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Deutsche Bank "Is Horribly Undercapitalized... It's Ridiculous" Says Former Fed President Hoenig
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":
Hoenig pointed to the gain in Deutsche Bank shares in January on the same day it posted a big quarterly loss, because it had improved its Basel III capital ratios by cutting risk-weighted assets.
"My other example with poor Deutsche Bank is that they lose $2 billion and raise their capital ratio. It's - I don't want to say insane, but it's ridiculous," Hoenig said.
A leverage ratio is a better method to show a firm's ability to absorb sudden losses, Hoenig says, and he has floated a plan to raise the ratio to 10 percent. He said the 3 percent leverage hurdle under Basel was a "pretend number."
Opponents of using such a ratio say that it ignores the risk in a bank's loan books, and can make a bank with only healthy borrowers look equally risky as a bank whose clients are less likely to pay back their loans. It also fails to take into account how easily a bank can sell its assets - so-called liquidity - or whether it is hedged against risk.
Still, equity analysts said that while Deutsche Bank likely will meet regulatory capital requirements, its ratios look weak.
Ugh: terminology, ratios, numbers. It's gives a chap the belly-ache.
But just as we were about a year ahead with our warning of DB's "off the charts" leverage, so we wish to remind readers that some time around June 2014, the topic of Deutsche Bank's $72.8 trillion in derivatives, or about 21 times more than the GDP of Germany, will be the recurring news headline du jour.
Recall from April: "At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)" which for those who missed it, we urge rereading:
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Horrible = Bullish.
Uh, what? "They have no margin for error"?
WTF? The entire Western banking system exists solely on lies and Federal cash infusions. It's not that "there is no room for error", the whole fuckin gambit is one big error.
Call this shit what it is: A failed growth experiment investing in nefarious "derivatives" (whatever the fuck that really is) at 100x plus leverage.
Now someone's gotta pay, and we all know who that will be. Until that time the stupid lies and can kicking continues, ad nauseum, because the idiots in charge have no clue how to handle 'broke'.
Derivatives = financial instruments ;)...got yield??
I'm confident the 55 trillion will be paid off and it'll be 1955 again in no time..
Hearing dark age.
for maximum enjoyment, use a DB account to short DB.
wie...(what)...
OK, so everyone has known this for a long time. So what's up with a Fed president talking about it OPENLY in the press? This sniffs all wrong. Bankers don't do that to other bankers in the press. I'm thinking maybe its a distraction from something else (yet to come, or just happened and we haven't heard about it yet).
Love the ridiculously oversized bar graph, too. That and the Swirlogram are definitely my favorite ZH graphics.
Wir sind broke.
Got collateral?
I do.
Nie. Wir sind im Arsch.
This whole thing is a non-problem. The U. S. subsidiary of DB (or whatever they do here, maybe a backroom accounting office in a pizza parlor) will be eligible for Fed "assistance" in case there is any blow-up. They've been subsidizing foreign banks for years now. The brouhaha is in actuality a brouhohum.
I thought the brohohum was the birth certificate?
Deflecting eyes away from JPM.
funny but don't try it... you'll probably get a 'force majeure' or some BS
Derivatives: Banker chain letter whereby banker sells IOU paper to other bankers who sell to other bankers. At each step a fee is derived and the greater fool gets stuck with the worthless paper. This gives the semblance of doing lots of business and financializing the planet and all the little children
Also known as a banker circle jerk. We all know the public will get the face full.
...soggy biscuit time.
The wonderful world of negotiable instruments (promissory notes, bundled and sold at a discount for cash, transferring liability to a 3rd party)
What could go wrong?
Roflmfao
Yes. And in the end they have all one last adress to forward to. The Fed.
Thats why Hoenig knows about DB numbers so good. Its all insured and hedged in the US, just like it was the case in AIG. And then the Fed has to print. That makes him so angry. He would like to have DB a burden for the ECB but unfortunately the Fed once more has to print for the sour bets, while the ECB can hold the Euro clean.
