morbius glass

Reviews – Comics, DVD’s, Books. Finance – FX markets, Stocks, Economics. Culture

German Bank troubles, Credit crunch still on. Profit losses and writdowns in coming quarters

Posted by Adrian on May 7, 2008

Just don’t believe that the credit crunch is a passing phase, apart from the fact the ‘crunch’ effected primary a banking industry, which in turn effected it’s financing capabilities. The point is the real economy, the street economy will feel the after effects of a contracting and shaky banking system – even if it does stabilize. This after shock hasn’t been felt just yet, as the credit markets are still unwinding, and write downs will continue.

As mentioned in Is gold correcting (update 4). A German bank could be in trouble connected to the subprime mess, from bloomberg 7th May 2008

Commerzbank wrote down the value of investments including subprime-related securities by 244 million euros, bringing total losses from the credit crunch to 827 million euros. Larger rival Deutsche Bank AG last week reported its first quarterly loss in five years after 2.7 billion euros in writedowns. Germany’s biggest private and state-owned banks have announced more than 33 billion euros in markdowns since July.

“The decline in profit and further writedowns were inevitable because March was the worst month of the financial crisis so far,” Manfred Jacob, a Frankfurt-based analyst at SEB AG”

This could also indicate that there is still ‘junk’ in other European banks, namely German, Swiss (UBS) and UK banks. Effecting both Euribor and Libor rates, so the calm (that was misleading saying ‘the worst is over’) by the Bank of England and their horrible government in the UK should be overlooked. Expect some more writedowns and possible a bank officially going under. Which may be a mortgage bank in the States.


One Response to “German Bank troubles, Credit crunch still on. Profit losses and writdowns in coming quarters”

  1. […] Europe especially the German banking sector which has connected closely to wall Street, refer to German Bank troubles, Credit crunch still on. Profit losses and writedowns in coming quarters. China could be a lucking problem, depending on Chinese desire to sell treasuries and US dollars; […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: