Dick’s cuts 400 jobs as golf now less popular (MW)
Kerry arrives in Israel, pushes for peace (Reuters) (Sure!)
Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
Overnight Media Digest
* Two U.S. appeals courts issued conflicting rulings on subsidies for health coverage purchased on federal insurance exchanges, clouding a major part of Obama’s health law. (http://on.wsj.com/1pb81yo)
* The Federal Reserve Bank of New York found that Deutsche Bank AG’s U.S. operations suffer from a litany of serious financial reporting problems that the lender has known about for years but not fixed. (http://on.wsj.com/1jUoOXe) Continue reading »
“As for Deutsche Bank’s response perhaps the simplest and most effective one would be for the Frankfurt megabank to tell the NY Fed that perhaps its own 150x leverage is just a little more worthy of attention.”
First it was French BNP that was punished with a $9 billion legal fee after France refused to cancel the Mistral warship shipment to Russia (which promptly led to French National Bank head Christian Noyer to warn that the days of the USD as a reserve currency are numbered), and now moments ago, none other than the 150x-levered NY Fed tapped Angela Merkel on the shoulder with a polite reminder to vote “Yes” on the next, “Level-3″ round of Russia sanctions when it revealed, via the WSJ, that “Deutsche Bank’s giant U.S. operations suffer from a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight and weak technology systems.”
What could possibly go wrong? Well… this. Recall that as we have shown for two years in a row, Deutsche has a total derivative exposure that amounts to €55 trillion or just about $75 trillion. That’s a trillion with a T, and is about 100 times greater than the €522 billion in deposits the bank has. It is also 5x greater than the GDP of Europe and more or less the same as the GDP of… the world.
In a letter to Deutsche Bank executives last December, a senior official with the New York Fed wrote that financial reports produced by some of the bank’s U.S. arms “are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm’s entire U.S. regulatory reporting structure requires wide-ranging remedial action.”
The criticism from the New York Fed represents a sharp rebuke to one of the world’s biggest banks, and it comes at a time when federal regulators say they are increasingly focused on the health of overseas lenders with substantial U.S. operations.
The Dec. 11 letter, excerpts of which were reviewed by the Journal, said Deutsche Bank had made “no progress” at fixing previously identified problems. It said examiners found “material errors and poor data integrity” in its U.S. entities’ public filings, which are used by regulators, economists and investors to evaluate its operations.
The shortcomings amount to a “systemic breakdown” and “expose the firm to significant operational risk and misstated regulatory reports,” said the letter from Daniel Muccia, a New York Fed senior vice president responsible for supervising Deutsche Bank.
Deutsche Bank’s external auditor, KPMG LLP, also identified “deficiencies” in the way the bank’s U.S. entities were reporting financial data in 2013, according to a Deutsche Bank email reviewed by the Journal.
Oh wait, so those €55 trillion in derivatives are actually completely fabricated? Well if that doesn’t send the S&P 500 limit up nothing will.
DB’s response is the generic one already attempted by that other permacriminal bank, Barclays, which hired a few hundred compliance people after it was revealed that the British firm was manipulating and rigging pretty much every product and market it was involved in.
“We have been working diligently to further strengthen our systems and controls and are committed to being best in class,” a Deutsche Bank spokesman said Tuesday. As part of this, he said, the bank is spending €1 billion globally and appointing 1,300 people, including about 500 compliance, risk and technology employees in the U.S. Mr. Muccia declined to comment.
Sadly for now what this latest Pandora’s box means is that confidence in Europe’s insolvent banks just crashed with a bang once again, not that it would be reflected in the stock’s rigged price of course: rigged most likely by Deutsche Bank among other of course.
The New York Fed’s concerns also pose a challenge for Deutsche Bank’s longtime finance chief, Stefan Krause, who is ultimately responsible for the company’s financial figures and has been spearheading efforts to improve the quality of the bank’s reporting.
The concerns from regulators strike at the heart of an issue plaguing many of the world’s big banks: Some investors lack confidence in the integrity of their numbers. Such fears have been especially prevalent in Europe.
