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At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)
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.
The amount in question? €55,605,039,000,000. Which, converted into USD at the current EURUSD exchange rate amounts to $72,842,601,090,000.... Or roughly $2 trillion more than JPMorgan's.
The good news for Deutsche Bank's accountants and shareholders, and for Germany's spinmasters, is that through the magic of netting, this number collapses into €776.7 billion in positive market value exposure (assets), and €756.4 billion in negative market value exposure (liabilities), both of which are the single largest asset and liability line item in the firm's €2 trillion balance sheet mind you, and subsequently collapses even further into a "tidy little package" number of just €20.3.
Of course, this works in theory, however in practice the theory falls apart the second there is discontinuity in the collateral chain as we have shown repeatedly in thh past, and not only does the €20.3 billion number promptly cease to represent anything real, but the netted derivative exposure even promptlier become the gross number, somewhere north of $70 trillion.
Which, of course, is the primary reason why Germany, theatrically kicking and screaming for the past four years, has done everything in its power, even "yielding" to the ECB, to make sure there is no domino-like collapse of European banks, which would most certainly precipitate just the kind of collateral chain breakage and net-to-gross conversion that is what causes Anshu Jain, and every other bank CEO, to wake up drenched in sweat every night.
Finally, just to keep it all in perspective, below is a chart showing Germany's GDP compared to Deutsche Bank's total derivative exposure. If nothing else, it should make clear, once and for all, just who is truly calling the Mutually Assured Destruction shots in Europe.
But don't worry, this €56 trillion in exposure, should everything go really, really bad is backed by the more than equitable €575.2 billion in deposits, or just 100 times less. Of course, a slighly more aggresive than normal bail-in may be required in case DB itself has to followin the footsteps of Cyprus...
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Wowzers!
(btw, your graphs say billions instead of trillions but I understand its all play money anyhow)
We are so fucked...........
https://www.youtube.com/watch?v=fyklt01lN_I
DB is one of those 99 red ballons running out of helium and flying right over a cactus patch.....
No..no..no. You just don't convert to USD and this didn't happen.
Uber Alles!!!
What's a few trillion among the friends.
As I expounded a few days ago, the douche sheeple are mesmerized with the UEFA champions league and are completely oblivious to news like this.
Expect a real SHTF after the UEFA cup finals late may in Wembley.
A 10000 episode Spanish soap opera is scheduled to start at the end of UEFA cup, so the waking up of the sheeple will be postponed for another 146 years.
Bilateral netting FTW !!!
You pick me up, then I'll pick you up. As long as neither of us lets go, we should hover 150' off the ground just fine.
Huh?
<smokes fat doobie>
Oh yeah, that will work! Pass the doritos.
pods
It's cartoon gravity rules. This is what allows Bugs Bunny to jump out of a freefalling elevator when it's a foot off the ground and escape injury.
fortunately, the bar on the left represents the *notional* GDP, which is significantly larger than the *actual* GDP
Keep strokin' the bishop... A big surprise awaits at the end...
Take heart .. just two of our provincial too big to prosecute wise guys.. BOA and JPM.. together, exceed our Teutonic good bud's phony books.
Bankers....industrious little termites ain't they?
Bankers....insidious little termites ain't they?
Fixed it for you.
...is what causes Anshu Jain, and every other bank CEO, to wake up drenched in sweat every night.
Silly Tyler! They wake up drenched in sweat from all the hookers and blow.
LOL. Like THEY could care less about derivatives, nett (or gross). Their homeys at the CB's have got their backs, to infinity AND beyond.
They have the best accountants money can bribe.
Not much.
http://www.youtube.com/watch?v=_rRqeJcuK-A&feature=player_embedded
I hate exposure...it's so....transparent.
Counterparty risk? Nonsense....
http://www.youtube.com/watch?v=PozbCdtvixQ
BOOM
$20.30 ...Just one yuppie foodstamp and 30 cents change.
Not bad in the collapsible world of notional derivative vortexes.
Even David Copperfield couldn't beat that illusion
Sorry, I thought you said $20.30...
Hold on, you did, well $20.3....
But point still stands...
Now you know why Banks OWN the Government and not the other way around.
And thats why he's richer than you.
He didn't get that rich himself.
...maniacal laughter... you are oh so right about that one, dude, and you don't even know it... and I don't mean you as in response, I mean you as the guy who'd originally said it and has no clue whatthefuck is going on...
It realy sucks that JP Morgan-Chase-Rockefeller-Rothschild or Citi did not beat D Bank. America needs to be #1 again.
