Germany is down some 5%ish.
I am not sure why Germany is being so impacted, over and above, other countries. It could be the market forecasting (a) a big slowdown in manufacturing/exports which has been Germany's lifeblood or (b) it could be forecasting a huge bill coming to Germany to pay for countless other countries largesse or (c) it could simlpy be that Germany has not instituted short selling bans and hence this is the proxy to short Europe at large.
France is down 4.4%, and Britain 3.4%.
CEO Joseph Ackermann of German giant Deutsche Bank did not help things by actually admitting the truth at a conference today - cmon man, don't you know the game plan, deny deny deny!
- Europe's sovereign debt crisis will stunt bank profits for years and could kill off the weakest, Deutsche Bank Chief Executive Josef Ackermann warned industry bosses on Monday amid intense scrutiny of the sector's finances. "Prospects for the financial sector overall are rather limited," the CEO of Germany's top bank said. "The outlook for the future growth of revenues is limited by both the current situation and structurally."
- Shares in the banks that hold much of that debt dropped on Monday towards the two-year lows they reached in August.
- Despite his gloomy outlook for profits, Ackermann rejected calls for urgent recapitalization. A forcible recapitalisation would "threaten to send the signal that politics has lost faith in the ability of existing measures to succeed," said the boss of Germany's biggest lender.
- Ackermann also warned that many European banks could go under if they had to accept the "haircut" on their sovereign debt holdings that has been proposed in some quarters."It's stating the obvious that many European banks would not survive having to revalue sovereign debt held on the banking book at market levels," he said.
Translation - if European banks had to admit the true worth of what is on their balance sheet, many would be done. Hence, let's stick to fantasy.
That thinking worked wonders in the USA in April 2009, when FASB (the U.S. accounting rules board) changed to "mark to myth" accounting and we all clapped hands and said no more problems!