Then again, none of DB’s numbers actually matter: if the banks needs a bailout the Fed will promptly step in, and today’s advisory has one simple end point, which happens to be the same as the recent BNP $9 billion fine – don’t even dare to side with Putin over the US. Because you sure have big bank over there Germany… It would be a pity if the NY Fed i) revealed just how insolvent it truly was and ii) decided not to bail it out subsequently.
* * *
As for Deutsche Bank’s response perhaps the simplest and most effective one would be for the Frankfurt megabank to tell the NY Fed that perhaps its own 150x leverage is just a little more worthy of attention.
As we reported over the weekend in “By “Punishing” France, The US Just Accelerated The Demise Of The Dollar“, following the record $9 billion fine against French BNP, the outcry has been fast and furious, with virtually everyone in the local chain of command, from the CEO of Total to the head of the Bank of France (and ECB member) Christian Noyer, all saying that the US is now clearly abusing the reserve power of the dollar and it is time to move away from a dollar-based reserve currency (how that jives with concurrent French demands for a lower EUR is a different, incomprehensible matter entirely).
It appears that having pushed France forcefully into the Russia-China Eurasian, and anti-US camp, the US will now do the same with Germany. Because after infuriating the German population by first refusing to return their gold contained (the legend goes) at the New York Fed, and then with scandal after spying scandal, most recently involving the CIA directly soliciting a German double agent, now the time has come to “punish” Germany’s largest banks for the same kind of money laundering that BNP was engaged in. As the NYT and Reuters report, the time has come to shift away from the BNP scandal and focus on what will soon be the Commerzbank and Deutsche Bank fallout.
According to the NYT, the money laundering crackdown is “bound for another European financial center: Germany. State and federal authorities have begun settlement talks with Commerzbank, Germany’s second-largest lender, over the bank’s dealings with Iran and other countries blacklisted by the United States, according to people briefed on the matter. The bank, which is suspected of transferring money through its American operations on behalf of companies in Iran and Sudan, could strike a settlement deal with the state and federal authorities as soon as this summer, said the people briefed on the matter, who were not authorized to speak publicly.
The contours of a settlement, which the authorities have only begun to sketch out, are expected to include at least $500 million in penalties for Commerzbank, the people added. Although prosecutors were still weighing punishments, the people briefed on the matter said that the bank would most likely face a so-called deferred prosecution agreement, which would suspend criminal charges in exchange for the financial penalty and other concessions.
It’s not just Commerzbank – a settlement with the smaller bank will merely pave the way for the punishment of the biggest bank of all (in terms of groiss derivative notional held): Deutsche Bank.
A potential deal with Commerzbank — which is expected to pave the way for a separate settlement with Deutsche Bank, Germany’s largest bank — would pale in comparison to the case announced last week against France’s biggest bank, BNP Paribas. The French bank agreed to pay a record $8.9 billion penalty and plead guilty to criminal charges for processing transactions on behalf of Sudan and other countries that America has hit with sanctions, a rare criminal action against a financial giant.
As NYT adds, correctly, “The Commerzbank investigation features an added twist: The bank is 17 percent owned by the German government. It is unclear whether — as in the BNP case, which led French authorities to intervene on the bank’s behalf — the settlement talks could inflame diplomatic tensions between Washington and Berlin.”
Of course, since this is the ridiculous “scorched earth” diplomatic policy, if one may call it that, of the Obama administration, nobody is surprised any more that the US president is alienating one former ally after another.
As we first observed a few weeks ago when we revealed JPM’s involvement in all of this money laundering, “some critics have questioned why American authorities have set their eye on European banks. The answer, authorities say, is that American banks by and large avoided processing transactions for Iran and Sudan. But American banks are not immune from touching dirty money. Citigroup’s Banamex unit is under investigation for processing money linked to a drug cartel. And in January, JPMorgan Chase reached a roughly $2 billion deal with the authorities over ignoring signs of the Ponzi scheme orchestrated by Bernard L. Madoff, who held accounts at the bank for over two decades.”
Not only that but as we wrote over the weekend, the bank that was instrumental in facilitating BNP’s money laundering for nearly a decade was none other than JPM. One wonders if JPM also “unwittingly” was the bank that made German money laundering around the globe possible. Did we mention unwittingly?
