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A note on Deutsche Bank

Deutsche Bank, one of Europe’s behemoths, is in very deep trouble having lost 90% 0f its share price value since 2007, has been falling sharply all this last year (48% loss this year) and, with its $42 Trillion in Derivatives exposure was singled out by the IMF, as the bank which ,

“appears to be the most important net contributor to systemic risks…”

Of course Deutsche agues the standard ‘derivatives-aren’t-a-problem’ line, that this 42 trillion all nets out and their real exposure is a fraction of that vast figure. Which is fine as long as you think that in the event of Deutsche coming unstuck, 42 trillions-worth of derivatives contracts can be held in abeyance for the time it would take for all those contracts to be netted out.  As I’ve said before netting out is akin to getting a rowing boat full of people to all change places  without the boat overturning.

And now Deutsche has been threatened by the US DoJ with a $14 billion fine for its crimes for selling knowingly over-valued RMBS (Residential Mortgage Backed Securities) in the build up to the financial crash of 2007.

Deutsche cannot pay $14 billion without raising a great deal of cash. Deutsche has put aside $5.5 billion for paying fines. A mere 9 billion short. So could Deutsche go down? Financially yes it could. But politically, I doubt it. And it’s the tension between these two answers, between the parlous financial state and the huge political significance of Deutsche, that I find interesting.

Deutsche is Germany’s only G-SIB (Global Systemically Important Bank).   Deutsche is Germany’s financial flag carrier. It stands at the centre of Germany’s long held desire to have Frankfurt eclipse London as Europe’s financial centre. Although Germany also has Allianz as a G-SII (Global systemically Important Insurer), without Deutsche Bank Germany ceases to be a globally significant financial nation (G-SFN – OK I made that one up). Without Deutsche Germany would not sit at the top table of global finance. France would. France has three G-SIBs. The balance between France and Germany within Europe would shift. Maintaining that balance between France and Germany, at the heart of Europe, has been critical in European affairs since WWI.

Could Germany ever allow Deutsche Bank to go under?

Officially the global framework for G-SIFI resolution in bankruptcy has been laid down by the FSB and agreed by all. And interestingly, though they are touted as the result of new thinking since the financial crisis, they are not. I recently received an EU document marked ‘Secret’, entitled  “Overview of Financial Stability Resolution Issues” and dated Feb 2008 which describes pretty much what the FSB has now settled upon now. I mention this because almost every word in it was completely ignored once the crisis hit and each country viewed the imminent demise of their major, flag-carrying banks. Which leads me to wonder why I should believe it would be any different next time? I think this question is particularly critical to Germany because Deutsche is its only G-SIB. In the next massive implosion of debts, France could afford to let one of its G-SIBs go down and still have two seats at the top table. England could do the same.

How will G_SIBs  be wound down?

The not-so-new rules for how a G-SIB should be wound down begin by stating that,

Resolution should be initiated when a firm is no longer viable or likely to be no longer viable, and has no reasonable prospect of becoming so.

But no one has wanted to state exactly what the trigger is, for deciding that a bank is no longer viable. Except to say the global regulators will leave it to national regulatory authorities to decide. So Germany will decide when Deutsche is no longer viable. Sure, that’ll be grand.

Should an authority take the fatal stop of admitting one of their G-SIBs is no longer viable then things are supposed to move with wonderful efficiency. Resolution of netting out is to be speedily concluded (in as little as two days!) No sniggering please. And then as the gruesome business of sorting the living from the dead parts of the bank gets going  the authorities must definitely NOT rely

…on public solvency support and not create an expectation that such support will be available;

Instead the dead parts will inflict losses first on share holders and then on bond holders in the time honoured order of unsecured first. And then those parts which are not completely dead and might be cut away to live again in a different body, are to be sold off by means of sale or merger.

  1. As a last resort and for the overarching purpose of maintaining financial stability, some countries may decide to have a power to place the firm under temporary public ownership and control in order to continue critical operations, while seeking to arrange a permanent solution such as a sale or merger with a commercial private sector purchaser.

