With Stock Markets around the world taking a knock recently it is no wonder investors are in a panic. Especially when one of the worlds largest banks has had its share price more than half since January. Of course I am talking about Deutsche Bank; the same bank that Donald Trump uses to keep his money ‘safe’.
The share price of Deutsche Bank is now lower than it’s price during the 2008 financial price and doesn’t look like slowing down anytime soon.
Chairman of Deutsche – Paul Achleitner said recently in an interview with Frankfurter Allgemeine Sonntagszeitung, that Deutshe Bank AG is well positioned to weather a recession without state help. He has been forced to say something like this in order to keep investor confidence, however it has had the opposite effect and makes investors very nervous.
We are seeing this same trend of false confidence around the world. on the 17th December, Treasury Secretary Mnuchin spoke with many major banks CEO’s to discuss the volatility in the market. He wanted to assure these banks that everything was fine and there was nothing to worry about… Again, this has the complete opposite effect and stock prices continued to fall. The S&P 500 saw it’s worst December since the great depression. The markets are now rallying due to Pension funds pumping money into the system, but how long can this continue. It won’t be long before there is a correction and the market begins to slide again.
Secretary Mnuchin said “We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business” This has been due to low interest rates and lots of cheap money being printed. Far too much money has been borrowed and now the higher rates mean that many people can’t afford to pay it back. This could be the start of a much bigger financial crisis than we saw in 2008.