Still, while one can debate the idiocy of US foreign policy, eager to push European allies into the willing hands of Russia and China at the worst possible moment, when regional and civil wars and conflicts are suddenly breaking out across all key geopolitical hotspots, one wonders: in the case of BNP, the “fine” was as a result of French unwillingness to halt the Russian amphibious warship deal despite US demands. So it would be curious just what the US blackmail against German banks is for: one really does wonder just what punishment Angela Merkel deserves behind the scenes in the eyes of John Kerry et clueless al, to punish her and Germany so blatantly for the entire world to see.
One thing is clear: if the US thinks that Germany will continue to consider America its BFF and make zero contingency plans for when the alliance with the US finally crashes and burns, it will be truly surprised when the Eurasian alliance of Russia and China finally announces its final, all-important, missing link member: the manufacturing and export powerhouse that is Germany itself.
The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. As you will see below, the total amount of debt in the world is now more than three times greater than global GDP. In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt. But even that number pales in comparison to the exposure that big global banks have to derivatives contracts. It is hard to put into words how reckless they have been. At the low end of the estimates, the total exposure that global banks have to derivatives contracts is 710 trillion dollars. That is an amount of money that is almost unimaginable. And the reality of the matter is that there is really not all that much actual “money” in circulation today. In fact, as you will read about below, there is only a little bit more than a trillion dollars of U.S. currency that you can actually hold in your hands in existence. If we all went out and tried to close our bank accounts and investment portfolios all at once, that would create a major league crisis. The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises. It is literally a miracle that it has survived for so long without collapsing already. Continue reading »
“Perhaps the Fed and other central banks are controlling the market too much these days with their guidance. In the old days central banks used to like to create an element of surprise to ensure that markets didn’t become complacent. With the crisis fresh in people’s minds, with the stock of debt still huge and with the recovery still so uncertain they feel they cannot risk creating too much uncertainty at the moment. ” – Deutsche Bank
Earlier today many were stunned when the historic, 117-year old, London Silver Fix announced that in three months it would no longer exist. However, silver is only one half of the world’s two best known precious metals. Which is why we decided to take a long, hard look at that other fix: gold.
The reason for this particular inquiry is because in the aftermath of the rapid and dramatic departure of the world’s largest bank by outstanding notional derivatives, and Europe’s biggest bank by any metric, Deutsche Bank, from the precious metal fix, something felt out of place: almost as if the participants of the “fixing” process which for so many years took place in the office of none other than Rothschild on St. Swithin’s Lane in London, were suddenly scrambling to disappear without a trace.
In conducting our research we hope to not only memorialize just who are these particular individuals who “fix” gold using nothing but publicly available information of course – because after all it is not as if they have anything to hide or fear – but to connect some of the very peculiar dots behind the scenes of what to some, is the original, and most manipulated market in history – that of gold. Continue reading »
Three months ago, we discussed the increasingly close eye that regulators were keeping on Deutsche Bank (and in fact many other precious metal fix providers) as manipulation concerns shifted from conspiracy theory to conspiracy fact. At the time, Deutsche – among other banks – had suggested it would relinquish its role on the London Fixing committee and was actively marketing its seat to other LBMA members – it failed to find a willing buyer; the WSJ now confirms…
DEUTSCHE BANK SAID TO BE UNABLE TO FIND BUYER FOR GOLD SEAT
DEUTSCHE BANK RESIGNS SEAT ON GOLD, SILVER FIX, GIVES TWO WEEKS NOTICE – SOURCE
This is hardly surprising given previous comments that possible manipulation of precious metals “is worse than the Libor-rigging scandal.” but it does leave us wondering who is left to do the manipulating? It seems no one wants to be part of the fixing process (critical for so many derivatives contracts) unless they are allowed to manipulate it to their own needs.
