So much for last week’s rumor of an imminent reduction in the DOJ $14 billion settlement, which sent the price of DB soaring, and propelled the global stock market higher.
Moments ago, Reuters reported that the German government is pursuing “discreet talks” with U.S. authorities to help Deutsche Bank secure a swift settlement over the sale of toxic mortgage bonds.
German officials have, until now, played down their role in the standoff, saying it is up to Deutsche to work out a deal with the DOJ, which is demanding $14 billion to settle RMBS misselling claims. But now it has been confirmed that Berlin government officials are hoping to “facilitate a quick deal that would buy Deutsche Bank time to regain its footing.” Continue reading »
Oct 4, 2016
In this episode of the Keiser Report, Max and Stacy discuss how finance is ruining America. In the second half, Max interviews Ronald Reagan’s budget director, David Stockman, author of ‘Trumped: A Nation on the Brink of Ruin’… And How to Bring It Back.
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ING Groep’s plans to shed 7,000 jobs and invest in its digital platforms to make annual savings of 900 million euros ($1 billion) by 2021, drew swift criticism from unions of the Netherlands’ largest financial services company on Monday.
The layoffs represent slightly less than 12 percent of ING’s 52,000 workforce because nearly 1,000 are expected to come at suppliers rather than the bank itself.
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One day after Germany’s second largest lender confirmed reports of a massive restructuring when it announced it would lay off nearly 10,000 employees, or about 20% of its entire workforce while slashing the bank’s dividend for the rest of the year, the Dutch newspaper Het Financieele Dagblad reported that ING Groep, the largest Netherlands lender, will announce thousands of job cuts at its investor day on Monday. Continue reading »
It is not solvency, or the lack of capital – a vague, synthetic, and usually quite arbitrary concept, determined by regulators – that kills a bank; it is – as Dick Fuld will tell anyone who bothers to listen – the loss of (access to) liquidity: cold, hard, fungible (something Jon Corzine knew all too well when he commingled and was caught) cash, that pushes a bank into its grave, usually quite rapidly: recall that it took Lehman just a few days for its stock to plunge from the high double digits to zero.
It is also liquidity, or rather concerns about it, that sent Deutsche Bank stock crashing to new all time lows earlier today: after all, the investing world already knew for nearly two weeks that its capitalization is insufficient. As we reported earlier this week, it was a report by Citigroup, among many other, that found how badly undercapitalized the German lender is, noting that DB’s “leverage ratio, at 3.4%, looks even worse relative to the 4.5% company target by 2018” and calculated that while he only models €2.9bn in litigation charges over 2H16-2017 – far less than the $14 billion settlement figure proposed by the DOJ – and includes a successful disposal of a 70% stake in Postbank at end-2017 for 0.4x book he still only reaches a CET 1 ratio of 11.6% by end-2018, meaning the bank would have a Tier 1 capital €3bn shortfall to the company target of 12.5%, and a leverage ratio of 3.9%, resulting in an €8bn shortfall to the target of 4.5%. Continue reading »
Instead of doing what many have correctly suggested he should be doing, namely focusing on ways to raise more capital for the undercapitalized Deutsche Bank in order to stem the slow (at first) liquidity leak, first thing this morning CEO John Cryan issued another morale-boosting note to employees of Deustche Bank who have been watching their stock price crash to another record low, dipping under €10 in early trading for the first time ever. In the memo the embattled CEO worryingly did what Dick Fuld and other chief executives did when they felt the situation slipping out of control, namely blaming evil “rumor-spreading” shorts, saying “our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. … Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.”
Just as important, Cryan confirms the Bloomberg report that “a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns.” As we explained last night, the concerns are very much justified if they spread to the biggest risk-factor for the German bank: its depositors, which collectively hold over €550 billion in liquidity-providing instruments. Continue reading »
What will prevent TPTB from taking over all of that gold after the financial system has collapsed and there is total chaos everywhere?
For decades, Switzerland had a reputation for bank secrecy that made it the most sought after tax haven for billionaires from around the globe. But, after more than 80 years of secrecy, a series of bilateral agreements with countries around the world, including America’s Foreign Account Tax Compliance Act (FATCA), have forced the private-banking industry in Switzerland to embrace an entirely new era of transparency that requires a full exchange of tax-relevant information with more than a hundred countries.
Which, as Bloomberg points out, has been a huge boon for Swiss operators of private vaults which are not subject to the same transparency and reporting requirements as banks. In fact, these super-secret, privately operated storage facilities buried around the Swiss Alps can basically store anything from anybody because they’re not even required to report suspicious activity to Switzerland’s Money Laundering Reporting Office.
Counterparties lose confidence, withdraw cash.