So public bail outs are supposed to be strictly temporary. No holding 80% of RBS for most of a decade. Really? But that’s not the point which is important for Deutsche Bank. The important point is that in any sale of the viable parts of Germany’s only G-SIB, the brutal fact of the matter is that there is no other German financial institution that could afford to buy any of it. Commerzbank? Allianz? Letting an insurer buy a bank? So imagine the situation for Germany. They lose their seat at the top table and then they watch as France, England, American or perhaps China buy the crown of German financial might.

So I don’t think it will ever happen.  Or at least it will only happen when Germany is truly out of any other options.

So if Deutsche is not going to be declared “no longer viable” what are the alternatives?

One option is the UniCredit route. UniCredit was a trillion euro bank. It was Italy’s flag carrier. It had bought Bavaria’s banks and some of Austria’s as well. And yet it’s share price was always   paltry.  Just 7.6 Euros at the market top in May ’07.  And since then it has been a hollow and enfeebled giant. Lumbering and ineffectual. It has been the laughing stock of European banks. But Italy doesn’t seem to mind. They seem content to let UniCredit be the quintessential Zombie bank. Would Germany be as sanguine to leave Deutsche to go the same way?  This would, I suggest, be almost  as injurious to German pride and industrial policy as letting Deutsche go down completely.

But if Germany decided it could not face the financial consequences of obeying the letter of the resolution law nor leave the bank to be a bloated and useless zombie then the alternatives  bring in their train even greater political upheavals.  Imagine the German government decides that not bailing out Deutsche just inflicts too much damage on Germany – potentially reducing Germany from the front rank of globally significant nations to  something lesser. It becomes a matter of national pride if not of survival.

So Germany ignores all the FSB rules and regulations and bails Deutsche bringing it into government ownership/protection –  call it what you like. In so doing it demolishes the entirety of European policy regarding bail outs, government debts and austerity. Where then all the German insistence on fiscal discipline it has forced upon Greece, Ireland, Portugal, Spain and Italy? The Bundesbank, Berlin and the ECB would have no authority at all. Every country would have a green light to do the same for their flag carriers.

It would be the end the European experiment. Or the European system would have to try to continue without Germany. And that could only happen if all debts to Germany were repudiated.

I realise all this is speculation. But Deutsche has lost 90% of its value. Only RBS has lost more.  Deutsche has 7000 legal cases against it. Frau Merkel is losing her grip, Brexit rocked the complacent rulers of Euroland and  Madame Marine Le Pen would like to push France to do the same.

And on top of it all NOTHING has been fixed financially at all. There is more debt more leverage, more and more liquidity achieving less and less, interest rates are negative, pensions  are going nowhere, insurers are grasping for risk even as they fear what it will do to them when the next crisis hits and governments are all, every one of them, preparing their armed forces for widespread civil unrest.

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75 Responses to A note on Deutsche Bank

  1. Sackerson September 20, 2016 at 9:29 am #

    Interesting as ever.

    Do you have a reference for your last comment on all armed forces preparing for civil unrest?

    Thanks!

    • Golem XIV September 20, 2016 at 9:00 pm #

      No I’m afraid I don’t. I have read various articles concerning US preparations. But most of the rest is from personal conversations with friends in various countries. Most recently here in the UK. A high ranking officer said he had been training troops specifically for civil unrest and said he expected the army to become involved on a regular basis. I had no reason to doubt what he said.

      • JayD September 21, 2016 at 7:51 am #

        There have been several references on Zerohedge to the German government advising citizens to hold emergency food provisions etc…

  2. Jesse September 20, 2016 at 5:08 pm #

    Good to hear from you again. Thank you for taking the time.

    I have used your last paragraph as a quote for the day.

    Did you intend to use ‘immanent’ rather than ‘imminent’ in the seventh paragraph above?

    • Golem XIV September 20, 2016 at 7:12 pm #

      Ooops. Thanks jesse

      • Jesse September 20, 2016 at 8:47 pm #

        Immanent worked in an existentially clever way. LOL

  3. richie rich September 20, 2016 at 7:11 pm #

    The US needs/wants Germany’s token cooperation when dealing with Russia.

    the US went soft on VW, HSBC, the US discreetly will find an agreeable option with DB post-US election.