As a reminder, Deutsche is one of five banks involved in the twice-daily gold fix for global price setting. Continue reading »
It is perhaps supremely ironic that the last time we did an in depth analysis of Deutsche Bank’s financial situation was precisely a year ago, when the largest bank in Europe (and according to some, the world), stunned its investors with a 10% equity dilution. Why the capital raise if everything was as peachy as the ECB promised it had been? It turned out, nothing was peachy, and in fact DB would proceed to undergo a massive balance sheet deleveraging campaign over the next year, in which it would quietly dispose of all the ugly stuff on its balance sheet during the relentless Fed and BOJ-inspired “dash for trash” rally in a way not to spook investors about everything else that may be beneath the Deutsche covers. Continue reading »
The dismal list of financial executive deaths has recently increased to 11 in the last few months. Speculation has surrounded many of these deaths (and suicides) as to the reasoning; none more than the first – William Broeksmit, an executive who worked in Deutsche Bank’s risk function and advised senior leadership who hanged himself in his South Kensington home in late January. However, as the WSJ reports, we now know why this poor man felt compelled to take his own life: he was “anxious about various authorities investigating areas of the bank where he worked” (and yes, we are well aware of the grammatical and temporal impossibilities suggested by this article’s title). Continue reading »
What are we to make of this sudden rash of banker suicides? Does this trail of dead bankers lead somewhere? Or could it be just a coincidence that so many bankers have died in such close proximity? I will be perfectly honest and admit that I do not know what is going on. But there are some common themes that seem to link at least some of these deaths together. First of all, most of these men were in good health and in their prime working years. Secondly, most of these “suicides” seem to have come out of nowhere and were a total surprise to their families. Thirdly, three of the dead bankers worked for JP Morgan. Fourthly, several of these individuals were either involved in foreign exchange trading or the trading of derivatives in some way. So when “a foreign exchange trader” jumped to his death from the top of JP Morgan’s Hong Kong headquarters this morning, that definitely raised my eyebrows. These dead bankers are starting to pile up, and something definitely stinks about this whole thing.
Goldman Sachs and Barclays among banks investigated after reports some traders shared information about currency positions
New York state’s top financial regulator has demanded documents from more than a dozen banks including Barclays, Deutsche, Goldman Sachs and RBS as a probe widened into trading practices in the $5.3tn-a-day global foreign exchange markets.
Benjamin Lawsky, New York’s financial services superintendent, made the move following the banks’ decision to fire or suspend at least 20 traders following reports that employees at some firms had shared information about their currency positions with counterparts at other companies.
In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud.
The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the financial crisis with the knowledge of senior executives. Two other whistleblowers have brought similar charges against Deutsche Bank.
With Deutsche Bank quitting the price-setting panel for gold and Bafin bearing down on the manipulators, Eric Sprott provides some more color on where the manipulation in the precious metals markets is underway (and when it will end)…
As we very well know, 2013 was a difficult but also puzzling year for precious metals investors. The price of gold, silver and their related equities declined by a significant amount while demand for physical bullion from emerging markets and their Central Banks was exceptionally strong.
Germany’s blowback against gold manipulation is accelerating. Following yesterday’s report that Bafin took a hard line against precious metals manipulation, after its president Elke Koenig said possible manipulation of precious metals “is worse than the Libor-rigging scandal“, today the response has trickled down to Germany and Europe’s largest bank, Deutsche Bank, which announced that it would withdraw from the appropriately named gold and silver price “fixing”, as European regulators investigate suspected manipulation of precious metals prices by banks. As a reminder, Deutsche is one of five banks involved in the twice-daily gold fix for global price setting and said it was quitting the process after withdrawing from the bulk of its commodities business. The scramble away from gold fixing was certainly assisted by the recent first (of many) manipulation expose in the legacy media, when Bloomberg revealed “How Gold Price Is Manipulated During The “London Fix.” And sure enough, with Germany already very sensitive to the topic of its gold repatriation, and specifically why it is taking so long, it was only a matter of time before any German involvement in gold manipulation escalated to the very top.
“Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business. We remain fully committed to our precious metals business,” it said in a statement.
If you are anxiously awaiting the arrival of the “economic collapse”, just open up your eyes and look at what is happening in Europe. The entire continent is a giant economic mess right now. Unemployment and poverty levels are setting record highs, car sales are setting record lows, and there is an ocean of bad loans and red ink everywhere you look. Over the past several years, most of the attention has been on the economic struggles of Greece, Spain and Portugal and without a doubt things continue to get even worse in those nations. But in 2014 and 2015, Italy and France will start to take center stage. France has the 5th largest economy on the planet, and Italy has the 9th largest economy on the planet, and at this point both of those economies are rapidly falling to pieces. Expect both France and Italy to make major headlines throughout the rest of 2014. I have always maintained that the next major wave of the economic collapse would begin in Europe, and that is exactly what is happening.
