Deutsche Bank - Is it going to collapse?

Autonomous Cowherd

There seems to be a lot of uncertainty about Deutsche bank. The people at the bank say the uncertainty is being exaggerated and ...yet...the share price drops and drops. If Deutsche bank gets a bail out from state, it is likely to play out badly for Merkel. If the bank collapses, it is likely to be the first of many, creating a domino effect with Italian banks for example. I am a complete amateur in the field of International finance, but having studied up recently (by watching The Big Short ) I am surprised there is not more media coverage of this possible event. It could be pretty nasty if it all slips away.

Here are a few examples of the various sources I have been reading, from the stiff suits to the weirdos.

http://www.irishtimes.com/business/financial-services/deutsche-bank-crisis-threatens-meltdown-beyond-german-borders-1.2811798





http://www.telegraph.co.uk/business/2016/09/29/deutsche-bank-under-pressure-as-hedge-funds-cut-exposure/

http://www.marketwatch.com/story/angela-merkel-has-bungled-the-deutsche-bank-crisis-like-everything-else-2016-09-30


https://steemit.com/money/@dollarvigilante/deutsche-bank-hangs-by-a-thread-on-eve-of-jubilee



I am interested in what people think about this. And in learning more. Thanks.

Big C

For the treatment I/we got from NIB I won't shed any tears for this shower of Sh**s

jimmy blevins

I wonder where this fits in the EU establisment narrative that the feckless "pigs" brought financial doom on themselves.

the dark phantom

George Soros took his money out of DB months ago so its been on the cards a while.

ollaetta

Big C wrote: »

For the treatment I/we got from NIB I won't shed any tears for this shower of Sh**s

Maybe I'm missing something but NIB customers got shafted by Danske Bank.

Autonomous Cowherd

Big C wrote: »

For the treatment I/we got from NIB I won't shed any tears for this shower of Sh**s

I can empathise. Good that you sstill have your sense of humour.

But if it does sink it will mean some other great financial pit for all of us. And it is always the ''little people'' who pay for these things. I think the whole money game is beyond ridiculous at this stage.

everlast75

is it not a case of a self fulfilling prophecy?

enough media groups report it (regardless of whether it is true or not) and it has the effect of spooking the stock market.. which causes a collapse

Autonomous Cowherd

everlast75 wrote: »

is it not a case of a self fulfilling prophecy?

enough media groups report it (regardless of whether it is true or not) and it has the effect of spooking the stock market.. which causes a collapse

Yes, I was thinking that too. Though there does seem to be genuine problems at the heart of the bank itself.

Son Of A Vidic

Autonomous Cowherd wrote: »

Deutsche Bank - Is it going to collapse

Maybe they'll come to us for another bail out, since we're pretty good at covering the sins of others and bailing out corrupt, scumbag banks.

josip

Son Of A Vidic wrote: »

Maybe they'll come to us for another bail out, since we're pretty good at covering the sins of others and bailing out corrupt, scumbag banks.

They'll probably borrow from the Greek National Bank.

oppenheimer1

Autonomous Cowherd wrote: »

There seems to be a lot of uncertainty about Deutsche bank. The people at the bank say the uncertainty is being exaggerated and ...yet...the share price drops and drops. If Deutsche bank gets a bail out from state, it is likely to play out badly for Merkel. If the bank collapses, it is likely to be the first of many, creating a domino effect with Italian banks for example. I am a complete amateur in the field of International finance, but having studied up recently (by watching The Big Short ) I am surprised there is not more media coverage of this possible event. It could be pretty nasty if it all slips away.

Here are a few examples of the various sources I have been reading, from the stiff suits to the weirdos.

http://www.irishtimes.com/business/financial-services/deutsche-bank-crisis-threatens-meltdown-beyond-german-borders-1.2811798





http://www.telegraph.co.uk/business/2016/09/29/deutsche-bank-under-pressure-as-hedge-funds-cut-exposure/

http://www.marketwatch.com/story/angela-merkel-has-bungled-the-deutsche-bank-crisis-like-everything-else-2016-09-30


https://steemit.com/money/@dollarvigilante/deutsche-bank-hangs-by-a-thread-on-eve-of-jubilee



I am interested in what people think about this. And in learning more. Thanks.

Deutsche Bank will be bought out, merged or bailed out. The institution won't be let collapse because it would trigger another financial crisis.