    • richie rich September 20, 2016 at 7:15 pm #

      PS, hope to see a new documentary from you soon.

      • Golem XIV September 20, 2016 at 9:02 pm #

        Thanks Richie rich. As it happens I just completed a four part series which I hope will soon be available on Curiosity Stream. I’ll let you know ands thanks for asking.

        • Richie Rich September 21, 2016 at 1:13 am #

          I’ve enjoyed all of your documentaries—the mix of information + music + cinematography. A+ gesamtkunstwerks! (sorry for the random German word drop but can’t think of any other word that fits)

          And to bring up a blast from the past…the “Icon Earth” documentary for Horizon re. globalization and the decay of “technological optimism” rings true today even more than when first aired.

          For anyone interested, find copies of David Malone’s documentaries. They’re just as relevant and informative now as when they first aired.

          I’d particularly recommend BBC Horizon episodes “Icon Earth” and “Flow of Time” and “What We Still Don’t Know” and “Heart v. Mind.”

  4. Michael O'Neill September 20, 2016 at 8:42 pm #

    Check your Twitter account when you have a minute David

    @GTCost – Constantin Gurdjieff
    @WhistleIRL – Jonathan Sugarman
    @MacfarlaneRobin – Robin Macfarlane
    @davidmcw – David McWilliams

    You guys should talk about this article 🙂

    You and Jonathan Sugarman definitely should.

  5. Jon September 20, 2016 at 10:09 pm #

    Where does this leave Sajid Javid (my local MP) who was at the heart of DB when all this happened?

    In fact, in many financial blogs he has been accused of being the main man behind CDO’s….hence the film, The Big Short.

  6. Joe Taylor September 20, 2016 at 10:39 pm #

    Great to see have you back in action David.

    This rang a bell.

    “It would be the end the European experiment. Or the European system would have to try to continue without Germany. And that could only happen if all debts to Germany were repudiated.”

    Just read The Euro: And its Threat to the Future of Europe by Joseph Stiglitz. A snip from that book – “If there is to be a limited breakup of the eurozone, it makes more sense for Germany to leave, instead of the countries around the periphery.”

    More snips from that book here:
    http://nationalcan.ning.com/group/natcan-book-group/forum/topics/the-euro-and-its-threat-to-the-future-of-europe-by-joseph-stiglit

    Suggest searching for Germany among those snips, if not reading them all.

  7. Jon September 20, 2016 at 11:00 pm #

    A note from the USA…..

    A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the $19.5 trillion mark.

    And while that figure may seem absolutely confounding, what’s even more alarming is how rapidly the US government is racking up this debt.

    In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

    The only two years in all of US history that posted higher US debt growth were 2010 and 2011– the peak of the financial crisis.

    Even more acutely, last month the US federal debt grew by $151.5 billion.

    Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

    • bill40 September 30, 2016 at 10:41 am #

      US Federal debt simply reflects inflows of money probably anticipating rate rises. The deposits the Fed holds is expressed as a liability hence the term debt. the Fed can never run out of T-bills or dollars so the debt is always sustainable.

  8. Gisela Gibbon September 20, 2016 at 11:02 pm #

    Hi, David,

    Doesn’t the answer to Deutsche Bank’s problems lie in recouping the physical gold it claims the US is refusing to return, though it rightfully is supposed to belong to Germany?
    I’ve been reading bits about worried Germans who are told that cash transactions over 5000Euros will be discouraged, that they are slowly being forced into a cashless society, that the drive to buy private safes has never been greater, that the historically strong saving culture in Germany is changing, about the unfulfilled demands to see the physical Xetra gold they thought they had bought and now can’t get a hold of, and so on.

    According to the claims the blame for DB’s main problems lies squarely on the US’s shoulders hoarding the gold illegally..it seems strange to me that a fine is supposed to be paid to the very hand that is at least in part responsible for the control over the German gold stocks. Outside of China and India anyhow.