The following are just a few of the statistics that show that an “economic collapse” is happening in Europe right now:
There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, or when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything. Luckily, all that changed in the past several years, and it has gotten to the point where even the bastions of “serious”, if 3-5 years delayed, investigation are finally not only asking how is the gold market being manipulated, but are actually providing answers.Such as Bloomberg.
The topic of gold market manipulation during the London AM fix is not new to Zero Hedge: in fact we have discussed both the historical basis and the raison d’etre of the London gold fix, as well as the curious arbitrage available to those who merely traded the AM-PM spread, for years. Which is why we are delighted that none other than Bloomberg has decided to break it down for everyone, as well as summarize all the ways in which just this one facet of gold trading is being manipulated.
Imagine a new “E Class” Mercedes exploding in flames, burning to a cinder. 220 km/hr crashes on the Autobahn are often survived, certainly without a fire.
There is a reason to own a Mercedes, in normal circumstances the chances of dying in one are quite remote unless you are Lady Di or heir to the presidency of Syria or, just perhaps, wrote a scathing expose that dismembered part of one of the greatest drug empires of all time.
“Yes, you got Michael Hastings. We are warned. Lots of journalists are killed each year. Veterans Today loses its share, perhaps a bit more. ”
Back in May 2012, when we were making fun at the latest iteration of the now fatally discredited European stress tests, we took the first of many jabs at the what may currently be the world’s most systematically important, and undercapitalized, bank in the world:
Finally, if anyone is still confused where the pain is headed next, here is a list from Morgan Stanley of all Euro banks with a Core Tier 1 ratio that is so low, that the banks will soon regret not raising more capital in the period of calm that the ECB’s LTRO bought them.
Also, one bank is missing from the list above: Deutsche Bank. CT1/TA: 1.68%. Oops.
That’s right – Deutsche Bank was so bad that it wasn’t even allowed to appear on a screen of Europe’s most undercapitalized banks – and we helpfully pointed out its true capital ratio of just under 2%, and an implied leverage of 60x!
Fast forward 13 months to a Reuters interview with former Kansas City Fed president and FOMC dissenter and sole voice of reason at the Federal Reserve, and current FDIC Vice Chairman Tom Hoenig, who confirmed that once again Zero Hedge was just a year ahead of the curve.
A top U.S. banking regulator called Deutsche Bank’s capital levels “horrible” and said it is the worst on a list of global banks based on one measurement of leverage ratios. “It’s horrible, I mean they’re horribly undercapitalized,” said Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig in an interview. “They have no margin of error.” Deutsche’s leverage ratio stood at 1.63 percent, according to Hoenig’s numbers, which are based on European IFRS accounting rules as of the end of 2012.
In other words, the slighest systemic shock in Europe and Deustche Bank gets it. And as Deutsche Bank goes, so does Germany, so does Europe, so does the world.
Immediately confirming Hoenig’s (and Zero Hedge’s) observations, was Deutsche’s prompt repeat that “all is well” and that “these numbers” are not like “those numbers.”
“To say that we are undercapitalized is inaccurate because if you look at the Basel framework, we’re now one of the best capitalized banks in the world after our capital raise,” Deutsche Bank’s Chief Financial Officer Stefan Krause told Reuters in an interview, when asked about Hoenig’s comments. “To suggest that leverage puts us in a position to be a risk to the system is incorrect,” Krause said, calling the gauge a “misleading measure” when used on its own.
Of course, DB’s lies are perfectly expected – after all it is a question of fiath. So let’s go back to Hoenig who continues to be one of the few voices of reason among the “very serious people”: Continue reading »
Conspiracy theorists claim it is a shadow world government. Former leading members tell the Telegraph it was the most useful meeting they ever went to and it was crucial in forming the European Union. Today, the Bilderberg Group meets in Britain.