We are working 'round the clock in the lab in an attempt to discover a way to turn derivatives into a kind of tofu.
Thank God! We're saved! At least we won't starve to death if you are successful. There must be enough of those to not only feed the entire planet and save the whales, but provide enough clean energy to power us for the next 100 years.
MOAR STRAUSS TESTS bitchez!...
banks are the casino the bankocracy has set up, which flows directly to them, if there happens to be a problem with the flow to them they simply have the puppets elected or appointed to print. it all works. don't worry, just keep on using your plastic.
Basel risk weights are such a crock of crap. Especially in a world where sovereigns are broke. DB will die in flames. While the LEH of Europe will probably be French, DB will be the one that tips the globe over.
No one is going to pay off on those derivatives when they go sour. We've seen that play already.
Like playing hot potato. Problem is, the tater is getting bigger and hotter with each toss. Somebody's gonna fumble and it won't be a pretty sight.
Derivative exposure is nominal value?
I worked at Deutsche in risk management. They have a pretty advanced system to analyse counterparty risk and also means to to analyse respective derivative exposure. Usual mtm is a small fraction on nominal, which is netted out and depends on ability of various counterparties to honor collateral agreementa.
But yes. Number is horrible. His majesty Hugo Banziger is out.
Poom = the sound of implosion.
Notional becomes real value in case of default.
No more netting out. Does their model also (seriously) consider the implications of such a case?
No. Only mtm becomes effective and it is collateralized. Nominal values have very little to do with risk.
Nominal is just for calculating mtm exposure. With many big cps, trades go both ways. Therefore they get netted out. So nominal exposure in terms of notional may look big, but in reality risk is quite small.
Surprisingly small as I have seen myself. Numbers would disapponit if presented here.
But it is true, balance sheet is huge and it needs to be refinanced regularly. Especially since deutsche pissed off other banks by refusing any funding more than a week. So they are actually in very short end of funding curve.
I sometimes compared to deutsche funding to someone in a room running out of air, liquidity being the air to stay well for deutsche.
You're dancing around the elephant in the room. If Only mtm becomes effective, then how big does mtm become in case of default (of the underlying and/or the counterparty).
Mtm is exactly the same as before default. It depends on underlying, not cp. Underlying being fx, irs, equity etc, they are all covered by ISDA and get netted out.
Mtm has nothing to do with a default unless it is cds. But no one accepta cds on itself from issuing bank.
Simple.
i think what they are driving at is what happens when big cps go tits up (think AIG without a bailout)? it sets off a daisychain of defaults, collateral calls, and funding issues. eventually a link in that collateral chain will break, which will break another, and another, etc.
i gamed this out a few years ago. a spanish default will smoke a french bank. which, in turn, will smoke a british bank. which, in turn, will smoke a--ahem--german bank. and that is just for cash exposures. when you pile on the derivatives the german default causes pain all the way in the good old US of A.
DB is a ticking bomb.
There are many different types of derivatives, its misleading to say that their total exposure is all risk. You would need to assesss the types and amounts of each catagory of derivatives. The banks aren't truthful about their risk and downplay their exposure as seen over and over throughout history. Lehman and Bear Stearns collapse was probably an attempt to balance out some of the other bank's derivative positions. IMO
Unless the entire derivative book is made up of standardized contracts, a spreadsheet (or database) can't quantify risk properly because the power is hands of the lawyers, not the bean counters. The gorilla (even though he didn't weigh 800lbs) had lots of spreadsheets to justify Lehman's positions but some his counterparties had heavier weight legal teams.
Exactly, who cares, ultra bullish, esp. because a "former" whatsoever and whosoever said so.....
9 Trillion $ missing from the FED!
http://www.youtube.com/watch?v=SIM8x5wLtR4&feature=youtu.be
They'll NEVER catch me, Bwahahahahaha!
Why is the June 2014 called out?
lol at that bar chart. Gonna be fun.