    Looking ahead I suspect that a cashless society would be a dream for world banks, as the need to back the promise of cash will be further reduced, though the general consensus is that gold will be the standard again. All very confusing. I’d be really interested to hear your views on this.

    • Gemma September 26, 2016 at 11:26 am #

      Giesela,

      I would like to clarify something here, for you say:

      Doesn’t the answer to Deutsche Bank’s problems lie in recouping the physical gold it claims the US is refusing to return

      Deutsche Bank is not the Bundesbank; nor is the Bundebank the owner of that gold. The German government is the rightful owner of that gold.

      Under the super-loose banking regulations in force in the US, they are allowed to lend out gold – ‘lend’ being a rather loose term, here – and still consider it to be on their books. So the US government lent out this German gold (at a profit) but could still consider it as theirs. Given the length of time this gold has been “on loan” one might consider it to have been sold. Only, that’s not how it works, is it?

      Only that wouldn’t do the US government much good, would it? It might show them to be the sinking ship the Media is so desperately looking elsewhere to find.

      As to the cash transactions, isn’t this the point of having cash in the first place? So that institutions like the tax gatherers don’t get to hear about it? Any builder with his head screwed on knows how to do big cash jobs – like a house extension – whilst making them look like a small alteration that can soak up all the materials and thus be counted against tax…

      • Gemma September 26, 2016 at 11:29 am #

        Oh, and just another thought: the German government has to pay the US to store that gold…

        not a small sum.

        It’s how the Americans practice fraud, and it’s why their ship is sinking.

  9. Mustafa September 20, 2016 at 11:06 pm #

    Just as an FYI, Jim Rickards was legal counsel at LTCM. In his presentation at the Foreign Correpondents’ Club of Japan earlier this year, he stated that LTCM needed a bailout of $4 billion to unwind it’s derivatives book of $1 trillion. If Deutsche’s derivatives book is approximately $40 trillion and the same calculation holds, Germany will need to cough up approximately $160 billion to unwind Deutsche’s derivatives book.

    • Mustafa September 21, 2016 at 3:54 pm #

      LTCM’s derviatives book was $1.3 trillion, not $1 trillion, so the same ratio would mean ~ $130 billion bailout.

    • hoop September 21, 2016 at 4:19 pm #

      So 130 or 160 billion bailout. Okay the German treasury can borrow at +/- 0 pct for 10 years. Problems solved. Pretend and extent like Japan is doing.

  10. OpenThePodBayDoorsHAL September 21, 2016 at 12:10 am #

    “But Deutsche’s derivatives positions would net out”
    Um that’s exactly what does not happen during a crisis when nobody wants the other guy’s paper, even overnight, the chain of collateral breaks. You saw this on the eve of 9/11 when the head of BONY had to call Sandy Weill on his mobile and ask for a cool $868 mil overnight, just between friends.

    • Tom Kauser September 21, 2016 at 6:18 pm #

      There is a Reggie Middleton post on valuation about when intrinsic value becomes real value and its not pretty when these worlds collide.

  11. Tom Kauser September 21, 2016 at 6:14 pm #

    I.m.f.
    There is going to be quite the rolling auction once the ball gets rolling!
    I remember the weekend before the crisis when uncertainties developed about how interconnected the global banking system really was and it still is
    The same domino
    Acme parachute company awaits your order.

    • Golem XIV September 21, 2016 at 6:45 pm #

      i’ll take 5 please. How quickly can you process my order?

      • Spartacus Rex September 23, 2016 at 7:09 am #

        I’m pretty sure that Al Murray could come up with the solution to fix D Bank’s dilemma. The only problem is that the Germans do not appreciate the genius & wit of British humour.

        In a Just world, the Bundesbank would be forced to backstop DB’s clusterf**k,
        and seize the assets of the principals, even garnish the salaries of Parliament until the crap has been paid off.

        What’s wrong with actually holding the criminals personally liable?

