While the share of US financial institutions are under pressure, on the other side of the pond selling in European banks has accelerated since yesterday.
One analyst noted that HSBC may need as much as $30b new capital infusion. Put activity in HSBC for March and out is extremely high. Some are even calling HSBC the next Bear Sterns. As you can see, HSBC stock is at a very critical support. Triple-bottoms usually fail.
Apparently there have been rumors of heavy trading losses at Deutshe Bank for two weeks. This just out today (Via FT Alphaville):
Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB) today announced, on a preliminary and unaudited basis, key elements of its fourth quarter 2008 financial performance:
* Fourth-quarter loss: The bank currently anticipates a loss after taxes in the region of EUR 4.8 billion for the fourth quarter 2008. This development reflects exceptional market conditions, which severely impacted results in the sales and trading businesses, most notably in Credit Trading including its proprietary trading business, Equity Derivatives and Equities Proprietary Trading.
Also from Financial Times:
According to analysts at RBS, Deutsche Bank’s core tier 1 ratio, a measure of the strength of its capital base, now stands at 5.6 per cent. This, say RBS, raises serious questions about the bank’s need to raise further capital, possibly through staging a rights issue, at a time when the state of the capital markets is particularly challenging.
RBS said: “We see 8.5 per cent [for core tier 1] as an appropriate capital target level, and equity issuance as an inevitability. German government involvement cannot be ruled out.” The note also reiterated a “sell” rating on Deutsche Bank shares.
Today Deutsche Bank is dragging DAX down and DAX is dragging the rest of Europe Down. DB is trading at around $28.5, breaching a key support at 30.
Now, if only the Europeans know that on Nov 20, we have a new President being sworn in, all this selling would have stopped. Right? Anyway, I expect bank shares in US to be under a lot of pressure today.
Mohan, how about starting up the Intraday post for us.
All you have to do is start right here.
“if only the Europeans know that on Nov 20, we have a new President being sworn in”
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Oh believe me, they KNOW. Most educated Europeans probably know more about not just Obama, but both Clintons, McCain, and most US politicians who might have become Prez than most educated Americans do. Sometimet a newsstand than handles foreign magazines, pick up a copy of Der Spiegel and compare its size and weight to US News, Time, and Newsweek ALL TOGETHER. Find a report about some American political topic, and notice how many more long, complicated German sentences and words it contains (with fewer and smaller pictures), than an American magazine devotes. The reporters often have PhDs in their field of specialization, also on big-city newspapers. “Der Aktionär” (the stockholder) is loaded with charts with indicators, MA’s, and lots of other stuff that would make the eyes of CNBC’s anchors glaze over, to say nothing of most watchers. In Germany, Cramer and other talking heads who pump stocks would have comparative scorecards. When he pumped FSLR at $3xx and it was soon selling for $1xx, that would have been duly noted and reported (but they still print his ads for books — JEEZ! When I think about Cramer translated into German! AchDuLieberHimmelDonnerWetterKruzifixNochamal!).
Grrr… That was a tongue-in-cheek, Uner! But thanks for the rant!
Whenever I travel via Europe, I pick all the European rags from the plane and read them on the plane or when I reach my destination. I am especially interested in their ads and culture than stocks