The star of "The Big Short" recommends shortening Deutsche Bank

The name Steve Eisman, a cash manager from Neuberger Berman Group, may not tell you anything, but you probably think of his character from the popular movie "The Big Short". This is the analyst, who predicted the financial collapse before the 2008 crisis.
And Eisman has a new offer to investors who wonder what company to shorten ... And it is - Deutsche Bank AG. The largest German bank, which is facing serious difficulties and is in a period of crisis, on its way to restructuring.
Deutsche Bank really has problems with its profitability, said Isman, in a special interview for Bloomberg Television, in Hong Kong. According to him, Deutsche Bank is a troubled bank. Eisman believes that its shares should be drastically reduced, the expert also said, adding that the low-capitalized bank would probably have to raise its capital next year.
Eisman also recommended short stakes against Canadian financial companies, confirming that he is still short with the Wells Fargo & Co. bank.
Earlier Eisman's bets against the mortgage market before the 2008 crisis were described in Michael Lewis's 2010 "The Big Short" book, based on the stories of cash managers who benefited from the financial crisis.
Eisman joined New York-based Neuberger Berman after he closed his Emrys Partners hedge fund in 2014.

The euro is under pressure because of the Deutsche Bank

Last week the focus of market participants was on Deutsche Bank (DE: DBKGn), the largest bank in Germany. Worries around the Institution triggered a wave of demand of risk-free assets, and is also reflected on the behavior of a single currency. EUR/USD on Friday registered 9-day low, jeopardizing the integrity of the 1.1150 zone.
Let me remind, that the US Department of Justice require form the German giant to pay $14 billion for the latest embezzlement. But that is not all. Hedge funds massively began to refuse services of Deutsche Bank for clearing. And it threatens a large-scale withdrawal of funds from the bank. And in June, the IMF warned of the risks posed by the institute. Since the beginning of the year the bank's shares fell more than 50%, but on Friday have fallen by whole 8%.

In the light of the circumstances, the talks, that Deutsche may repeat the fate of the infamous LehmanBrothers increase. Some market participants at this stage believe, that without timely support from the authorities, the bank is threatened with bankruptcy. Last week, the German government has denied the rumors about the imminent aid package to the bank. If in the near future the authorities do not soften their position and not serve markets a message of hope, the sale of the stock markets in Europe will continue, because the frightened customers will continue to actively withdraw funds from Deutsche.
Under unfavorable scenario, the euro could come under more pressure, and in the medium term, the tactics of sell EUR/USD on growth can affirm. While quotes continue to "cling" at the level of 1.12, the bearish momentum seems limited. In the case of testing and steady breakdown of the level 1.1150,the forecast for the pair will worsen.

Deutsche Bank: When poverty reduces, the dollar climbs

Forex strategists of Deutsche Bank remain among the most prominent bears in terms of EUR/USD, and support expectations for a rate of $0.95 at the end of the year with a new argument.

When poverty decreases, the dollar rises, emphasize analysts and point out, that the index of poverty (The misery index), which measures inflation and unemployment declined to nearly 60-year low in November.

At the same time, expectations are, that today's monthly government report on the labor market in the US reveal, that unemployment remained at 4.9 percent, in the eight-year lows.

"The misery index suggests optimism." - Commented director of currency analysis at Deutsche Bank Alan Ruskin. - "The more positive situation on the labor market in the US, the more likely the Fed to continue tightening monetary policy which would support demand for dollars."