        Cheers

  12. Jon September 21, 2016 at 7:38 pm #

    Apparently, Sajid Javid will not be commenting…..http://www.bromsgroveadvertiser.co.uk/news/14755405.Bromsgrove_MP_quizzed_over_bank_role/?ref=fbshr

  13. BobRocket September 22, 2016 at 8:47 pm #

    Does Deutsche Bank still hold the residential mortgages that the (missold) securities were backing ?

    If they do then a nice circular monetisation deal could be done.

    US bank pays cash at full value to Deutsche for the underlying mortgages.
    Fed buys these mortgages with QE, re-liquifying the US bank
    (the Fed probably already holds the securities from previous QE and so guarantees payment to itself)
    Deutsche pays cash to DoJ
    DoJ hands over cash to Treasury.
    US Gov has 14bn in cash to spend.

    Effectively 14bn of worthless paper liberated from the shareholders of Deutsche turned into cash for the US Gov.

    I’m sure that there are (not insurmountable) rules against this sort of thing, but ‘whatever it takes’.

    This caught my eye

    Prevailing Gray Swans

    https://medium.com/deepconnections/prevailing-gray-swans-7bfd3c292134#.usf4w7t8s

  14. Gemma September 25, 2016 at 7:52 pm #

    Hello, David.

    Sorry for the late response, I was idling away my life in a quiet corner of the DDR.

    Now: you make an interesting remark in that you speak of how Deutsche Bank is being fined $14bn for a fraud conducted by its wholly owned American subsidiary… after all, only an American subsidiary could practice a fraud based on American sub-prime mortgages.

    If this is the case, why pick on Deutsche alone, when the US banks were up to their necks in the fraud… 😉

    The German authorities dealt with the sub-prime housing of the former DDR in a very different way to the US: they redeveloped it, and in investing a modest amount of money, created a micro-economy in redevelopment. Read more…

    https://gemmasponderings.wordpress.com/2015/02/18/the-german-stadtsanierung/

    [Warning: it will take a little effort to get your head around the concepts involved].

    I would also like your thoughts on what I believe to be the case, that most of Deutsche’s derivatives are held in countries that allow such behaviour through having lax banking regulations. That is to say, the US and the UK – oh, the places where the last banking crisis was sparked.

    Because a wholly owned subsidiary in the UK or US will be staffed mainly by locals, who know how to bend the rules of their local administrations. Of course, there will be a few token German managers… who would be kept out of the loop, unless they too were greedy enough to want to practice fraud.

    • Golem XIV September 26, 2016 at 9:44 pm #

      Hello Gemma,

      Please don’t think I was picking on Deutsche and implying they were somehow worse. I have previously written about so many other banks. As you say they were all up to their necks in it.

      My point was just to look at the tension between the bank’s position considered considered purely financially and considered politically. A tension which is there for the ‘flag carrier’ bank in all countries.

      It’s just more acute for Germany because Deutsche is their only G-SIB.

      As for the fraud being done in countries where the rules are made lax precisely so that fraud is possible – I agree. That is precisely why so many banks opened branches in Ireland. I wrote about it years ago in two articles called” Ireland was Germany’s off-shore tart”: It was about the Depfa/HRE debacle.

      And you’re cute right that in London Deutsche was mainly staffed by Americans and English. I am told mostly americans. But I cannot be sure of that. But in Ireland the situation was quite the opposite. The German bank’s dirty dealings were generally done by German’s who were flown in by the day from Frankfurt and flown home again once it was done. See the above articles for the details.

      German banks didn’t do worse stuff that others, they did the same and just as bad.

      English, American, Greek, French, Spanish, Italian and German – all our banks were at it. And all of us are being forced to pay for it.

      • Gemma September 27, 2016 at 9:51 am #

        Thankyou for your forthrightness, David. I appreciate that.

        And yes, I did read your piece about Dublin, and keep it in mind when thinking about European banks.

        Only when you say,

        German banks didn’t do worse stuff that others, they did the same and just as bad.

        Why then is it Deutsche that gets nobbled in the media?

        Where are the shenannigins that Goldman Sachs got up to, the squandered bailins to RBS, the fact that ING paid back its government loan – with interest – and did so two years ago.

