6 ms·

Deutsche gonna Deutsche. Recruitment tables should just have a banner that reads 'we've already spent your bonus on legal fees, here's some chocolate'

JumpCrisscross 7mo ago
I'm re-running some of the Fed's stress tests and, somehow, still find myself flabbergasted that DB is at the top of my risk list. Despite only having $12bn of exposure, if they see a 60% loss on that risk alone (assuming 60% recovery and 1.5x leverage), they breach their 4.5% capital requirement. That's the lowest threshold I'm finding across all of the banks the Fed stress tests. Now 50% loss means wipe out. But given the size of the portfolio, there is also the concentration risk. A single private-credit firm going bust shouldn't take out a bank. But that seems–seems!–to be what I'm seeing.
- wizardforhire 7mo ago
  As long as nobody knows then it isn’t risk… /s
  - r_lee 7mo ago
    don't worry, they're adopting AI
    - reactordev 7mo ago
      Oh god help us… Last thing we need is a Deutsche bot.
- Aboutplants 7mo ago
  Time to short them?
  - pocksuppet 7mo ago
    It's never the time to short a company, even a really bad one. You have only 100% upside, infinite downside, and you have to time it perfectly. A short can be a part of a combination strategy where you go long on one company and short on a related one, but you still have to be really careful. If DB stock increases 50% before it crashes, would you be forced to sell at the top and lose all your money?
    - elliotec 7mo ago
      > never the time to short a company > can be part of a combination strategy
      - pocksuppet 7mo ago
        Never hold a net short position. You may hold a short position as part of a net neutral or net long position with extreme caution.
        eru 7mo ago
        What you are saying suggests that there's a single number (that can be positive or negative) that characterises your net short or long position. That's silly. You can build pretty much any kind of shareprice-to-payoff function with enough options and other instruments. And that's one dimension (a line) more than just a single number. You can get arbitrarily more complicated, if you want to.
    - georgeecollins 7mo ago
      This is sensible advice for most people. I see some thoughtful quibbles but I wish you weren't down voted. If you are a normal retail investor, please listen to pocksuppet.
      - klodolph 7mo ago
        pocksuppet’s advice is I think more of a reaction to a specific way that you could take a short position, and in 2026 I think you want to assume that people who know what “short” means, also know what options are. The advice is good in a kind of stopped clock sense.
  - StanislavPetrov 7mo ago
    If you think they are going belly up this year it is far cheaper and safer to buy a put. You risk losing the money you spend for it up front but your losses are capped. Right now the 25 strike for a DB Jan 15 2027 put is 2.50/2.85 bid/ask. DB is sitting at $29.44 as of yesterday's close. That's $285 bucks up front that gets into the money if DB falls beneath 22.15 by Jan 15th 2027. But if it moves down sharply in the near future you could just turn around and sell that put for a profit long before expiration. This is not financial advice, it is gambling advice.
behehebd 7mo ago
Is that a Deutsche bag they are holding?
Bluebirt 7mo ago
Whenever a Bank is sued, you can be certain a guy from Deutsche is somehow involved.

JumpCrisscross 7mo ago

I'm re-running some of the Fed's stress tests and, somehow, still find myself flabbergasted that DB is at the top of my risk list. Despite only having $12bn of exposure, if they see a 60% loss on that risk alone (assuming 60% recovery and 1.5x leverage), they breach their 4.5% capital requirement. That's the lowest threshold I'm finding across all of the banks the Fed stress tests. Now 50% loss means wipe out. But given the size of the portfolio, there is also the concentration risk. A single private-credit firm going bust shouldn't take out a bank. But that seems–seems!–to be what I'm seeing.

wizardforhire 7mo ago
As long as nobody knows then it isn’t risk… /s
- r_lee 7mo ago
  don't worry, they're adopting AI
  - reactordev 7mo ago
    Oh god help us… Last thing we need is a Deutsche bot.
Aboutplants 7mo ago
Time to short them?
- pocksuppet 7mo ago
  It's never the time to short a company, even a really bad one. You have only 100% upside, infinite downside, and you have to time it perfectly. A short can be a part of a combination strategy where you go long on one company and short on a related one, but you still have to be really careful. If DB stock increases 50% before it crashes, would you be forced to sell at the top and lose all your money?
  - elliotec 7mo ago
    > never the time to short a company > can be part of a combination strategy
    - pocksuppet 7mo ago
      Never hold a net short position. You may hold a short position as part of a net neutral or net long position with extreme caution.
      - eru 7mo ago
        What you are saying suggests that there's a single number (that can be positive or negative) that characterises your net short or long position. That's silly. You can build pretty much any kind of shareprice-to-payoff function with enough options and other instruments. And that's one dimension (a line) more than just a single number. You can get arbitrarily more complicated, if you want to.
  - georgeecollins 7mo ago
    This is sensible advice for most people. I see some thoughtful quibbles but I wish you weren't down voted. If you are a normal retail investor, please listen to pocksuppet.
    - klodolph 7mo ago
      pocksuppet’s advice is I think more of a reaction to a specific way that you could take a short position, and in 2026 I think you want to assume that people who know what “short” means, also know what options are. The advice is good in a kind of stopped clock sense.
- StanislavPetrov 7mo ago
  If you think they are going belly up this year it is far cheaper and safer to buy a put. You risk losing the money you spend for it up front but your losses are capped. Right now the 25 strike for a DB Jan 15 2027 put is 2.50/2.85 bid/ask. DB is sitting at $29.44 as of yesterday's close. That's $285 bucks up front that gets into the money if DB falls beneath 22.15 by Jan 15th 2027. But if it moves down sharply in the near future you could just turn around and sell that put for a profit long before expiration. This is not financial advice, it is gambling advice.

behehebd 7mo ago

Is that a Deutsche bag they are holding?

Bluebirt 7mo ago

Whenever a Bank is sued, you can be certain a guy from Deutsche is somehow involved.