Friday, September 30, 2016


Deutsche Bank will be bailed out if necessary.  There was some scaremongering among the fast money crowd due to some hedge funds pulling money out of Deutsche Bank but that doesn't mean anything.  There is no way that Germany will let Deutsche Bank go down.  Even before it gets to that situation, you know the ECB will come up some kind of rescue plan because of the potential systemic risks of letting a bank with a gigantic derivatives book go bankrupt.  That doesn't mean that Deutsche Bank is a good stock to buy, because if there is a bailout, the shareholders will be diluted massively.

The market is alread starting to shrug off the Deutsche Bank fears and DB is actually up in premarket, as the fears are way overblown.  A Department of Justice fine is not going to take down a bank, as it will be settled down to a level that will be painful for DB but not put in under.

The market has been chopping back and forth as good and bad news hits the tape.  We had the OPEC production cut pre-deal on Wednesday, and then DB on Thursday.  It is perfectly symbolic of this tape.  A tape that is in a hurry to go nowhere, chopping back and forth.  Expect more of this type of action for the next couple of weeks, as October tends to bring out the fear mongers.


MM111 said...

Now up again. Bias does still seem to be up.

Market Owl said...

Yeah, just like 2015, choppy, but with a slight upward bias till the crap hits the fan. That won't be for a while.