        The other issue at stake here is that Germany has an industrial base to its economy, and whilst it is prestigious in Anglo-Saxon economic metrics to have an G-SIB bank, it makes little difference to the productive heart of Germany. Which is, after all, where robust GDP figures are created.

        • steviefinn September 27, 2016 at 7:30 pm #

          IMHO a good round up by Wolf richter :

          http://wolfstreet.com/2016/09/26/deutsche-bank-in-free-fall-shares-coco-bonds-plunge-merkel-gives-cold-shoulder-on-bailout-bank-denies-everything/

          ” The bank is “fundamentally strong,” he said. “Look at our credit story, evaluate risk very low, our credit portfolio very strong, our liquidity position very strong, very comfortable and the third quarter is almost over, and I can tell you today that we are fine and very comfortable here.”

          That’s OK then, CoCo bonds named after a certain clown ?

          • Gemma September 28, 2016 at 3:09 pm #

            That’s all well and good, Stevie, but it does not answer the fundamental problems of why Deutsche is being singled out by the US authorities for doing the very thing they allowed their own banks to get away with, Scot free.

          • steviefinn September 28, 2016 at 8:06 pm #

            Beats me Gemma, but I suppose it is pretty obvious that there is nothing fair in terms of how the DoJ goes about it’s business. I might have this wrong but I think I remember a few years back the US was threatening a similar fine on Deutsche at about the time Merkel was being quite pally with Putin. This was around the same time as one of the major French banks was fined during a period when the US were not too happy about some warships the French were selling to the new bogeyman – probably just my over feverish imagination, but of course they do use finance as a weapon.

            Not good timing for the EU in terms of what is happening with the Italian banks, who I think I am right have not or are not allowed to bail them out with a tax payer bailout, but use the EU much derided by some experts ” Bail-in ” plan. Merkel with an election looming as her popularity falls, cannot afford to give any impression that German taxpayers must foot the bill & of course it wouldn’t go down well with the Italians, who have an important vote coming up.

            Dodgy days ahead anyway & if some of my last paragraph is not quite correct or things have moved on, it’s due to me being back on GoT resulting in me not being able to pay full attention.

            Hope you are well.

          • Gemma October 1, 2016 at 1:37 pm #

            Again, all your comment tells me is that the Americans know when to strike with their politically motivated ‘fines’.

            They use the media as one side of the pincer, the hedge funds as the other.

            Japan and Germany – for all their problems – have between them two of the most secure economies on the planet.

            It will take more than America’s crushing of Deutsche to destabilize them.

            But as a final thought, wouldn’t America actually make more money out of investing with Germany, rather than trying to destroy it????

        • Wirplit September 29, 2016 at 10:34 pm #

          You ask ..Why is it Deutsche that gets clobbered in the media? I’d suggest that it may be because its the most exposed bank with its huge derivative book. That is in fact and forgive me if I am wrong, the largest of any bank at $60 trillion.

          And perhaps also because the rest of the world saw what German’s finance minister Wolfgang Schauble was willing to do to Greece and the self righteousness expressed by an economy that sees constant balance of payment surpluses not as distablizing imbalances ( as Keynes did) but as a sign of its inherent economic rectitude.
          Now they are caught on the hook of their own devising. The rules you know they set such store by when it came to other countries… but the rules they will almost certain have to break…

          A german word might fit the way a lot of the world may feel ; Schadenfreude.
          After all I am not sure there is anyone left who still think US and UK banks have any real rules. But in a Global meltdown no bank will be untouched,

          … and now with hedge funds pulling out of Deutsche we are maybe close to some kind of denouement

          • Gemma October 1, 2016 at 1:34 pm #

            Apologies for the late response.

            You say “I’d suggest that it may be because its the most exposed bank with its huge derivative book. That is in fact and forgive me if I am wrong, the largest of any bank at $60 trillion.”

            So you’ve been reading the newspapers, huh? What about all the American – and British – banks that have stacks of derivatives that make this pile look like a molehill.

            I would like to ask you if you actually know where these Deutsche derivatives are held?

            Do you?