“The abuse is terrible,” said Peter Mandelson, leading the walking party through the throng of protesters and carrying the group’s uniform orange ski jacket under his arm.
Amid the din, Peer Steinbruck, the former German Finance Minister, pointedly refused to break off his conversation with Thomas Enders, the head of defence giant EADS. Behind him, Eric Schmidt, the Google chairman, picked up the pace along the narrow road and kept his eyes fixed on the Suvretta hotel ahead. Franco Bernabe, the vice chairman of Rothschild Europe, grinned through the chorus of booing and chanting in German down megaphones, before ducking under the police tape and into the safety of the hotel’s grounds.
It was June 2011. Demonstrations were sweeping through the stricken eurozone, China and North Africa. And in tranquil St Moritz, high in the Swiss alps, half a dozen of the most powerful men in the West had taken a break from a weekend of intensive and strictly confidential debate to walk in the woods, when their paths crossed with the protesters who had come from around the world to keep an eye on them.
The gathering was entirely innocent, the walking party would insist. But what were they doing there?
No such encounters will take place in Watford this week, as the Bilderberg, the annual conference for 140 of the world’s most powerful, meet for four days at The Grove, a £300-a-night golf hotel close to the M25. The entire hotel has been booked out, and a high fence erected around the exclusion zone. Armed checkpoints have been set up on local roads, and locals must show their passports to enter their own driveways. The Home Office may foot the bill. A US news site dedicated to uncovering conspiracies had booked a room for last week but were told by phone not to turn up.
The only thing more ominous for the world than a Hindenburg Omen sighting is a Bilderberg Group meeting. The concentration of politicians and business leaders has meant the organisation, founded at the Bilderberg Hotel near Arnhem in 1954, has faced accusations of secrecy. Meetings take place behind closed doors, with a ban on journalists. We suspect the agenda (how the US and Europe can promote growth, the way ‘big data’ is changing ‘almost everything’, the challenges facing the continent of Africa, and the threat of cyber warfare) has been somewhat re-arranged as market volatility picks up and the status quo begins to quake once again. The annual gathering of the royalty, statesmen, and business leaders, conspiratorially believed to run the world (snubbing their Illuminati peers and Freemason fellows), will take place this week at the Grove Hotel in London, England.
The Telegraph provides the full list of attendees below – for those autogrpah seekers – including Britain’s George Osborne, US’ Henry Kissinger, Peter Sutherland (the chairman of Goldman Sachs), the Fed’s Kevin Warsh, Jeff Bezos?, Peter Thiel, Italy’s Mario Monti, and Spain’s de Guindos.
Bilderberg delegates in full
Chairman: Henri de Castries, Chairman and CEO, AXA Group
Paul M. Achleitner, Chairman of the Supervisory Board, Deutsche Bank AG
Josef Ackermann, Chairman of the Board, Zurich Insurance Group Ltd
The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe… Continue reading »
Moments ago the market jeered the announcement of DB’s 10% equity dilution, promptly followed by cheering its early earnings announcement which was a “beat” on the topline, despite some weakness in sales and trading and an increase in bad debt provisions (which at €354MM on total loans of €399.9 BN net of a tiny €4.863 BN in loan loss allowance will have to go higher. Much higher). Ironically both events are complete noise in the grand scheme of things. Because something far more interesting can be found on page 87 of the company’s 2012 financial report.
The thing in question is the company’s self-reported total gross notional derivative exposure.
And while the vast majority of readers may be left with the impression that JPMorgan’s mindboggling $69.5 trillion in gross notional derivative exposure as of Q4 2012 may be the largest in the world, they would be surprised to learn that that is not the case. In fact, the bank with the single largest derivative exposure is not located in the US at all, but in the heart of Europe, and its name, as some may have guessed by now, is Deutsche Bank. Continue reading »
U.S. Congressional Record February 9, 1917, page 2947
Congressman Calloway announced that the J.P. Morgan interests bought 25 of America’s leading newspapers, and inserted their own editors, in order to control the media.
Mr. CALLAWAY: Mr. Chairman, under unanimous consent, I insert into the Record at this point a statement showing the newspaper combination, which explains their activity in the war matter, just discussed by the gentleman from Pennsylvania [Mr. MOORE]:
“In March, 1915, the J.P. Morgan interests, the steel, ship building and powder interests and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press in the United States.