If Lehman was saved there would have been time to unwind the other banks positions. This probably would have led to long stagnant period, instead of a sharp deep recession.

Ted111

I don't have your money. It's in...It's in Tom's house. And in George Soros' house.

SEPT 23 1989

It will take Europe down with it

your move Herr Merkel

Autonomous Cowherd

oppenheimer1 wrote: »

Deutsche Bank will be bought out, merged or bailed out. The institution won't be let collapse because it would trigger another financial crisis.

If Lehman was saved there would have been time to unwind the other banks positions. This probably would have led to long stagnant period, instead of a sharp deep recession.

Interesting. Thanks

Autonomous Cowherd

Letter today from John Cryan, CEO of Deutsche Bank, to employees...

Dear Colleagues,

You will have seen speculation in the media that a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns. We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients.

I understand if you feel concerned by the extensive coverage on this issue. Our bank has become subject to speculation. Ongoing rumors are causing significant swings in our stock price.

It is our task now to prevent distorted perception from further interrupting our daily business. Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.

Deutsche Bank has strong fundamentals. Let me mention some of the most important facts at this point:

1. We fulfill all current capital requirements and our restructuring is well on track. We completed the disposal of the British insurer Abbey Life this week and the sale of our stake in the Chinese Hua Xia Bank will be finalized soon. This will further improve our capital ratio.

2. We have significantly decreased our market and credit risk in recent years. At no point in the last two decades has the balance sheet of Deutsche Bank been as stable as it is today.

3. Despite low interest rates and a difficult environment we posted a pre-tax profit of about 1 billion euros in the first half of 2016. Before extraordinary items like restructuring costs, we earned about 1.7 billion euros. This demonstrates the operating strength of Deutsche Bank.

4. In a situation like this, the most important factor is our liquidity reserves. Currently they still amount to more than 215 billion euros. This is an extremely comfortable buffer. This is clear proof of how conservatively we have planned. This is acknowledged by numerous banking analysts.

There is therefore no basis for this speculation. Nor can uncertainty about the outcome of our litigation cases in the US explain this pressure on our stock price, if we take the settlements of our peers as a benchmark.

You have all done a tremendous job over the past few days. You are the ones who are in constant contact with our clients and making it clear how Deutsche Bank is really doing. You are Deutsche Bank – that is impressively clear. All of us in the Management Board highly appreciate it.

You will hear back from me soon. Please keep working as you have been doing so far. We are and we remain a strong Deutsche Bank.

Yours sincerely,

John Cryan

I bolded one sentence. Why would some market forces seek to damage trust?

Cheerful Spring

Its 4th largest bank in the world, for it to fail it would cause a severe economic crisis for all of us. Would be worse then 2008?

The German Government will have to step in if they think its about to fail surely?

Sabre Man

Autonomous Cowherd wrote: »

Letter today from John Cryan, CEO of Deutsche Bank, to employees...


I bolded one sentence. Why would some market forces seek to damage trust?

They may have shorted the stock.

Ted111

The bank will fight to the last man and the last bullet.
Retreat is forbidden.

Dohnjoe

Cheerful Spring wrote: »

Its 4th largest bank in the world, for it to fail it would cause a severe economic crisis for all of us. Would be worse then 2008?

The German Government will have to step in if they think its about to fail surely?

The Lehman collapse happened as a result of and during a period of extreme systemic shock (2006/2007)

Deutsche is in a healthier position than Lehman in a relatively more stable global situation

If Deutsche starts to slip it has more tools at it's disposal, and likewise the DE gov has tools it can use to aid the bank

Autonomous Cowherd

Dohnjoe wrote: »

The Lehman collapse happened as a result of and during a period of extreme systemic shock (2006/2007)

Deutsche is in a healthier position than Lehman in a relatively more stable global situation

If Deutsche starts to slip it has more tools at it's disposal, and likewise the DE gov has tools it can use to aid the bank

Yes, I saw 2 graphs on a site that show underlying situation (in US market at least) is different than 2008

http://news.goldseek.com/ClifDroke/1473361500.php
http://goldseek.com/news/ClifDroke/2016/9-8cd/hilmo1.jpg
and this years graph
http://goldseek.com/news/ClifDroke/2016/9-8cd/hilmo2.jpg

I have also seen however that Merkel would not bail it out. So, it would be something else then. I suppose we shall know more over next week or so.

http://fortune.com/2016/09/29/deutsche-bank-germany-bailout/

blackwhite

Big C wrote: »

For the treatment I/we got from NIB I won't shed any tears for this shower of Sh**s

NIB was taken over by Danske Bank, not Deutsche Bank.

skywanderer

Deutsch Bank has a $72 TRILLION exposure, it cannot be saved nor should it, Lehman Brothers was rightly left collapse and Deutsch Bank must be left collapse too. The only way out of this will be to bring back the Gold Standard and forget FIAT currency.

