Deutshe Bank Tourniquet -- Dilution Blow Out -- Earnings Bust
No Profit NIRP Environment
Negative Interest Rate Policy NIRP is destroying Europe and Japan's Banks. Banks can not lend in a slow-no growth world. Central Banks are forcing EU-Japan banks to lend out bad loans, make risky investments, or slowly eat negative interest rates. Right now they are choosing to use a tourniquet (end of NIRP) until they can once again invest in bonds for yield advantages.
DB Dilution
Deutshe Bank has also recently added 175% more shares since last year. Price has not fully discounted the share dilution. Fully Diluted DB should be trading around $11 to $10.
Bank of Japan Federal Reserve June 14-15 ECB July 21
Events could be positive or negative. If US Fed decides to further increase interest rates this could be very bad for EU and Japan Banks. BOJ decreases rates further this can be bad for EU and Japan Banks. However, if both BOJ and Fed keep, rates in check, this would be short term positive for EU and Japan Banks. Next major Central Bank event is ECB July 21, more than likely ECB will spike the punch bowl and go further negative. ECB NIRP is bad for banks worldwide.
July 28th Earnings
I expect this to be the kill date. There is no way DB has improved since second quarter last year, 2015, comparably we will see a large drop in revenue, earnings. However, one fundamental improvement, debt-to-equity, due to massive dilution at the shareholders expense. Investors will see quickly the only way out of a rabbit hole for DB, is further dilution.
Exit Promptly
SUB 10 Price Per Share pps
Technical Analysis
Long Term Bear Flag / Negative Trend
Target 12 to 11
Note: take TA w/ grain of salt. Bear Flags have never proven greater than 50/50 regarding directional outcome.
However, sentiment, monetary policy and fundamentals, support a thesis for price falling further.
"We can therefore conclude that pre-requisites for the next default cycle are now in place."
www.zerohedge.com/print/528493