Deutsche Bank, with $2 trillion in assets, amounting to 58% of Germany’s GDP, one of the most globally interwoven banks, with gross notional derivatives exposure of €46 trillion, right at the top along with JP Morgan (booked as €41 billion in derivative trading assets after netting and collateral) – this creature of risk and malfeasance, is finally starting to scare its counterparties.
This is how Lehman came unglued. Slowly and then all of a sudden.
Deutsche Bank concerns just went to ’11’ as Bloomberg reports a number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank.
While the vast majority of Deutsche Bank’s more than 200 derivatives-clearing clients have made no changes, some funds that use the bank’s prime brokerage service have moved part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News.
Millennium Partners, Capula Investment Management and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation who declined to be identified talking about confidential client matters. Continue reading »
With Deutsche Bank mercifully missing from overnight headlines for the first day in almost two weeks, it is time to bring attention to Germany’s second largest bank which, as we first reported earlier in the week citing a Handelsblatt leak, confirmed it is also going through a historic rough patch. This morning, Commerzbank said it plans a wide-ranging business restructuring that includes scrapping the bank’s dividend for the rest of the year, terminating nearly 10,000 jobs – roughly 20% of its workforce – and merging two large units.
“The focus on the core business, with some business activities being discontinued, and the digitalization and automation of workflows will lead to staff reductions amounting to around 9,600 full-time positions,” Germany’s second-largest lender said. Continue reading »
- Annie Korkki, 37, who works for JP Morgan Chase in Denver, and Robin Korkki, 42, a trader from Chicago, were found dead last Thursday
- They were found unconscious in their villa at the Maia Luxury Resort and Spa in the Seychelles off the coast of Africa a week into their vacation
- Preliminary examination indicated there were no signs of violence or aggression on the women’s bodies
- Police said the women had been drinking alcohol throughout the day and were helped to their room by staff that night
- It was the last time there were seen before they were found dead the next morning
- Their heartbroken family is currently pressing officials for answers into what led to their sudden deaths
Two sisters from Minnesota were found dead inside their luxury resort villa a week into their vacation in the Seychelles.
Annie Korkki, 37, and Robin Korkki, 42, were discovered in their villa at the Maia Luxury Resort and Spa last Thursday around noon, authorities in the Seychelles said. Continue reading »
Just yesterday we wrote about how central banks are “running out of road” to be able to provide any meaningful incremental “stimulus” to the economy (see “Bridgewater Calculates How Much Time Central Banks Have Left“). As Bridgewater’s Ray Dalio pointed out, at some point in the not so distant future, the ECB and BOJ will have purchased every eligible security possible. Even if the central banks do continue to expand the scope of their existing programs, eventually they will simply run out of securities to buy.
Ok fine, central banks are “running out of road”, however at the same time they are terrified to rip (or even peel) the band-aid off. This has put the system in an unstable equilibrium: on one hand, central bankers – as even they admit – need to hand over the growth impulse to governments, yet on the other hand, they are terrified of even the smallest change to the status quo as they know they may undo some 7 years of “wealth effect” creation overnight.
How much longer can this charade continue? Continue reading »
For your entertainment.
In what is surely the most stealthy version of Wednesday humor we have ever posted, Bloomberg reports that according to Yigit Bulut, chief adviser to Turkish President Recep Erdogan, Turkey should consider “using a new wealth fund or a group of state-owned banks to buy” the embattled Deutsche Bank. Bulut made the proposal on Tuesday via his Twitter account, saying Germany’s largest lender should be made into a Turkish bank.
— Y???T BULUT (@yigitbulutt) September 28, 2016
“For months on TV programs, I’ve been calling on Turkey’s private and public capital: ‘Some very good companies in the EU are going to fall into trouble and we need to be ready to buy a controlling stake in them,’” Bulut wrote on Twitter. “Wouldn’t you be happy to make Germany’s biggest bank into a Turkish bank!!” the advisor said, cited by Bloomberg. Continue reading »
And again: Prepare for collapse.
Since 2008, I’ve been warning Natural News readers about the inevitable, mathematically unavoidable global debt collapse. For the last eight years, crooked politicians and criminal banksters have been “kicking the can down the road” with endless money printing and currency debasement. Now, it appears, we’ve all run out of road.
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“Bad choice. I prefer the late Frank Zappa’s “THE MOTHERS OF INVENTION”…”
Watch the video here:
Today’s UK Column News with Brian Gerrish, Mike Robinson & David Ellis, including:
START Merrill Lynch &… : a Twelve point-Five Million dollar Fine.
