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Is Deutchebank the German Lehman?
« on: September 25, 2015, 02:32:47 AM »


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Published on The Economic Collapse on September 21, 2015



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There Are Indications That A Major Financial Event In Germany Could Be Imminent



Is something about to happen in Germany that will shake the entire world?  According to disturbing new intel that I have received, a major financial event in Germany could be imminent.  Now when I say imminent, I do not mean to suggest that it will happen tomorrow.  But I do believe that we have entered a season of time when another “Lehman Brothers moment” may occur.  Most observers tend to regard Germany as the strong hub that is holding the rest of Europe together economically, but the truth is that serious trouble is brewing under the surface.  As I write this, the German DAX stock index is down close to 20 percent from the all-time high that was set back in April, and there are lots of signs of turmoil at Germany’s largest bank.  There are very few banks in the world that are more prestigious or more influential than Deutsche Bank, and it has been making headlines for all of the wrong reasons recently.



Just like we saw with Lehman Brothers, banks that are “too big to fail” don’t suddenly collapse overnight.  The truth is that there are always warning signs in advance if you look closely enough.



In early 2014, shares of Deutsche Bank were trading above 50 dollars a share.  Since that time, they have fallen by more than 40 percent, and they are now trading below 29 dollars a share.



It is common knowledge that the corporate culture at Deutsche Bank is deeply corrupt, and the bank has been exceedingly reckless in recent years.



If you are exceedingly reckless and you win all the time, that is okay.  Unfortunately for Deutsche Bank, they have increasingly been on the losing end of things.



Prior to the “sudden collapse” of Lehman Brothers on September 15th, 2008, there had been media reports of mass layoffs at the firm.  To give you just a couple of examples, CNBC reported on this on March 10th, 2008 and the New York Times reported on this on August 28th, 2008.



When big banks start getting into serious trouble, this is what they do.  They start getting rid of staff.  That is why the massive job cuts that Deutsche Bank just announced are so troubling




Deutsche Bank aims to cut roughly 23,000 jobs, or about one quarter of total staff, through layoffs mainly in technology activities and by spinning off its PostBank division, financial sources said on Monday.



That would bring the group’s workforce down to around 75,000 full-time positions under a reorganization being finalised by new Chief Executive John Cryan, who took control of Germany’s biggest bank in July with the promise to cut costs.



Cryan presented preliminary details of the plan to members of the supervisory board at the weekend. A spokesman for the bank declined comment.




Deutsche Bank has also been facing mounting legal troubles.  The following is a brief excerpt from a recent Zero Hedge article




The bank, which has paid out more than $9 billion over the past three years alone to settle legacy litigation, has become something of a poster child for corrupt corporate culture.



In April, Deutsche settled rate rigging charges with the DoJ for $2.5 billion (or about $25,474 per employee) and subsequently paid $55 million to the SEC (an agency that’s been run by former Deutsche Bank employees and their close associates for years) in connection with allegations it deliberately mismarked its crisis-era LSS book to the tune of at least $5 billion.



But it was out of the frying pan and into the fire so to speak, because early last month, the DoJ announced it would seek to extract a fresh round of MBS-related settlements from banks that knowingly packaged and sold shoddy CDOs in the lead up to the crisis. JP Morgan, Bank of America, and Citi settled MBS probes when the DoJ was operating under the incomparable (and we mean that in a derisive way) Eric Holder but now, emboldened by her pyrrhic victory over Wall Street’s FX manipulators, new Attorney General Loretta Lynch is set to go after Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC,UBS AG and Wells Fargo & Co.




Of course the legal troubles are just the tip of the iceberg of what has been going on over at Deutsche Bank over the past couple of years.  The following is a pretty good timeline of some of the major events that have hit Deutsche Bank since the beginning of last year.  It comes from a NotQuant article that was published back in June entitled “Is Deutsche Bank the next Lehman?“…




  • In April of 2014,  Deutsche Bank was forced to raise an additional 1.5 Billion of Tier 1 capital to support its capital structure.  Why?