The problem is that only about 5% of the population understands this number mathematically.... 1.63%.....they've been purposely (and willfully) dumbed down to brain mush. Give them a joystick and put them in front of a drone monitor and tell them they're saving humanity.......
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.
The amusing thing about this is Deutsche bank = the European union.
Anyway, the population understands what 60x leverage is I bet, but just what exactly does that mean to any of us really? So, they moved around a bunch of numbers on a computer (aka derivatives) and now they're hopelessly undercapitalized. We are supposed to obsess over this why?
It's like in the olden days when the king went deep into the red, end of the day population can't do much about it except foot the bill.
Alfred Herrhausen, at the time head of Deutsche Bank, was killed by a car bomb in Frankfurt on 30 November 1989.
A couple of years ago, then Deutsche Bank head Josef Ackermann was asked about a possible 'debt jubilee' of haircuts to wipe out a lot of the bad debt in Europe, and Ackermann responded by 'joking' that if he came out publicly in favour of such debt write-offs, he might suffer the same fate as Herrhausen.
Even for the bankers, it is sometimes a life and death game
Rich and powerful, they yet face the question... Which is the deadlier risk
Too much corruption ... or too much 'truthiness' ?
Fuck 'em. If they didn't want pressure, they should have been ice cream men. I'm sure monstrous payoffs wash their bitter pills down adequately.
There were several options with Herrhausen offered as a solution. He decided his own fate and ultimately had to made an "example" of.......
We can only hope that some motivated individuals help the bankster class see the light once again.
What risk do Banksters have? Why woul dthey be different than US Banksters who have far less career risk than public utilities, which is exactly what the scumbags should get paid like.
choom! they are all on drugs!!
Ya think?, Benny has already sent them a HUIGE amount of clownbux.(at least 2 yrs ago).
Just borrow 50 trillion from the Fed at 0.0%. Problem solved.
Hoenig knows that to shake that booger off your finger you first point at somebody else as a distraction.
I always say hello and pat them on the back.
http://youtu.be/kzw1_2b-I7A Is it Safe? Mein Herr?
c-c-cant they do the D'Troit Shuffle nickel or 2 on the dollar? or just lower rates on the commodity las vegas room market to 69.95 a nite to payoff the $ 4 B in debt
on the hotel they own/run, giggle giggle giggle. Its really Hysterical, El Deutcho running a Vegas Casino, worth $ 800 m in debt $ 4 Billion. Hysterical.
I have read a bit of this elsewhere and a point missed in the article.
From now to 2018 or the like all Deutsche bank's profits would need to be directed at recapitalising to reduce the leverage by a puny 1 or 2% and the lower level.
Kyle Bass was talking about Germany's failure to recap the lying banks years ago. Check it out at 24:15 in the AC2011 Session:
http://www.youtube.com/watch?v=5V3kpKzd-Yw
I like how the chart was from Morgan Stanley who Hoeonig also said was in deep shit.
The acceptable definition of 'black swan' is that it is unknown or not possible to know/predict.
I predict that the specific technical definition will be revised......inherent within the model framework....that premise alone is supposedly impossible!!!
Kudos to the Hedge for jumping on the DB......It will be the fulcrum in the coming months......make Lehman look 1st inning!
Stroll in the park. :)
Ah but in the grand scheme of things, Lehman was just the first out.
I think we gonna need a bigger bad bank
....and and place all the worst "assets" of the bad bank into a Really Bad Bank . Which could hire the unemployed!
why did this guy just come out and throw DB and 4 or 5 other ones under the bus? Anyone wondering that? What's going on behind the scenes that made him make that statement now?
Safe to assume that eventually some major banks, like DB and MS, will be led to the altar and sacrificed.
Trial balloons?
The FED knows it is royally FUCKED!...True and accuarate inflation/growth figures can only be manipulated so long.....There MUST be some precipitating event to explain the market failure.
The failure is the Capitalistic/Market system and the faith in a fiat backed currency. There is NO alternative model acceptable to a free democratic society.
