BILLIONAIRE investor George Soros took out a staggering €100MILLION bet that a major German bank would collapse after Britain’s decision to cut ties with the crumbling EU.
At one point, shares were down by more than 13 per cent compared with Friday’s high point.
By early on Tuesday afternoon, they were down by 7.9 per cent from that level. Marshall Wace, a British hedge fund, also took a big bet against Deutsche Bank. Banks across Europe have been left battered by Britain’s decision to turn its back on Brussels in a historic referendum on June 23, but Deutsche Bank is especially troubled.
The bank, which is undergoing a deep restructuring, has been hamstrung by the fallout from the financial crisis, posting a record loss of €6.8billion in 2015.
Around a year ago, John Cryan took over as the bank’s new CEO, with a clear mandate to slah jobs and costs.
Since then the bank’s share price has dropped by nearly 60 per cent, making it one of the lowest-valued international banks.
It comes after Mr Soros who banked profits of $1bn by famously positioning himself against sterling 22 years ago, said a British exodus from the bloc would make the eventual dissolution of the EU “practically irreversible”.
The veteran investor, 85, said that Brexit was the final nail in the coffin for the EU.
Mr Soros made around £690m after his infamous bet that sterling was overvalued against the Deutsche Mark, which forced former Prime Minister John Major to pull the pound out of the European Exchange Rate Mechanism (ERM).
COMMENTARY (Not news, just our Opinion)
Under new European Union Law, Depositors with money in Deutsch Bank will be exposed to a “Bail-In” if the bank fails; that means their deposits will be used to pay the bank’s debts! Anyone with money in Deutsch Bank would do well to consider that, and decide if keeping their money there is a smart move.
Of course, we are NOT licensed financial experts and cannot give financial advice. Before you do anything with your financial situation, you should speak with a licensed financial expert.
Having said that, this is not rocket science. Billionaires like Soros don’t make 100 Million bets to so they can lose. Soros has a proven track record of knowing when banks are on the rocks – he proved it by literally breaking the Bank of England. THe fact he is now hedging for a failure of Deutsch Bank likely means he knows the end is nigh for them. Some people might take that to mean get their money out and run for the hills right now!
Deutsch Bank is sitting on about $75 TRILLION in Derivative contracts. If Deutsch Bank goes down, the entire global financial system will go with it. Nothing would be able to stop it.
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