“These 12 men worked the problems out by selecting 179 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies and other things of national and international nature considered vital to the interests of the purchasers.
“This contract is in existence at the present time, and it accounts for the news columns of the daily press of the country being filled with all sorts of preparedness arguments and misrepresentations as to the present condition of the United States Army and Navy, and the possibility and probability of the United States being attacked by foreign foes.
“This policy also included the suppression of everything in opposition to the wishes of the interests served. The effectiveness of this scheme has been conclusively demonstrated by the character of the stuff carried in the daily press throughout the country since March, 1915. They have resorted to anything necessary to commercialize public sentiment and sandbag the National Congress into making extravagant and wasteful appropriations for the Army and Navy under false pretense that it was necessary. Their stock argument is that it is ‘patriotism.’ They are playing on every prejudice and passion of the American people.”
So FORGET about the Illuminati (the real elitists) and just blame their bankster elite puppets, their government elite puppets (like Obama, Bush, Clinton etc.) and their corporate media presstitutes for everything instead!!!
Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.
You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”
That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.
Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget. Continue reading »
Does a shadowy group of obscenely wealthy elitists control the world? Do men and women with enormous amounts of money really run the world from behind the scenes? The answer might surprise you. Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control. And today we live in a neo-fuedalist system in which the super rich pull all the strings. When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt. That is an amount of money so large that it is almost incomprehensible. Under this ne0-feudalist system, all the rest of us are debt slaves, including our own governments. Just look around – everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier. But the ultra-wealthy don’t just sit on all of that wealth. They use some of it to dominate the affairs of the nations. The ultra-wealthy own virtually every major bank and every major corporation on the planet. They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line. They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO. When you step back and take a look at the big picture, there is little doubt about who runs the world. It is just that most people don’t want to admit the truth.The ultra-wealthy don’t run down and put their money in the local bank like you and I do. Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars. Continue reading »
While little has been said in the mainstream western press about the ongoing fiasco surrounding Siena’s Banca Monte dei Pasci, Italy’s third largest bank and the world’s oldest which may get its third bailout in three years- or even be nationalized – as soon as today, for fears that it may break the thin veneer of “recovery” in the European financial system, the situation on the ground in Italy is getting more serious by the minute, and will have implications on both next month’s general election, on Mario Monti, on Silvio Berlusconi, on frontrunner for the Prime Minister post Pier Luigi Bersani, and reach as far up as the head of the ECB – Mario Draghi.Several hours ago, on Saturday morning, the four-member board of the Bank of Italy – this time without its prior president Mario Draghi – met to consider the position of scandal-hit bank Monte dei Paschi di Siena and decide whether to authorize its request for 3.9 billion euros ($5.3 billion) of state loans.
The name Christian Bittar is well-known to regular Zero Hedge readers. Recall from “Deep Into The Lieborgate Rabbit Hole: The Swiss Hedge Fund Link?”: ” just like in the case of Barclays (with Diamond), JPM (with Bruno Iksil), UBS (with Kweku) and Goldman (with Fabrice Tourre), there always is a scapegoat. Today we find just who that scapegoat is. From Bloomberg: “Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is ongoing.” We proceeded to do a circuitous analysis to find that despite assumptions to the contrary, not only has Mr. Bittar not been expelled from the industry for manipulating Libor, but he is still collecting fat paychecks at Swiss hedge fund BlueCrest, Europe’s third largest, with some $30 billion under management. Today, courtesy of Bloomberg we get the details of how Mr. Bittar departed Deutsche, and just what his responsibilities there were.
First, there were those who said manipulating Libor was at best a mere trifle, generating scrap in terms of profits. Wrong.
Bittar, who joined Deutsche Bank in 2001, was a proprietary trader specializing in short-term derivatives contracts and entitled to a percentage of the profit from his trades, the people said. He took billion-euro positions on the direction of short-term interest rates with the firm’s own money and reaped hundreds of millions of euros in profit for the bank, the people said. The bonuses Deutsche Bank pays its staff typically vest over a three-year period.