I'm no Marxist.....but the inherent instabilties within free markets will with a 100% probability destroy itself from the inside.....aka human nature of fear and greed. The only conclusion that can be reached is increasing income/wealth inequality in a closed system.
-1
This isn't capitalism.
I AGREE!!!
but I DO NOT define the 'RULES'!
I just "observe" and use reason to its logical outcome---POWER and CONTROL!:)
I hope you realize that "free" and "democratic" are opposites.
That's exactly what has me scratching my head, too. I posted the same comment, above but before I read this far down.
Sumpin's up.
The more accurate the attack, the lower the collateral damage.
BTW, didn't Reggie come up with this like a year ago?
Because he just found out that Christ doesn't drive a volkswagon.
Yes I did... It's because he cannot for the love of life sleep any more without waking up with sweat dripping off him and through the mattress, onto the floor.
Somehow, our two sets of books became castrated. We need to run another round of bank stress tests to keep the separate accounting books in check.
Children Of The Sun
If Deutsche bank fails it will be game over.
It won't, Bernanke and the rest of the ruling Fed doves will print more money to bail out overseas banks.
The Fed is likely not even listing the debt on their balance sheet. It's mark to fantasy accounting with this Fed.
Kind of like the $11T that went out the back door in 2008/9 instead of the reported $700B?
But isn't Dick Fisher a Fed hawk?
I'm beginning to think it will never be "game over", they wont let it.
They will print, borrow, lie, cheat, steal, leverage, and rehypothecate until its " game doesnt freakin matter anymore" and we are all peasants digging in mud.
But then again, maybe im just getting jaded and cynical.
More 'Implied GDP' for the Muppet Class.
Don't forget. Now they can simply steal all assets held by their bank. If you put all assets of all their customers on the plus side of their sheet (rather than the minus side), their numbers don't look so bad.
And if that isn't sufficient, they can simply steal all the principle of loans paid by their mortgage holders. I mean, that is no more protected than cash deposits, right?
And make no mistake. That's how those executives think. And plan.
Who iareCASA on that list?
Credit Agricole!
I will rejoice when DB goes pop.
LOL, Dudley of the NY Fed and Evans of the Chicago Fed are probably lighting their cigars with $100 bills knowing that's all the currency will be good for.
Bernananke, Evans, Dudley and Yellen know they will just keep printing and throwing ever-worthless US dollars at overseas banks like Dusch bag Bank.
The sham goes on until the US dolar blows up. Expect even a greater QE amount as $85 billion/month is not enough to keep the sham going.
And that chart is a summary explanation of the motives behind the Troika agenda in a nutshell.
Yet all is well, right Ghordius?
The ONLY AGENDA.....has been since Goldman and Morgan Stanley 'became' bank holding companies!:)
Ghordius is on a long vacation; rewriting the new treaty of the revised EU, where confederation and federation, fiscal union and nation state disunion add up to the same thing.
Democracy is demoncracy; its just a play on words, as life is but a game and we are just actors. All the world's a stage and we live "as you like it".
I'm sure they're well-hedged and all those collateral chains are well-fed and monitored. So they would instantaneously know who owns what even if it's a 1000 times re-hypothecationed. Too big too jail banksters would never risk the economic well being of an entire continent just for a bonus cheque.
Deutsche Bank Total Derivative Exposure - The main driver for bigger computer screens and higher resolution.
So that's why DB has come to these shores and foreclosed on Americans property without even having an ounce of standing and skin in the game.
It also makes me want to see Geithner to be 1st person hanged for treason for allowing the Treasury to be taken over.
Enemies Foreign AND Domestic.
"Too big too jail banksters"
Like Corzine, they get a free pass to keep their loot and sip nice tropical drinks on the yacht(s).
The best way to bob a bank is to own one.
Divert your reserves offshore and lever it up. When it blows the taxpayer bails you out.
Nobody was prosecuted so now it's on to larger and more profitable financial capers.
"Thomas Hoenig"
He's old school. This current band of Federal Reserve heads are PhD super money printers. They are making the old Fed heads look fiscally prudent.