Smart investors hoard Gold, Canned Food, Guns and lots of Ammunition.

Autonomous Cowherd

skywanderer wrote: »

Deutsch Bank has a $72 TRILLION exposure, it cannot be saved nor should it, Lehman Brothers was rightly left collapse and Deutsch Bank must be left collapse too. The only way out of this will be to bring back the Gold Standard and forget FIAT currency.

Smart investors hoard Gold, Canned Food, Guns and lots of Ammunition.

I agree it should not be saved.
As for guns, I went the self-sufficiency route 25 years ago. But any conversation that starts out with ''What would you do if the **** hits the fan?'' rapidly convenes on the need for guns if people are being truthful, and that is a psychological leap I seem incapable of taking. I LOVE the Walking Dead (to my immense surprise!) but if things took a bad turn in truth I would rather die early and fast.

mzungu

Autonomous Cowherd wrote: »

Letter today from John Cryan, CEO of Deutsche Bank, to employees...

In other words, the ship is sinking, yo.

cbyrd

skywanderer wrote:

Deutsch Bank has a $72 TRILLION exposure, it cannot be saved nor should it, Lehman Brothers was rightly left collapse and Deutsch Bank must be left collapse too. The only way out of this will be to bring back the Gold Standard and forget FIAT currency.

I'm banking on that.. well staying away from banks and buying silver.. I'll be minted if this happens
There's a few countries now starting to push to bring back the gold standard.. paper currency is not worth the paper it's printed on. There's nothing to back it up, just numbers on a computer.

HensVassal

oppenheimer1 wrote: »

Deutsche Bank will be bought out, merged or bailed out. The institution won't be let collapse because it would trigger another financial crisis.

If Lehman was saved there would have been time to unwind the other banks positions. This probably would have led to long stagnant period, instead of a sharp deep recession.

Are you for real? What makes you think the powers that be would want to avoid a financial crisis? It's the most effective tool in slashing funding for public programs, raising taxes and putting all that money into private hands. That's how it works. Crash the economy, drive asset prices down so they can be snapped up by private funds at fire sale prices, gut social programs because the primes will say "well you know, we all have to tighten our belts" rinse..repeat.

donegaLroad

lots of the money has been transfered to Switzerland and Lichtenstein (Im just guessing)

seamus

SEPT 23 1989 wrote: »

It will take Europe down with it
your move Herr Merkel

Neh, doubtful. At worst it might cut off its US arm and tell the US government to go sing for its $14bn - isolate the bank from that loss.

The EU is not going to give Deutsch bailout money so it can be sent to the United States.

skywanderer wrote: »

Deutsch Bank has a $72 TRILLION exposure

Are you sure about that? That would be close to the entire output of the world n a year. If Deutsch went down, everything goes down with it.

Smart investors hoard Gold, Canned Food, Guns and lots of Ammunition.

Sure they do. Don't the richest 100 people in the world all run Gold & Tuna & Guns & Ammo conglomerates.

HensVassal

HSBC is in no fit state either.

Tabnabs

donegaLroad wrote: »

lots of the money has been transfered to Switzerland and Lichtenstein (Im just guessing)

Lots of money flowing into Irish banks I've been reliably informed. Kind of makes me want to speak a little German - Schadenfreude

Boom_Bap

Autonomous Cowherd wrote: »

Letter today from John Cryan, CEO of Deutsche Bank, to employees...


I bolded one sentence. Why would some market forces seek to damage trust?

The lads have been watching Star Wars too much and actually believe in The Force.

Dohnjoe

skywanderer wrote: »

Deutsch Bank has a $72 TRILLION exposure, it cannot be saved nor should it

Deutsche isn't 72 trillion in exposure, not here on planet earth anyway. The large fine ($14 bn) to settle claims over mortgage securities from the 2007/2008 crisis has caused uncertainty, that uncertainty coupled with DB issues meant that it's share price has slipped (started to rebound just in the last few hours). Recently it's been rumoured that the fine will be dropped to at least $5.4 bn

mahoganygas

Autonomous Cowherd wrote:

I bolded one sentence. Why would some market forces seek to damage trust?

