It smells like death.
No way to know for sure when the Bundesbank, Fed and ECB lose control of Deutsche Bank’s balance sheet. But its stock price just hit an all-time low since its NYSE-listing in October 2001.
Anyone who owns the Deutsche Bank “Tier 1” bonds should sell them now. They are currently yielding about 8%, which puts on the same “tier” as U.S. triple-C (CCC/Caa) rated credits.
I’ve been wondering for quite some time if DB’s demise would be the 2016 “Lehman” event, but I don’t think it will be. Why? Because Germany has a fabled history in which it has demonstrated a willingness to print trillions to keep its system from collapsing.