Hoenig can point and snicker at Deutsch Bank's 1.63% capital ratio, since the Federal Reserve's capital ratio is so much stronger at 1.85%.
http://federalreserve.gov/releases/h41/Current/
Apples and Oranges----DB has a finite balance sheet! The FED theoretically/model does not, BUT I believe the 'market' technically limits the FED balance sheet....at least while the music is playing and EVERYONE "wants to dance":)
As long as there is a gun to their head, most people will "want" to dance to whatever is playing.
BTW: the "market" has a gun to its head.
Too bad Jamie Dimon sold their gold Bitchez.
Can Germans miscalculate? I thought they are always precise and never take vacation...
Miscalculation is not possible.
OT: I just read a very good essay titled, WHEN MEN BECOME RATS(Longterm effect of inflationary monetary policy on society), by Linus Huber[Who is unknown to me].
It was posted a few days ago in the comments section of Michael Pettis' latest article:How much investment is optimal?
Give it a read. I don't think anyone here will be disappointed.
Thanks for sharing that. Growing structure, shrinking agency. Link to the actual comment:
http://www.mpettis.com/2013/06/10/how-much-investment-is-optimal/#commen...
Perhaps Greece can lend them some money ?
Just who is f,ckin owner of DB? Is it Thurn-taxis or Hohenzollern family?
Hitler's clone, from deep within Brazil.
http://www.imdb.com/title/tt0077269/
Just who is f,ckin owner of DB? Is it Thurn-taxis or Hohenzollern family?
Neither of them. Some guys from N.Y.
"BlackRock Inc., New York, which holds 5.14 % of our shares, is the only large shareholder whose holdings at the end of 2012 are subject to the statutory reporting threshold of 3 %."
https://annualreport.deutsche-bank.com/2012/ar/stakeholders/shareholders...
I have always thought that the holders of publicly traded bank equity were not the real owners - just providers of capital.
The real owners who stand first in line of all the creditors are the bond holders. Not the fools holding subordinated 'savings bonds' but the likes of the Rothschild, Baring, Rockerfeller family offices--they have serious capital in play and enjoy yields and security the rest of us can only dream of.
Sure BlackdickRock owns everything but this is just a public veil. But thanks for reply!
" Please, do not worry ".
No wonder Germany wants their gold back from the U.S., eh?
Warning, WARNING! Danger Will Robinson and Dr. Smith....Warning.
Aye.
Wasn't it 30X leverage that sunk Lehman and Bear Stearns?
60X leverage for Deutsche Bank? Wow.
This is relatively normal in Europe. Reserve ratio is 100:1 for example. Euro notes are going to get real scarce when more banks start falling over.
So if my little company goes out and borrows 100 Trillion USD (assume some retard lends it to me) and then I blow it can I bankrupt my country?
Weiter, weiter, hier gibt's nix zu sehen.
Wir nehmen keine Gefangenen.
Given the quantum of pain and suffering caused by Germans in the last Century, it to be legal to kill them on sight anywhere they are found nowadays, by any means immediately available. They are thr real scum of the earth..
Anyone watch The Pianist?
I watched it again last night and thanked the Gods for our 2nd Amendment.
"In September 1939, W?adys?aw Szpilman, a Polish-Jewish pianist, plays on radio in Warsaw when the station is bombed during Nazi Germany's invasion of Poland at the outbreak of World War II. Hoping for a quick victory, Szpilman rejoices with family at home when learning that Britain and France have declared war on Germany. But Germany defeats Poland quickly and its troops enter Warsaw, where life for Jews deteriorates as the Nazi authorities prevent them working or owning businesses, and force them to wear Star of David armbands." (Wiki)
If you want to make it a double-header, then watch,
"The Flowers of War."