02:48 Fast-paced Algorithmic Trading & the Race for Milliseconds
03:57 Deutsche Bank & the Clinton Effect : Shares continue to Fall
05:24 RBS & an Ulster Bank Whistleblower to speak at Winchester
09:15 ‘Open Government’ & the Great Façade of… ‘Transparency’
12:38 Parliamentarians… the Esteemed Newmark & Gary Streeter
17:49 Assert the Rule of Law in Glastonbury, & Winchester Tickets
19:25 Mogherini & Stoltenberg to Merge E.U. Defence with NATO
22:57 Systemic Plan : Union of Currency, Military, Treasury, Polity
29:24 ‘Operation Northmoor’ & the lawless National Crime Agency
31:47 The systematic annihilation of Her Majesty’s Armed Services
32:52 RAF St Mawgan : An EU Base for its Anti-British Operations
35:25 Engine Fires & the F-35 Debacle | Prince Charles & the UAE
42:14 Jabhat Al-Nusra Commander al-Ezz, ‘Our Israeli & US Allies’
H/t reader I.G.
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While the market’s attention has been transfixed by the latest crash in the stock of Europe’s biggest bank, now that concerns about Deutsche Bank’s $2 trillion balance sheet have violently resurfaced, it is worth recalling that Germany’s “other” mega bank, DB’s smaller rival, Commerzbank, whose balance sheet is hardly looking much healthier, is planning to cut around 9,000 jobs over the coming years as Germany’s second biggest lender pushes ahead with a restructuring plan, Handelsblatt reported earlier today, citing unnamed sources in the finance industry.
The round of layoffs would eliminate a massive 18% of the bank’s entire workforce. Continue reading »
Time to toss yet another “conspiracy theory” on the composite heap of “theories that became fact.” A recurring theme we have pounded the table on over the past nearly 8 years is that central bank policy has been the primary driver leading to not only a record wealth and income divide, but to such manifestations of populist (and nationalist) fury as Brexit, the gradual collapse of the Eurozone and, of course, Trump.
Moments ago, ECB board member Benoit Coeure, speaking in Rome, said that “low forever” rates would risk tearing up the social fabric. Translated: if extended indefinitely, the ECB’s monetary policy risks the collapse of not only the Eurozone, but also could lead to social unrest, violence and even civil war.
Quoted by Bloomberg, Coeure said that “moving from interest rates being ‘low for long’ to being ‘low forever’ would severely limit the room for maneuver for conventional monetary policy tools, but even more worryingly, it would threaten the contract between generations as well as risk tearing up our social fabric.” Which is a more polite phrasing of what we have said all along: that it is central banks themselves, and their idiotic policies that have led the world to the current unstable state, when mass shootings and/or terrorist activity has become an almost daily event. Continue reading »
“You Can’t Compare Deutsche Bank To Lehman”
… because Deutsche is much, much worse than Lehman.
So move along, there is nothing to see here.
“When it’s important, you have to lie,” is the now well-known mantra from European leaders when the crisis hit. So when a German politician proclaims “you can’t compare Deutsche Bank with Lehman. The bank is in a position to get out of this situation on its own,” it’s time to panic. Just a week after the 8th anniversary of Lehman’s collapse, the multi-trillion dollar derivative book of Deutsche Bank dwarfs that of Lehman… and the credit markets are starting to wake up again.
Following government exclamations that there will be no bailout for Deutsche Bank, Hans Michelbeck – from Merkel’s Christian Democrat-led bloc and a member of German lower house’s finance committee – confirms it is “unimaginable” that the German government would support Deutsche Bank AG with taxpayers’ money. Continue reading »
“When will she buckle?”
Maybe somewhere between Sept. 30 and Oct. 12? (Sept. 30 would make a lot of sense.)
So always go shopping on Thursdays and stock up on everything.
Oh wait … I can tell you exactly when Deutsche will collapse:
It will collapse when Lord Rothschild is pressing the ‘sell all Deutsche shares’ button …
H/t reader squodgy:
“Angela is NOT a Rothschild. She has no say in the future of the Deutsche Bank. That rests with you know who.
Based on the historical events pertaining to the rule of the “too big to fail” principle, and the current share valuation, would it be prudent to consider purchasing shares in it?……or…. based on the principle of exclusive Rothschild ownership comprising Debentures, Preferential Shares, Class ‘A’s, Class ‘B’s and then the risky unprotected dross which we mere serfs can buy….”Ordinary Working Class Shares” it seems those in power benefit at our expense yet again………So steer clear.”
When will she buckle?
Shares of Deutsche Bank got bashed 7.6% today, to €10.49 in Frankfurt, down 67% from April 2015, to the lowest level since they started trading on the Xetra exchange in 1992. They traded below that level in the early 1980s, but decades of inflation have whittled down the purchasing power so much that comparisons are meaningless.
Deutsche Bank’s 5-year default probability spiked to the highest level this year. Continue reading »