Hedge funds have shorted Deutsche Bank stock. Rumours of a collapse increases the value of their positions. The collapse doesn't even need to happen, just enough sentiment to spook the market and drive the stock price down. Hedge funds can then cash out and pocket the difference.

Interestingly, a complete collapse of DB would be detrimental to most hedge funds.

HensVassal

Autonomous Cowherd wrote: »

I agree it should not be saved.
As for guns, I went the self-sufficiency route 25 years ago. But any conversation that starts out with ''What would you do if the **** hits the fan?'' rapidly convenes on the need for guns if people are being truthful, and that is a psychological leap I seem incapable of taking. I LOVE the Walking Dead (to my immense surprise!) but if things took a bad turn in truth I would rather die early and fast.

Things will never go "mad max" and do you want to know why? How can you profit if you can't keep the masses in debt peonage? It's just never going to happen. Oil will rise or fall, gold will rise or fall, taxes will rise, pensions will be purloined, water will be privatized, yada yada, but the structure whereby the "bottom" funds the "top" will never be endangered.

Autonomous Cowherd

HensVassal wrote: »

Things will never go "mad max" and do you want to know why? How can you profit if you can't keep the masses in debt peonage? It's just never going to happen. Oil will rise or fall, gold will rise or fall, taxes will rise, pensions will be purloined, water will be privatized, yada yada, but the structure whereby the "bottom" funds the "top" will never be endangered.

That's a comfort Our enslavement keeps us safe from our annihilation. There's a meme in that.

Autonomous Cowherd

Here's a comment from Zerohedge. Most likely completely false, but still, it has the makings of a good movie script which might one day, a very long time from now, be revealed as fact.

Just a little inside information from behind the curtain. When Britain voted to Brexit a number of threats were made by German and French politicians about "teaching Britain a lesson". A meeting was held in the City at the headquarters of HSBC on July the 28th, it involved a number of high level City bankers including Lord Rothschild, Lord Sassoon and the meeting was chaired by Douglas Flint. It was decided at the meeting to ensure that London retained its position as the World and especially European financial capital. In order to ensure that Europe couldn't pressure or threaten the UK the agreed strategy was to put the skids under DB by withdrawing liquidity and ensuring that bad press was widely communicated. Once DB fails Europe will have to swallow their pride and rely on London for all their clearing facilities. Game set and match. European politicians are about to learn what happens to people or countries who threaten the City. The reason I know this is because my cousin is executive PA to one of the attendees and she was tasked with taking the minutes.

Dohnjoe

Autonomous Cowherd wrote: »

Here's a comment from Zerohedge. Most likely completely false, but still, it has the makings of a good movie script which might one day, a very long time from now, be revealed as fact.

Zerohedge is the Infowars of financial "news". Both have tapped into niche, but lucrative markets

Dohnjoe

HensVassal wrote: »

That's how it works. Crash the economy, drive asset prices down so they can be snapped up by private funds at fire sale prices, gut social programs because the primes will say "well you know, we all have to tighten our belts" rinse..repeat.

Intriguing, are you suggesting politicians deliberately caused the crash, who exactly and how was it done?

the dark phantom

Dohnjoe wrote: »

Intriguing, are you suggesting politicians deliberately caused the crash, who exactly and how was it done?

Politicians don't control banking. But bankers control politics.

ablelocks

we need Aonghus Von Bismarcks' insightful commentary to enlighten us...doesn't he operate in the Deutschen Finanzdienstleistungen

suicide_circus

I don't see the german public taking on this debt in the way us poor plebs did

Capt'n Midnight

seamus wrote: »

Are you sure about that? That would be close to the entire output of the world n a year. If Deutsch went down, everything goes down with it.

https://xkcd.com/980/

The options market is scary. But at the end of the day you don't loose more than you invest unless you bet the price goes down and even then someone else ends up with those assets.