"The Nanking Massacre or Nanjing Massacre, also known as the Rape of Nanking, was a mass murder and war rape that occurred during the six-week period following the Japanese capture of the city of Nanking (Nanjing), the former capital of the Republic of China, on December 13, 1937 during the Second Sino-Japanese War. During this period, hundreds of thousands of Chinese civilians and disarmed soldiers were murdered by soldiers of the Imperial Japanese Army.[1][2] Widespread rape and looting also occurred.[3][4] Historians and witnesses have estimated that 250,000 to 300,000 people were killed." also wiki
City of Life and Death, a darker version of the Nanjing atrocities:
http://www.imdb.com/title/tt1124052/ ~ both are great films
Hiroshima could be viewed as relatively instant karma for that, but when the highest-on-the-food chain banksters get theirs is anyone's guess, not so instant it seems
Im just waiting for their final excuse. "The paper money system is flawed, not our banks. We must replace it".
Another bait & switch program in the works.. If we don’t do this, our entire financial system will collapse --- Crisis Actors ---
Paulson July 16 2009
and that, ladies and gentlemen, is what you call a poison pill
Need more QE, which will help nothing but gold, despite the tom foolery on current pricing. The derivative market and leverage will absord every drop of liquidity we feed to it like a sponge in the Sahara. Money will be created. None will hit the economy. Super stagflation. All the money they print will just sit at the house bank (Fed) to back outrageous credit lines at the casino.
Funny to find Swedish bank Nordea on that list... They just slashed mortgage rates by .2% and the least expensive bank for newcomers to the soon-to-be exploding Swedish real estate bubble. Has their ridiculously low capital anything to with it or do they just want to go out with a bang?
They don't call it Douche Bank for nothing, after all...
Fed sponsoring EU based banks in the US. BoJ buying periferie EU bonds, BoI buying Facebook, chemical weapons used by Syria against 'rebels', Abenomics facetransplant experiments, Germany as a goldbeggar, Cyprus template, DB under the bus. Fiath is fading in exactly the right direction. Patience is a great good.
Canada's CMHC, a rogue bank operating in Canada's housing market is just as bad as Douche Bank. 50X leverage against its portfolio of subprime mortgage guarantees.
Deutsche Bank may be undercapitliized by International GAAP standards, but is NOT undercapitalized by FED standards.
Having access to the FED allows them to siphen off any amount of capital they need from the FED open fountain.
yes, FED can sponsor DB but who will then own the DB? will it be still German?
This is what happens when you over compensate bankers for short term brilliant results which in the light of day end up being not so brilliant.
F*cktards getting your knickers in a twist over nothing. Trying looking at CT1 to NET Assets, or CT1 + Tierone collateral pledged against bank liabilities to TA. You will find that ANY securities financing operation looks miserable on Hoenig's dumb metrics because they exclude the collateral the IBs hold as margin. This scare-piece is just plain dumb.
Right on. And that doesn't even include repo 105, 110, 115, 120 and so on ad inf. After all the only thing better than collateral is re-re-re-re rehypothecated collateral
just a god-damn pyriamid of "promises to pay" collateralized by the serpent's tail (loop); by the time you get to the last re-hypothication -hypothecator- he is using the same colalteral as someone else. This is why a house of card in a strong wind is more sturdy than the shit faced banking business - the world does not have an updating public access inventory of assets tha tare collateralized like a title report in the realestate business for when you buy or loan against a residence or commercial property. without that hard data collected and maintained and regularly updated by a trustworthy system - you are screwed. and don't tell me a bou UCC filings. They are easily defeated by shytersand banksters - the most di9shoinest people on earth are bank loan officers and their superiors - except maybe cdo salesmen.
Just take a deep breath. You’ll become desensitized in time. Once you cross the red line, you’ll never go back. My Marco Island LIBOR meltdown anniversary is approaching. I completely destroyed a beautiful evening at our home. She was in complete fear on my unhinged roars of LIBOR. Today, she understands why my elevated anger unfolded. About a month later, we returned to the house. She says, “you’re not going to have another LIBOR meltdown again?” I gave her a hug. Assured her that I won’t repeat that scenario. As I pinch her butt, I told her that each & every one of these bastards will end up in jail. Winks
Why is this bank still open? Oh thats right! To big to fail. Well until it does.