  • 1 month later in May of 2014, the scramble for liquidity continued as DB announced the selling of 8 billion euros worth of stock – at up to a 30% discount.   Why again?  It was a move which raised eyebrows across the financial media.  The calm outward image of Deutsche Bank did not seem to reflect their rushed efforts to raise liquidity.  Something was decidedly rotten behind the curtain.


  • Fast forwarding to March of this year:   Deutsche Bank fails the banking industry’s “stress tests” and is given a stern warning to shore up it’s capital structure.


  • In April,  Deutsche Bank confirms its agreement to a joint settlement with the US and UK regarding the manipulation of LIBOR.   The bank is saddled with a massive $2.1 billion payment to the DOJ.  (Still, a small fraction of their winnings from the crime). 


  • In May,  one of Deutsche Bank’s CEOs, Anshu Jain is given an enormous amount of new authority by the board of directors.  We guess that this is a “crisis move”.  In times of crisis the power of the executive is often increased.


  • June 5:  Greece misses its payment to the IMF.   The risk of default across all of its debt is now considered acute.   This has massive implications for Deutsche Bank.


  • June 6/7:  (A Saturday/Sunday, and immediately following Greece’s missed payment to the IMF) Deutsche Bank’s two CEO’s announce their surprise departure from the company.  (Just one month after Jain is given his new expanded powers).   Anshu Jain will step down first at the end of June.  Jürgen Fitschen will step down next May.


  • June 9: S&P lowers the rating of Deutsche Bank to BBB+  Just three notches above “junk”.  (Incidentally,  BBB+ is even lower than Lehman’s downgrade – which preceded its collapse by just 3 months)



Are you starting to get the picture?  These are not signs of a healthy bank.



What makes things even worse is how recklessly Deutsche Bank has been behaving.  At one point, it was estimated that Deutsche Bank had a staggering 75 trillion dollars worth of exposure to derivatives.  Keep in mind that German GDP for an entire year is only about 4 trillion dollars.  So when Deutsche Bank finally collapses, there won’t be enough money in Europe (or anywhere else for that matter) to clean up the mess.  This is a perfect example of why I am constantly hammering on the danger of these “weapons of financial mass destruction”.



If Deutsche Bank were to totally collapse, it would be a financial disaster far worse than Lehman Brothers.  It would literally take down the entire European financial system and cause global financial panic on a scale that none of us have ever seen before.



On a personal note, I apologize for not posting anything last week.  I traveled to two very important conferences and was living out of a suitcase for about eight days.



There has been a bit of a lull in the action over the past couple of weeks, but I expect that to end very shortly.  I believe that the rest of 2015 is going to be incredibly chaotic, and we are going to see some things happen that most people could not even conceive of right now.



In the days that are directly ahead, I encourage people to keep a close eye on both Germany and Japan.



Big things are about to happen, and millions are about to be totally shaken out of their complacency.



Offline luciddreams

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Re: Is Deutchebank the German Lehman?
« Reply #1 on: September 27, 2015, 05:56:16 AM »
Definitely appears that the financial shit is about to hit the fan.  The top dogs are leaving the dog house just before it burns down and there is 75 trillion in derivatives exposure?  Wtf does that even mean?   

Offline g

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Re: Is Deutchebank the German Lehman?
« Reply #2 on: September 27, 2015, 06:26:10 AM »
Definitely appears that the financial shit is about to hit the fan.  The top dogs are leaving the dog house just before it burns down and there is 75 trillion in derivatives exposure?  Wtf does that even mean?

It's just another lesson in Fiat money Lucid, this is what always happens when you turn the dim loose in the schoolyard, without a Golden teacher to watch over the rowdies, and instill discipline when they get reckless, wild, and very stupid.   

Offline JoeP

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Re: Is Deutchebank the German Lehman?
« Reply #3 on: September 27, 2015, 07:00:41 AM »
On a sorta related note...the writer of this blog (Advancing Time) thinks the US dollar is about to "soar":

Dollar About To Soar

As he acknowledges in his article, the USD has risen roughly 20% in the last year...seems like it has already soared to me.    :icon_scratch:

USD_27Sep2015
USD_27Sep2015
just my straight shooting honest opinion

Offline Palloy

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Re: Is Deutchebank the German Lehman?
« Reply #4 on: September 27, 2015, 07:03:36 AM »
Quote
there is 75 trillion in derivatives exposure?  Wtf does that even mean?