Compared to that the derivatives market is just insane. There is no guarantee that anyone will be left with an asset. AFAIK There is no guarantee that the loses won't be more than the initial value of the assets.



https://deutsche-boerse.com/blob/2534548/ebd7dc9b7aeac3efdf0c273309093130/data/the-global-derivatives-market-0909_de.pdf

the derivatives market has certainly been affected
by and has played a role in the recent market turbulences. This was inevitable for two main reasons:
first, its sheer size with €471 trillion in notional
amount outstanding and a gross market value of
€24 trillion as of December 2008; and second,
the relevance of derivatives for the global financial
system.

take everything

skywanderer wrote: »

Deutsch Bank has a $72 TRILLION exposure, it cannot be saved nor should it, Lehman Brothers was rightly left collapse and Deutsch Bank must be left collapse too. The only way out of this will be to bring back the Gold Standard and forget FIAT currency.

Smart investors hoard Gold, Canned Food, Guns and lots of Ammunition.

Not questioning you but how could a bank have 72 trillion exposure.
Is this in stuff like credit default swaps

tomwaterford

I blame angous and his band of ninjas :pac:

Guy:Incognito

God Bless Lord Sassoon. All the way from cutting hair to running the world.

Dohnjoe

the dark phantom wrote: »

Politicians don't control banking. But bankers control politics.

During the crisis, the Fed and treasury largely dictated the terms. Many politicians were strongly against bailouts, they even crossed party lines to sabotage initial votes for e.g. TARP.. it's only when the crisis went beyond Wall Street and started threatening main street.. that politicians acted in a bipartisan way, they are far more scared of their voters (who were on the brink of losing more jobs, savings, etc) than the floundering banks

Many politicians are smart enough to see that a healthy banking system is good for the economy, banks know this, but when the **** hits the fan, they become quite powerless in the face of panic and full runs. Lehmans tried and failed. Welmu, New Century, Bear Stearns, Countrywide - basically sold for a fraction of their worth. AIG was forced to take harsh terms and the CEO was axed, like thousands of high level bankers during the crisis. Even the stronger banks had to go hand-in-cap to investors like Warren Buffet to keep them afloat

Banks are still paying record fines. Frank-Dodd easily passed much to the protests of Wall St. Regulators have reformed, tightened up. Were forced to pay huge interest on bailout funds during the crisis (TARP managed to return a profit to the taxpayer)

Indeed banks like any large companies have influence, but when their risky actions are part of a full systemic crisis affecting people's jobs, mortgages, pensions, the wider economy, the global economy.. yup, they lose that influence pretty quickly, and due to huge public anger few dare to get on their side.. especially politicians

Giacomo McGubbin

Lets see if ordinary German taxpayers and their children's children are made to pay off the private debts of German billionaires and bondholders.

Dohnjoe

Capt'n Midnight wrote: »

Compared to that the derivatives market is just insane.

About the worth of the derivatives market.

I don't know if this is a good analogy but I'll try (someone else who is far more knowledgeable can correct me) If you a put a 10 euro bet on a 300 to 1 horse, that's 3000 euros potential outcome

If you take the potential max outcome of all the bets in the world on everything, you'll come up with a fantastically high figure. The real money that changes hands is just a fraction of that.

Derivatives is roughly the same thing. A certain way of calculating makes it look far bigger than the realistic size of the market.

skywanderer

Giacomo McGubbin wrote: »

Lets see if ordinary German taxpayers and their children's children are made to pay off the private debts of German billionaires and bondholders.

The last time they tried doing that it didn't go too well in Germany with the Weimar Republic and the rise of the far-left and Adolf Hitlers National Socialism.

Dohnjoe

Giacomo McGubbin wrote: »

Lets see if ordinary German taxpayers and their children's children are made to pay off the private debts of German billionaires and bondholders.

To offer an alternative view, it's likely ordinary German taxpayers would suffer more if the bank went down (it's a very large one). It would prob drag a few smaller banks with it, create a domestic banking crisis (in Germany) and negatively affect the system in Europe

That would affect the economy of Germany and of Europe negatively. Jobs, pensions, housing, etc.

Giacomo McGubbin

Dohnjoe wrote: »

To offer an alternative view, it's likely ordinary German taxpayers would suffer more if the bank went down (it's a very large one). It would prob drag a few smaller banks with it, create a domestic banking crisis (in Germany) and negatively affect the system in Europe

That would affect the economy of Germany and of Europe negatively. Jobs, pensions, housing, etc.

You can offer whatever you like, lets see now if the ordinary Germans and their children's children are forced in the same way to pay the private speculation debts of German billionaires and bondholders, while they remain as wealthy as ever.