out now is that DB would be required to report this number if it were true…and they have NOT said a WORD!
Who would have guessed the Twitter rumor was just a head fake?! HA!!
And S&P still has a downgrade pending for Deutsche Bank and they won’t embarrass themselves again as they did in 2008.
Man can it get ugly fast if ANY of these items come to pass.
May the Road you choose be the Right Road.
Note: The failure of Deutsche Bank would be the largest of the Too-Big-To-Fail banks and would destroy everything electronic in a matter of days. For this reason many people are saying that the German/US Governments and Central Banks would not allow that to happen. I think the exact opposite: They are FORCING it to happen!!