USA USA USA!
As I type, the boyz and girlz downtown are tweaking spreadsheets to retake the crown.
Yes We Can!
Without proper oversight or an ethical framework...
In fact I bet a lot of the DB derivatives were created by team they got with the Morgan Grenfell aquisition - and MG most certainly were part of the Morgan family of banks.
Morgan boys with an English accent. They are all Satan's spawn.
indeed - and guess what....once they got access to the DB ballance sheet, they multiplied themselves like fractional reserve bastards.
Thank God they can raise $2,8 Billion to cover this.....oh wait....
Well, now we know why the share offering.
Im guessing more than a few loans went bad..
The money for the majority of shares will indirectly come from the FED. Like I said, they have to keep monetizing the puppets in Euroland or they're finished. German banks need bailouts just as much as the cyprus banks. All the worlds keynesian welfare states are failing together. That includes the US.
'80's pop reference. Awesome...
LOL! I kinda of laughed and thought - oh a bullshit one hit wonder song translated from German to English that became a hit. Well old Nena or who ever wrote the song may have nailed it.
Talks about war, destruction, jet fighters (or could be drones with O-muslim). It talks about devastation - must be the Greece and Cyprus parts.
Maybe it is about a European war when the banks, euro and hopefully the EUSSR blow up.
Europe needs more lamp posts, rope and people with balls to put criminals in those nooses. America sure as hell does not ahve people with those guts.
"99 Red Balloons" You and I, and a little toy shopBuy a bag of balloons with the money (euros - fiat - bitcoins) we've got
Set them free at the break of dawn
'Til one by one, they were gone
Back at base, bugs in the software
Flash the message, "Some thing's out there"
Floating in the summer sky
Ninety-nine red balloons go by
Ninety-nine red balloons
Floating in the summer sky
Panic lads, it's a red alert
There's something here from somewhere else
The war machine springs to life
Opens up one eager eye
Focusing it on the sky
Ninety-nine red balloons go by
Ninety-nine Decision Street
Ninety-nine ministers meet
To worry, worry, super-scurry
Call the troops out in a hurry
This is what we've waiting for
This is it boys, this is war
The President is on the line
As ninety-nine red balloons go by
Ninety-nine knights of the air
Riding super high-tech jet fighters
Everyone's a super hero
Everyone's a Captain Kirk
With orders to identify, to clarify and classify (rehypothicate)
Scrambling in the summer sky
As ninety-nine red balloons go by
Ninety-nine red balloons go by
Ninety-nine dreams I have had
Every one a red balloon
Now it's all over and I'm standin' pretty
In this dust that was a city
If I could find a souvenir
Just to prove the world was here
And here is a red balloon
I think of you and let it go
"if looks could kill they proably will." it's easy to look at something and say "that guy did that" but in fact it could be just an algorithm "and nobody's the wiser." tough to do with poetry though...by definition "it doesn't make sense." thanks fer sharin'....
99 Düsenjäger
Jeder war ein großer Krieger
Hielten sich für Captain Kirk
Das gab ein großes Feuerwerk
Die Nachbarn haben nichts gerafft
Und fühlten sich gleich angemacht
Dabei schoss man am Horizont
Auf 99 Luftballons
99 Kriegsminister -
Streichholz und Benzinkanister -
Hielten sich für schlaue Leute
Witterten schon fette Beute
Riefen Krieg und wollten Macht
Mann, wer hätte das gedacht
Dass es einmal soweit kommt
Wegen 99 Luftballons
rough translation(my german is shitty and google translate is a bitch with lyrics apparently)
the captain kirk part you got but, but the second part is: the neighbors have reaped nothing, so feel yourself made equal all because of 99 little balloons.
next verse:
99 ministers of war, with matches and gas canisters, hail to the clever people(sarcastic), whove caught wind of a fat catch, they called for war and wanted power, man who would have thought, all because of 99 little ballons.
wish i had the one i worked out before, sounded way better, and was a more direct translation.
they had to clean it up for americans. http://www.youtube.com/watch?v=Lur-SGl3uw8
99 ministers of war, with matches and gas canisters, hail to the clever people(sarcastic), whove caught wind of a fat catch, they called for war and wanted power,
For a pop song this was suprisingly good. This was circa 1980. Boy Europe has really been F over since 1980.
Just change it to 99 EU(SSR) ministers with the banksters who want to F over all Europeans. . Hail to the banksters with their fiat and derivatives.