            The answer might surprise you…

            … because it’s not spoken of in the media.

          • Phil T. October 6, 2016 at 10:14 pm #

            It might be worth a look at this 1-page presentation of data sourced from the FDIC/IRA Bank Monitor, Q1 2008.

            http://bigpicture.typepad.com/comments/files/bankcds_capital.pdf

            It would be very interesting to see/read an explanation of how the derivative exposure presented in the above link has evolved to what we have before us currently.

        • John G October 27, 2016 at 7:43 am #

          I expect you are a paid troll for Deutsche Bank, Gemma.

          Enough with the racist angle please.

  15. bill40 September 30, 2016 at 11:17 am #

    Great to have you back David, I’d almost given up on another post before Christmas!! I have to agree with those above suggesting that geopolitics are heavily in play here, somebody has identified Germany’s achillies heel and gone for the jugular, if I may amusingly mix my metaphors.

    I find it very hard to believe that DBs position is radically different to three months ago but DB have kicked right in the tenderest place a bank has, in the confidence. It’s material position is largely irrelevant, it’s enough that it’s been asked at all, that’s all it takes. Who and why can be mere speculation to us mere mortals.

    FWIW my opinion is that there is no way DB will be allowed to go under and someone will make the odd Euro or three when it’s fixed as it must and will be. Oh and guess who’s going to pick up the tab as usual, that wasn’t a question, we all know.

    **Advertising Klaxon** (I hope David doesn’t mind)

    For those who folornly look in here praying for a new post, like myself, I have started a new blog here https://wordpress.com/post/bill40.wordpress.com/969 and I hope you’ll all drop in sometime, comment and share. You’ll also have Gemma for company if that helps! Tonights post will be an infomercial and will have David in it so I hope he’ll pop in too.

    • BobRocket September 30, 2016 at 11:46 am #

      Hi Bill,

      you were logged in to WordPress when you copied that link, here is the one that mere mortals have to use

      https://bill40.wordpress.com/

      • bill40 September 30, 2016 at 5:26 pm #

        Thanks Bob, it’s an easy thing to forget. Not a patch on this blog, of course, but I’ll try to keep it daily.

        • BobRocket September 30, 2016 at 8:43 pm #

          Excellent, I’ll add it to my essential reading list.

          (now if I could just find where Hawkeye posts)

          I notice Deutsche Bank was on a bit of a roller coaster today, wonder if they had a proxy buy their own shares from 9:20am.
          I’m not sure I would have left any money in there over the Bank Holiday weekend (if I had any)

          • Hawkeye October 4, 2016 at 12:32 pm #

            Nice to get a namecheck, Bob!

            I’m afraid I don’t get much time to write blogs these days. I do wander along by here from time to time, but rarely comment, owing to work, family & studying!

            Many of my longer pieces are on the Golem blog as guest posts, but a full archive is here:

            https://forensicstatistician.wordpress.com/

            Now my studying has just finished, I may get back into the swing of writing again……

          • bill40 October 10, 2016 at 11:16 am #

            Hi Bob,

            I hope you’re still reading and forgive a broken promise. I have no stock of posts I can use in event of flu. back up and going strong, be great to see the XIVers there.

            https://bill40.wordpress.com/2016/10/10/neo-liberalismwe-are-big-you-are-small-pt-1

  16. Syzygy October 1, 2016 at 1:48 am #

    I believe that the World Service just reported the coincidence that the fine has been reduced to 5.5 billion.

    • Wirplit October 2, 2016 at 12:53 am #

      These seem to be political games as much as economic. US prosecutors out to make a name for themselves rumour at a $14 billion fine which may be not unrelated to the fine the EU put on Apple. A bit of transatlantic tit for tat?
      While Merkel vehemently denies she will aid DB because if she does she is likely to be toast in the forthcoming elections so unpopular is the idea ( not surprisingly) among the German public of bailing out banks.
      So then the rumour comes out that the fine will be much less in the form of a digestible $5 billion and the DB stocks leaps up.