The size of the exposure doesn't matter at all - most of the bets they are counterparty to cancel each other out anyway.  What matters is whether they have the cash on hand to pay out on their clients' winning bets when they fall due.  If they have to start selling securities to meet the cash flow, then the blood will be in the water and the sharks will start circling.

It would be interesting to see a chart of the cost of Credit Default Swaps on DB itself, and a few other banks for comparison.

As for what losing bets DB might have made, how about: writing cheap CDSs for Volkswagen - the world's biggest car maker, now suddenly in danger of having to do a full recall, and face a short-term ban on new sales, long-term multi-billion dollar fines.  I mean they can't possibly go broke ... can they?
The State is a body of armed men

Offline g

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Re: Is Deutchebank the German Lehman?
« Reply #5 on: September 27, 2015, 08:07:21 AM »
On a sorta related note...the writer of this blog (Advancing Time) thinks the US dollar is about to "soar":

Dollar About To Soar

As he acknowledges in his article, the USD has risen roughly 20% in the last year...seems like it has already soared to me.    :icon_scratch:

USD_27Sep2015
USD_27Sep2015

Just another tout with an opinion or talking his book, JoeP.

The dollar will go either up or down, that's for sure, but against what?

Keep in mind that recorded history teaches us that ALL fiat currencies go down against gold sooner or later.


Offline luciddreams

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Re: Is Deutchebank the German Lehman?
« Reply #6 on: September 27, 2015, 10:24:02 AM »
How long have you been back JoeP?  Didn't you get pissed off and leave?  Glad your back anyways.  I miss your news channel and we just lost Knarf's.  How bout reopening your news?

Offline JoeP

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Re: Is Deutchebank the German Lehman?
« Reply #7 on: September 27, 2015, 11:36:56 AM »
How long have you been back JoeP?  Didn't you get pissed off and leave?  Glad your back anyways.  I miss your news channel and we just lost Knarf's.  How bout reopening your news?

Hi LD,

Just got back to this forum with a post yesterday and one today. I don't think I got pissed off...I've been dealing with a couple of health issues.  I'd like to help out with the Newz, but between work and taking care of my ailments, there just isn't much time for news reporting. Thanks for asking.  I hope GO sees this post - he asked about me yesterday, and I wasn't able to reply in a timely fashion so I just skipped. I hope you (and family) and GO are all doing well.
just my straight shooting honest opinion

Offline MKing

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Re: Is Deutchebank the German Lehman?
« Reply #8 on: September 27, 2015, 11:55:08 AM »
Keep in mind that recorded history teaches us that ALL fiat currencies go down against gold sooner or later.

I imagine it does. Unfortunate that such a cycle operates across 200 human generations. So what do the other 199 generations do before the averages finally catch up with the 200th? Because within each cycle, they can do one helluva lot better living it up on fiat gains that can be translated into additional gold amounts across one cycle, or turn it into real estate gains or other real asset gains.

Are we the 200th generation GO, or somewhere between 1 and 199? Because you know as well as I that those of us who bought into gold fever and can't even get our money back out of it aren't figuring we have reached the 200th quite yet.
Sometimes one creates a dynamic impression by saying something, and sometimes one creates as significant an impression by remaining silent.
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Offline monsta666

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Re: Is Deutchebank the German Lehman?
« Reply #9 on: September 27, 2015, 12:41:55 PM »
Sorry to hear about your poor health. Hope things pick up in that area.

As for currency failures, I think they happen to all currencies even gold based ones. In the end if you have a significant amount of debt in any financial system there needs to be some sort of "reset" as at some point the debt obligations grow too large for the people to support. This reset traditionally happened through some form of debt jubilee. If such actions are not taken or the issues are not addressed then generally what follows is social unrest as a significant number of people fall into poverty or debt servitude. This happens regardless of what platform you use for money be it fiat or gold.