99 QQQQQQQQQQQQ Luftballons
Seens like just a couple years ago Reggie Middleton was drawing a bullseye on DB, but only a few paid him any attention as zombie banks may be dead on paper, but the people of Cyprus and others have been enslaved to ensure those derivatives remain money good. Heck, DB is up 4.6% on the day as I write this. Go figure.
Deutsche Bank über alles, especially when it comes to collapse potential
99 Red Euros float buy.
I think its an accounting "error", "mistake", "misplacement".. Its actually probaby MUCH bigger then that..
How did you get to 'we', grasshopper?
The trillions graph is still at the printer. There's a backlog due to another customer print order. Customer name is Bernanke.
A trillion here and a trillion there.. before you know it-it adds up to some real money..
What could go wrong?.........
The word "everything"'comes to mind. Of course "if it's just a game"...in the wrong hands it could...
I'll bet Bill Gross will have this framed and hung in his panic room, with full stocked bar, exercise bike and Au stash.
What could possibly be going through his mind? So close to this evil, yet seemingly not of it.
I know Kyle would like to short DB, but who would be left to pay out when it hit?
Kriegsführung.
Time for the macarena dance...
The confusion probably comes from the fact that Germans use the word Milliarden instead of Billion and the word Billionen translates to Trillion in English.
the big red dildo of pain just keeps getting bigger and one day somebody will have to bend over and pay the bill, sure hope its dick cheney, he could sure use a good "moral cleansing"
Dick Cheney is such an evil fuck that he'd take it all without grimacing, laugh, and say, "is that all you've got?"
You're both wrong, all of Dick Cheney's digestive orifaces were plugged with tungsten plating decades ago.
That which does not eat earthly food, needs no earthly holes.
yeah, but how much in the NWO currency TPTB are planning to issue?
Calling it play money would be generous as it doesn't exist in any form but 1s and 0s. As much as commenters complain about the "printing presses" printed paper fiat would actually be an improvement as it would at least exist in some sort of physical form. That is why I am thinking the sane thing would be to just let it all be wiped out - would it really create any real lasting damage to destroy a work of fiction?
Its called jubilee.
Wipe the debts clean.
"would it really create any real lasting damage to destroy a work of fiction?"
That Fiction is tied in with a LOT of other fiction, and when fiat pukes we'll find out that almost everything has been improperly priced. The house of cards is how everything has been created. Without some way to orderly re-price things velocity of money will likely go to zero; nearly everything will come to a screeching halt.
@FieldingMellish et al
As "Olephant" has pointed out:
"The confusion probably comes from the fact that Germans use the word Milliarden instead of Billion and the word Billionen translates to Trillion in English."
Good to keep in mind here. Thanks Olephant
German counting is different, we use the original french system where 1 trillion is 1018 and not 1012 like in the US of A. thats why the graph says billion(1012)
I'm a male. So I always think bigger is better.
/snark
<Can someone please explain to me how this won't all end badly?>
If it were to end badly that would be bad, so that won't happen. It's that simple. Today we will see JPM's vault will magically have more gold in it.
We will all me insane by the time this thing gives.
'We will all me insane by the time this thing gives.'
In progress..........................
They can spin them plates a lot longer than you think they can. It's a practiced skill, like being a magician or a circus freak.
It's been going on for a LONG time.
It happened slowly, then all at once...
No, they just leverage it higher. In theory, the boss could simply walk into the bank wearing a gold ring, leverage that to say 10,000 to one, take out a loan on the leverage amount at a low .25%. Hit the streets with a gold ETF and a fresh couple million. Live off the sales until you need a second ring. You got 8 fingers, 2 thumbs, and 2 ears, and didin't even build that, but your rich anyhows so it don't matter.
"If it were to end badly, that would be bad, mmmkay?"
Matrix Metrics.
We took the redpill, remember?
I just didnt take the red pill...
.
I injected the Mofo...
.
And yes, this ends badly.
"It" simply won't end. Next question please.
This will never end, because when it does, they will lean on Merriam-Webster (probably underwater on repackaged subprime securities and flagging due to people using dictionary.com) to redefine the word "end" to refer to some other page in the dictionary, which will itself refer the reader to some other page, on so on and so forth like a "Choose Your Own Adventure" book with lousy editing.
Flasher
That was great! I'm still lol!
Simple...
Bazillion $ platinum coin.
"Can someone please explain to me how this won't all end badly?"
because it's just a mad intra-megabank paper imagination game. no way to see it differently, eventually
megabanks chain themselves to it like strikers to the gates of a factory, only it's the FED and those CBs they can strongarm
just ban that hideous stuff, would be a quicker solution
Charts should be trillion not billion...