      Germany has been asking for its gold back from the US which they probably don’t actually possess so likely to be somewhat embarrassing for the last superpower. So a big fat fine to be levied on German’s biggest bank is a kind of reposte. All in all a kind of game of Who is going to kick whose house of cards over? An economic Mexican stand off. You show us our weak links and we will assuredly do the same favour to you. They don’t actually want to do it of course they just want to indicate they could and to let the other side know they could. Mutually assured financial meltdown.

      its the way nice nations play when the going gets tough….rough.

      • steviefinn October 2, 2016 at 1:32 pm #

        Speaking of houses made from cards, another zombie(s) rushed into the EU intensive sticky plaster unit & I suppose that Draghi might well be involved in stealth transfusions in various areas in order to keep the whole ghastly show on the road. The word undead comes to mind & maybe they can keep it all going indefinitely…..someone tell me I am wrong, but what is worse, being the staggering undead or a total collapse into death, with perhaps a painful but hopeful re-birth ?

        http://wolfstreet.com/2016/10/01/stealth-bailout-merger-bankia-banco-mare-nostrum-spain/

  17. steviefinn October 8, 2016 at 1:30 pm #

    Away from DB for a moment but not from the cancer of which that bank is but one large tumour of the metastasis. A nice exposure of the elites BS in reaction to the fact that globalisation is if not dead, under serious pressure :

    ” Globalization is done. And while we can discuss whether that’s of necessity or not, and I continue to contend that the end of growth equals the end of all centralization including globalization, fact is that globalization was never designed to share anything at all, other than perhaps wealth among elites, and low wages among everyone else.

    The EU and IMF have not delivered on what they promised, in the same way that traditional parties have not, from the US to UK to basically all of Europe. They promised growth, and growth is gone. They may have delivered for their pay masters, but they lost the rest of the world.

    Anything else is just hot air. But that doesn’t mean they will hesitate to use their control of the military and police to hold on to what they got. In fact, that’s guaranteed. But it would only be viable in a dictatorial society, and even then.

    We are transcending into an entirely different stage of our lives, our economies, our societies. Growth is gone, it went out the window long ago only to be replaced with debt. And that’s going to take a lot of getting used to. But there’s nothing that says we couldn’t see it coming ”

    .https://www.theautomaticearth.com/2016/10/the-imf-and-all-the-other-losers/

    • Jill October 8, 2016 at 9:36 pm #

      The U.S stock market peaked on Apr 14 ’15 as reflected by the over 5,000 U.S. exchange-traded common stocks which is best measured by the 1,700 stock sampling of the Value Line Geometric Index (XVG), and the average all-U.S. equity mutual fund, as reflected by the Lipper Mutual Fund Indexes.

      Nine months earlier in Jul ’14, the global stock market topped out, as both measured, first, by the peak in the MCSI World ex the SPX on Jul 3 ’14, and then, second, by the peak in the Global Dow, which includes the SPX, on Jul 24 ‘14. These global stock market peaks were more than 26 months ago – talk about a broadly-unrecognized major market top!

      Then ten months later on May 22 ’15, five weeks after the XVG peaked, the global equity market made its second of what is arguably a double top, especially in the Global Dow. That’s when the global stock market clearly started its bear market which continues through today.

  18. Andrea Bayer December 15, 2016 at 4:45 pm #

    I guess, telling you that Merkel’s advisors during the 2008 crisis and afterwards have been bankers says it all. She was such a good friend of Josef Ackerman (former CEO of Deutsche Bank) that he celebrated his birthday in the Federal Chancellery http://www.spiegel.de/politik/deutschland/party-im-kanzleramt-ackermann-feierte-auf-staatskosten-a-644659.html

    This woman is known for changing her opinion easily. F.e. she supported nuclear energy plans until Fukushima happened. She was against bailouts and then for bailouts. She is an American puppet, expressing her regrets to the US that Schroeder (former chancellor) didn’t support the Iraq war and so on, and so on.

    • Golem XIV December 15, 2016 at 9:56 pm #

      We have a whole generation of captured politicians. None of them able to imagine anything beyond the globalist neoliberal consensus. They have to go. We have to be better.

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