Last Friday, the US Labor Department released the job numbers, and – big shocker – the American economy added fewer jobs than what everybody was expecting. Whereas most economists were expecting the country’s labor market to create 205,000 new jobs (which would have been a welcome boost), April’s job numbers saw an increase of just 160,000 jobs, or approximately 20% lower compared to the estimates.
Someone seems to have hit the emergency button at the Fed, as even though the central bank said that everything was just fine with the American economy just a few weeks and months ago, the situation has currently escalated into a full-blown panic mode.
In our column last week we were warning you about Deutsche Bank’s problems and potential issues with its derivatives portfolio and its capital structure. The story continued to unfold in the past week and Deutsche Bank was pushed into a corner as more and more investors started to lose confidence in the bank. A plan to buy back $5.4B in debt in a desperate move to reassure the capital markets. In fact, Deutsche’s move is so desperate it will even start buying back debt that was issued less than six weeks ago.