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 »
On Tuesday two weeks ago, in homes and offices all over the world, something very strange started to happen. Without any warning, tens of thousands of printers suddenly stopped working.
Bewildering error messages appeared that stated that there was a ‘cartridge problem’, or an ‘older generation cartridge’ was present, or more puzzling still, that ‘one or more cartridges are missing or damaged’.
Users were perplexed, and more than a little frustrated. The cartridges in their printers were neither missing, nor damaged, nor indeed old (although they were, of course, expensive), and yet still the troublesome error messages popped up.
So what had happened? Within a few hours, it quickly became clear that the source of the mystery lay in the fact that all the printers were manufactured by the same company — Hewlett-Packard, or HP. More specifically, the models in question all came from the OfficeJet, OfficeJet Pro and OfficeJet Pro X ranges, which cost anywhere between £70 and several hundred pounds.
Unbeknown to the thousands of unsuspecting users around the world, HP had secretly installed the technological equivalent of a time-bomb in their printers, which effectively rendered them useless if their owners had installed cartridges which were not made by HP.
H/t reader kevin a.
* * *
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 »
Chinese billionaire Wang Jianlin, whose vast property and entertainment empire reportedly brought in $44 billion in revenue last year, appeared on CNN Wednesday to warn about what lies ahead for the country’s overheated real-estate market.
It’s the biggest bubble in history… I don’t see a good solution to this problem. The government has come up with all sorts of measures — limiting purchase or credit — but none have worked.
Jianlin pointed to the troubling fact that real estate prices just keep rising in the major cities, like Shanghai and Beijing, while falling across the rest of the country, where smaller cities are littered by properties that lie vacant. 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.
* * *
“Bad choice. I prefer the late Frank Zappa’s “THE MOTHERS OF INVENTION”…”
The “most systemically dangerous bank in the world” is in grave trouble. Despite exclamations that there is “no need for additional capital” and that “Deutsche Bank is no Lehman” investors are fleeing the bank’s assets en masse as professionals pile in to buy counterparty risk protection. With the only thing standing between bank runs and stability being the confidence of depositors, and knowing full well that everybody lies when it gets serious, one witty trader noted, “if it walks like Lehman, and talks like Lehman… it is Lehman.”
* * *
Loss-making airline Air Berlin is set to reduce its fleet by half and cut 1000 jobs by the end of 2016, German newspaper Sueddeutsche Zeitung reports.
The airline, which struggles to post profits due to tough competition in the industry and the delayed opening of Berlin Brandenburg Airport, plans to reduce its fleet to about 70 aircraft and cut 1000 of its 8600 jobs, the report said.
The Munich-based newspaper cited industry sources as saying Air Berlin’s biggest shareholder, Etihad Airways, was in talks with Lufthansa and travel company TUI over disposing of unwanted parts of the troubled airline. Continue reading »
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.
* * *
Eat your heart out, Al Gore. Being a carbon billionaire is so passé now that we’re in the age of the $100 trillion climate swindle. So the real question is who (or at least which corporate front) will be the first carbon trillionaire? Will it be a carbon eugenics promoting Rockefeller or a global government promoting Rothschild, or a carbon divesting Saudi government, or one of the shady hedge funds that are spearheading weather derivatives and other Enron-developed financial instruments to try to cash in on the carbon fraud?
Whatever the answer, one thing is for certain: you won’t see this question asked (let alone answered) in the establishment gatekeeping press. Instead you will see endless iterations of the accusation that anyone who disbelieves in the woo woo pseudoscience of climate catastrophism is funded by the very Big Oil oiligarchs who stand to benefit from the debunked climate scare. Continue reading »
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 »
Are you ready for the most anticipated presidential debate in decades? It is being projected that Monday’s debate between Donald Trump and Hillary Clinton could potentially break the all-time record of 80 million viewers that watched Ronald Reagan and Jimmy Carter debate back in 1980. Many Americans probably hope to see some personal fireworks between the two nominees, but the two candidates have both expressed a desire to focus on substantive issues. There will likely be quite a few questions about the economy, and without a doubt this is an area where Trump and Clinton have some very sharp differences. The mainstream media would have us believe that the U.S. economy is in pretty good shape, and if that was true that would seem to favor Clinton. But is it actually true?
The following are 26 incredible facts about the economy that every American should know for the Trump-Clinton debate… 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 »
JAPAN has reacted with alarm after China surged 40 fighters and bombers past its islands during a drill designed to test their ability to enforce a controversial ‘air defence zone’.
China’s People’s Liberation Army Air Force (PLAAF) sent nuclear-capable H-6K bombers, Su-30 heavy fighters, radar and tanker aircraft through the Miyako Strait in the East China Sea on Sunday.
Beijing says it was part of a “routine drill … in accordance with the needs of the Air Force to defend national sovereignty and security, as well as to maintain peaceful development.” Continue reading »