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European shares turn green after gapping lower at the open on overnight news the Dexia rescue is...

European shares turn green after gapping lower at the open on overnight news the Dexia rescue is falling apart. Shares also took a hit from a failed German bond auction. Unlike the U.S., Europe requires real-money buyers at debt sales - the weak auction likely has more to do with low German rates than with any worries about Germany's credit. Stoxx 50 +0.2%.
Comments (2)
  • jonchait50
    , contributor
    Comments (18) | Send Message
     
    German credit is pristine; auction results may result from fears of decline in Euro itself. Buyers might not want to be long €
    23 Nov 2011, 08:52 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Germany's credit is only pristine as far as S&P are concerned, and will not drop Germany's rating for fear the contagion will begin.

     

    NEWSFLASH: The contagion is entering it's third (3rd) trimester.

     

    Fitch & Moody's both should have dropped their (Germany's) AAA rating,and in as long as you & I have been in this industry, we both know they do not have AAA credit.

     

    Their last two (2) retail banks, Commerzbank and Deutsche Bank, are at a "Bank Financial Strength" of "C-" and "C+" respectively.

     

    Now when the only retail banks you have left, are both teetering on insolvency, and both have been placed on the EU emergency list for needing to raise Tier1 Capital, something stinks, and that stink should be reflected in Germany's credit rating, just like it was for France, Italy, and the US.

     

    Germany is not immune here, and as the EU's leading debtor with 2011 Q3 Government Debt of 2.088 Trillion Euros, (higher than Italy at a mere 1.868 Trillion Euros), they are clearly the trigger for the whole of Europe, and cannot service that debt, full stop. Nobody wants to address this, and the German Delegation pack up their cases and leave the room as soon as I start in on them again.

     

    The reason I chose to single out Deutsche Bank, is we keep hearing how the financial crisis, "has had little to no effect on Germany's powerhouse economy". We both know that is complete bullsh*t, and I will continue to bring it up at every single policy meeting I attend.

     

    If Deutsche Bank is doing as badly as they are, and that's the biggest and strongest that Germany has to offer, then it's definitely the harbinger for a brutal winter, and January's usual credit crunch will show Germany, "no quarter".

     

    Deutsche Bank:

     

    Category: (Moody's Rating)
    Outlook: Stable
    Bank Deposits: Aa3/P-1
    Bank Financial Strength: C+
    Baseline Credit Assessment: A2
    Adjusted Baseline Credit Assessment: A2
    Issuer Rating: Aa3
    Senior Unsecured: Aa3
    Subordinate: A3
    Commercial Paper -Dom Curr: P-1
    Other Short Term -Dom Curr: (P)P-1

     

    Outlook Rating(s) Under
    Review
    Senior Unsecured MTN: *(http://bit.ly/vSvJ2b
    Subordinate MTN: *(http://bit.ly/ug5cUV
    Commercial Paper: P-1
    Other Short Term: (http://bit.ly/soEPyv

     

    Outlook Rating(s) Under
    Review
    Bank Deposits **Aa3/P-1
    Bank Financial Strength **C
    Issuer Rating **Aa3
    21 Dec 2011, 09:18 AM Reply Like
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