The FED new purchasing policy rates it a strong buy
Already talk on Bloomberg about increasing Q^
Was ist das??
Das ist eine riesege Schwanz in den Arsch!
Fed to Berlin: "Keine gold fur sie!"
Es machts nicht...gehen sie schlafen.
DB Überschrift zum Scheißhaus...
At least there will be plenty of paper there.
DB - the largest beneficiary of the greek (and other so european countries) "bailout"
You've got your billions and trillions mixed up there. I know, lots of zeros it's hard to keep track.
That's why scientific notation was invented. Really, you know it makes sense.
I hate JPM not being #1 in everything.
A trillion here a trillion there and pretty soon we're gonna be talking real money.
Personally, I "like" gazzillions.
That is good! I like Brazzilions!
Dear DB Account Holder,
due to some recent unpredicted losses in our derivatives book, 50% of your cash account has been converted into DB common equity in a newly issued non-sellable equity class called DBFF (DB fucked forever).
Rgds,
Anshu (the Indian guy from London who cannot really speak your language, but you trust anyhow because you want to be regarded as multi-culti)
The template that supposedly isn't a template. Bank runs this summer?
Cyprus already happened and there were no bank runs. There could be bank runs and there would be no bank runs. It's all good. we are getting worked up over over nothing. In all honesty DB ain't going anywhere. Never gonna happen. if the idea is tat DB pulls the plug on someone else I would love to see some evidence.
I understand the junks for this comment. But can someone present anything other than the fact that DB just got 3 bil more capitalized today than they were yesterday?
Yeah, I'm probably hoping for too much. Cyprus caused me to have my own bank run/jog/trot, but there obviously weren't many others who reacted that way.
Not sure what would cause more people to wake up. I guess it would have to be multiple bank failures, but that's likely when governments would step in and taxpayers would get screwed all over again because "it's for the children."
Not many others? You were looking for lineups at the bank, the lineups were at the bullion dealer (online and local). The one thing you can credit the current fiat fraud with is convenience!
At this stage of the game, to the masses (aka sheeple), it still represents other peoples money. This means the plan is working fine.
Gerne geschehen, wir schicken ihnen noch ein paar Euros mehr.....es ist doch UNSERE Deutsche Bank, wir lassen uns doch nicht lumpen!
In theory, AIG wouldn't have needed $180 billion of taxpayer bailouts to cover their derivatives losses.
In practice... We should have let AIG and Goldman Sachs fail. But just like on TV, the defeated killer is allowed to live, which just ain't reality...
the figures are in trillions but the graph is in billions.
Germany is a little shrimp
2.7 billion economy........................
The European entrepot economy is over.
We in Ireland became a Imperial market for Germany & France post 1973 /80.
When that imploded in 2007/8 they sought to make the entrepot economy smaller by turning us into a hinterland for their wasteful operations.
Now this smaller entrepot is imploding.
Go fuck yourself you fucking bastards.
I always thought it strange that the Irish would throw off one yoke (English despotism) for another (European monetary despotism). Are you masochists?
You don't understand Ireland.
It has not been a homogenous society for over 1000 years.........
http://www.youtube.com/watch?v=YWHyJrd2xP8&list=UUDGN6PKvJsFcfsbz0Des4GQ&index=7
There is no we in Ireland
There is us and them.
Even when we all looked alike there was my tribe and their tribe.
The Icelandics are a bunch of Norse with the best looking Irish girls taken to buff out their gene pool.
Is that f***ing tax cheat, hyprocrite & global corporate shill Bono Hewison and the rest of U2 (richest people in Ireland) considered to be us or them?
Doesn't Ireland have any lamp posts for these cheeky lads?
LOL! Junked by some tard U2 fan who thinks Bono's lyrics are deep. F tax cheaters U2.
you may or may not have heard the true story/urban legend of Bono at one of his concerts starting a slow clap whilst stating "everytime I clap my hands, a child in the 3rd world dies". So a guy in the audience pipes up and says "well stop fuckin clapping then".
I hit wikipedia to do some analysis (lol) of this comment, but their page has no entry for either "economy" or "commerce".
They didn't understand what money is... Still don't. The Irish I know still blame themselves and are catholic so yes they're masochists.
The irish(I am Irish) are like all other western populations,grown fat and lazy on iPhones,x box and X factor.all the people want is to believe the dipshit leaders have our best interests at heart,and it will all be ok.it will all be ok.IT WILL ALL BE OK!
NO IT FUCKING WILL NOT!