Offline Surly1

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Re: Is Deutchebank the German Lehman?
« Reply #10 on: September 27, 2015, 02:47:52 PM »
How long have you been back JoeP?  Didn't you get pissed off and leave?  Glad your back anyways.  I miss your news channel and we just lost Knarf's.  How bout reopening your news?

Hi LD,

Just got back to this forum with a post yesterday and one today. I don't think I got pissed off...I've been dealing with a couple of health issues.  I'd like to help out with the Newz, but between work and taking care of my ailments, there just isn't much time for news reporting. Thanks for asking.  I hope GO sees this post - he asked about me yesterday, and I wasn't able to reply in a timely fashion so I just skipped. I hope you (and family) and GO are all doing well.

Glad to hear from you JoeP, under any circumstances.
Hope whatever health issues you are dealing with are on the improve.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline Petty Tyrant

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Re: Is Deutchebank the German Lehman?
« Reply #11 on: September 27, 2015, 03:55:25 PM »
Hope You Get Well Joe.

Monsta, i wonder does a debt reset make the too expensive to drill oil worthwhile again,  grt the economy going.
ELEVATE YOUR GAME

Offline monsta666

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Re: Is Deutchebank the German Lehman?
« Reply #12 on: September 27, 2015, 04:39:39 PM »
Monsta, i wonder does a debt reset make the too expensive to drill oil worthwhile again,  grt the economy going.

A debt reset has to be treated as a default so the amount of drilling will be reduced as you can longer fund the thing through cheap borrowing. Also seeing as debt is money then a reduction of debt means less money so you get a deflationary environment. Overall it is likely to be bad for the economy but in the grand scheme, if taken to the extreme, a reduction in debt would hurt the richer segments of society more than poorer side. Inequality, at least in absolute terms would decline. The big problem with debt defaults is the contagion effect and what effect this would have on the global economy. If banks stop lending then you get the problem of goods not being delivered. That will cause chaos which is also not good for the economy.

Overall this is a Morton's fork scenario; on the one hand forcing people to pay debts will lead to social unrest yet debt forgiveness will cause the value of borrowing to decline (creditors are no longer sure they get a return in their investment) which will also cause chaos and even social unrest if taken to the extreme. Damned if you do and damned if you don't. The main point I wanted to get across in my earlier post is most monetary systems have the same flaw of debt and this is especially true for banking systems that follow the fractional reserve banking system. It doesn't matter if you use fiat or gold based currencies because at a fundamental level it is not the medium of exchange that is the issue here but the way the system is modelled on debt leverage.

We should also note that all money systems to my knowledge are tools to manage and distribute surpluses in society. They are not designed to manage and distribute increasing scarcity and/or declining resources. Again this issue would not be limited to fiat based currencies, it would also effect gold based currencies as well. In the end a significant segment of the economy would have to be managed without money but through other system of social obligations. In the past when the Roman empire's system failed people reverted to feudalism as each fief was an independent entity that could support itself and was not overly dependent on long distance trade to support itself. Perhaps something similar would develop in the future once the dust settles. It is that or something closer to a gift-type economy.

Offline g

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Re: Is Deutchebank the German Lehman?
« Reply #13 on: September 27, 2015, 05:44:04 PM »
Quote
  I hope GO sees this post - he asked about me yesterday, and I wasn't able to reply in a timely fashion so I just skipped. I hope you (and family) and GO are all doing well.

Got it JoeP, and glad you let me know you saw my reply to you.

Things are OK with me, but I'm very worried about the future. Sense financial troubles dead ahead and it always leads to worry, trouble, and fear about close family members well being and ability to cope. 

Never feel you have to reply to me JoeP if your busy or preoccupied, we are old friends who understand such things.

Glad your back, take it slow, and get that back problem cured as best you can. See you around the forum.     GO

Offline JoeP

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Re: Is Deutchebank the German Lehman?
« Reply #14 on: September 28, 2015, 03:54:56 AM »
Thank you for wishing me well folks (GO, Monsta, Surly, Bob).  We certainly have some interesting characters on this forum that always try to keep discussions lively.  :laugh:
just my straight shooting honest opinion

 

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