by kleinbl00

The current rout – one in a long series – was triggered because Chancellor Angela Merkel, the ultimate political animal fretting about the general elections in the fall of 2017, let voters and taxpayers know what they wanted to hear. But investors were not amused.

On Friday, Focus Magazin reported that Merkel wouldn’t meddle in the legal disputes between Deutsche Bank and the US Department of Justice over the $14 billion fine related to the scandal surrounding residential mortgage-backed securities. This is what Merkel had “signaled” to CEO John Cryan in a “confidential meeting” this summer.

Citing “government circles,” Focus reported that CEO John Cryan had “suggested” in that conversation that diplomatic mediation by the German government would be helpful for Deutsche Bank. According to these sources, Merkel also “categorically” excluded the possibility of state aid in election year 2017.

Surely, the Chancellor did not ask for this “confidential meeting.” More likely, a desperate Cryon asked for it. But there’s no official statement about it. Instead, there’s a purposeful leak piped to voters by the ultimate politician trying to get re-elected. Another bailout of bank bondholders and stockholders just isn’t very popular at the moment.

mk

Worth noting:

1) Deutsche Bank has 2 euros per share to go before they drop below the revenue necessary to pay their US fines

2) DB has dropped 2 euros in the past week

3) There's a number, nobody's sure where it is, where DB's CoCos blow up. It's probably not far from that 9 euro mark.

4) DB's balance sheet is 58% the size of the GDP of Germany.