Germany is not the prudent nation we should all aspire to.I have nothing against German people except for the trust they have in their authorities.german people will berate you if you jay walk.great,they love to inforce rules.But the dishonest fuckers they elect like to piss on the rule book in the morning.
FUCK off ANGELA YOU FAT BANKERS WHORE!
If DB blows up( and it might not because these cunts are good at the plate spinning)we will all be SHOCKED!SHOCKED!
If DB blows up,who's gonna get presented with the bill? You,me and every other stupid citizen of planet EURO.the scum will run with their fat bonuses.
But the Irish have Jack Taylor who can solve crimes while passed out shitfaced.
amazes me the amount of times in recent years I've been told at dinner parties "ohhh, so you want to make us poor again" upon suggesting Ireland exits the Euro & EU. Maybe another Irish taxpayer contribution of, say, a trillion Euros, to Deutsche's derivatives bill will finally shake the stupid out of these morons.
Let them fail. Its the only way to be sure.
the only digits that mean anything anymore are found on our hands
(especially that digit that pulls a trigger.)
You can't eat a derivative
but it can eat you
"9-9-9" - Herman Von Cain
"C-C-C" Cascading Collateral Carnage - mkorner
F U B A R
youknowwhatitmeans
And FUBAR quickly leads to BOHICA.
pods
You forgot one.
Cross
Poor people don't need to worry about those debts.
Nothing left to lose.
I wished it were that easy, but something tells me blood will flow - rich and poor.
I wonder if there will come a point where even having an empty account at one of these fine institutions will cause you to become encumbered by their ineptitude. Debt transfer by association?
Just being a 'people' should qualify you.
Even if you are cold and no longer breathing they'll find a way to stick it to you. These guys are thorough, I'll give 'em that.
Yep. Here in the states, your social security number enrolls you in the taxpayer lotto. Elsewhere, I suppose it's whatever mark of the beast they have locally.
Big thanks to the Tyler who combed the books to find that derivatives balance. Something really stinks here at the Taunusanlage, and it ain't the roasted Wurst from the Fressgasse.
$45 T in interest rate derivatives. That says when interest rates break out, Ben and his CB compadres are going to find themselves paws up in an alley.
It's no wonder there is such incredible compression in the Eurodollar curve.
Note to self: Must reduce DB exposure from 80 Euro to 40 Euro in bank account, to mitigate risk of catastrophic liquidity scenario.
I know an ant can carry 100 times it's own weight; but this is an ant who can't. Whoops there goes another rubber tree plant, damn.
And since when are notionals meaningful when it comes to derivative exposures?
How much DV01, CS01, delta etc. is this?
Good point. Oh wait, the same DV01, CS01, delta, counterparty risk, etc, and all other paper calculations that fed into some excel model and led Lehman to believe its Value at Risk (with a 99% confidence level) was just $150 the day before filing? The same VaR limit that implied just a slightly lower total loss than the sub 10% recovery on Unsecured claims and the wipeout of tens of billions in debt?
Or maybe you are referring to the tiny reported derivative exposure by Lehman as of June 30, 2008 which somehow ended up being magnified substantilaly when the bank filed, and led to a $20+ trillion bailout by the Fed of the entire financial system?
We are confused.
$150? Could have paid that out of the bagel budget.
Drink more......It helps.
Sometimes it helps, but I'm hung over as hell today, and I probably understood four words of Tyler's response. It would be Sanskrit if I were drunk...
My favorite part of the magical world of derivatives, is how every bet is matched with a mirror-image bet so that the outcome of all activity sums to zero.
Failing that, the Cat in the Hat appears, calls upon Little Cat Z, the Z you can't see, and makes it all better using VOOM!
nice
it's sad when Dr. Seuss is the only financial analogy that works anymore
Every bet is matched??? OK, maybe, but quite a few on the "wrong" side of those bets (Abacus anyone) likely had no idea they were betting - they thought they were making "investments." I hope that by now, everyone has read Matt Tiabi's latest - interest rate rigging. Forget Communits, forget terrorists, forget illegal immigrants - the real, true, sworn enemies of the American people are the banksters. And, BTW - they're winning.
As long as there's someone* out there willing to go "double or nothing" then it's all good.
*That would be you, via proxy.
YEAH!!! what tyler said!!!.................................
EXCEL(lent)!
it's almost as if this is all.... bullshit
golf clap
perhaps it's time to stop calling 2008 a banker bailout and switch to DEPOSITOR bailout for the cheap seats...
TIA!
i'm so sorry, but when I saw that table I started giggling uncontrolably. i'm better now.