Libor scandal no threat to Deutsche Bank co-chief Jain: sources
And the beat goes on..
Everything is great untill it's not.
The second undercapitalized market is Credit Agricole.
Excellent Analysis .. btw, Goldman Sachs is the US version of DB in Europe.
+5
Douche Bank
My "Krause" says that all my gold and silver coins still have their proper precious metal content and that their value is not at risk of going below BV.
Fuck me
Fuck me
And this is only One bank !
Cockroachez, Bitchez.
Please remember, under our current paradigm, the savers/creditors always pay.
Who are the savers/creditors?
Pension Funds
Mutual Funds
Insurance companies
Bank depositors
Endowment funds
Creditor Nations (BRICS, OPEC, Germany).
The Creditor Nations are busy converting worthless paper promises of wealth to real wealth (shiny yellow stuff, mines, oil wells, land, commodities).
Western savers/creditors in the institutions above: not so much.
The Western Middle classes are going to be wiped out in the coming financial Holocaust
Derivatives: Banker chain letters whereby banker sells IOU papers to other bankers who sell to other bankers. At each step a fee is derived and the greater fool gets stuck with the worthless paper.
And in the end they have all one last adress to forward to. The Fed.
Thats why Hoenig knows about DB numbers so well. Its all insured and hedged in the USA, just like it was the case with the AIG breakdown following the Lehman event. At that time the Fed had to cough-up many billions to save not only the TBTF banks of the US but also from other countries such as Deutsche Bank.
Now its the same again. Given the case the ECB is not stopped in its work to oversee the European banks (Euroland) as a whole, then it can easily be predicted that a wave of claims based on the derivatives is going to arrive at the shores of the TBTF US banks. And then the choice is simple for the Fed. Print and pay out or let the whole system go down.
And then the Fed has to print. That makes him so angry. He would like to have DB a burden for the ECB, forcing the ECB to print. But the ECB wont do it. And this is correct.
Deutsche Bank and other big European banks have bought insurance in the USA. They will present their claims there. And then the Fed pays out or not. Its the choice of the Fed, and its the business of the Fed.
Under the FED supervision the big US banks have sold this kind of insurance well knowing, that in case desaster strikes the banks do not have the money to pay for possible future claims arising from these insurance policies (derivatives) . Its a thing what is called "insurance fraud". Cashing in unlimited high premiums while forwarding the risks to the public (USA population) - via the Fed.
Unregulated derivative business = Insurance fraud. And this was done by Greenspan, Summers, Rubin, et al. http://dailybail.com/home/pbs-frontline-the-warning-how-greenspan-summer...
Its another question, if Dt. Bank and others knew about it while signing the contracts. For sure they knew - but DB pretended that everything is fine - just as the Fed still does today. One might say, one criminal made business with another criminal while both sides knew the bill is going to be paid by a unrelated "third party", unfortunately this "third party" is the US public and only now the "third party" finds out, that somebody signed this contract for them. The FED signed it when allowing such criminal behaviour of the banks.
Dont blame it on The Europeans. The FED was the "master of the financial universe" in the past and when the FED blessed such deals it had to be fine for the rest of the world.
And now crunch time is arriving. Slowly but steadily. The ECB is going forward rigidly inspecting the Euroland banks and forcing them to clean-up their balance sheets over time. And this means desaster for the western bankings system. Not more and not less.
The choice of the Fed is whether to let the European banks go down - and with them the whole western financial system. Or Benny is cranking up once more the printing presses in his basement to high speed mode. I heard he just ordered 10 more Speedmaster printing presses in Germany.
Unregulated derivative business = Insurance fraud. And this was done by Greenspan, Summers, Rubin, et al.
This link works better: See how Greenspan (FED) and Rubin, Summers, Geithner et al. sold the US http://www.pbs.org/wgbh/pages/frontline/warning/view/?autoplay
So even backed by the completely fraudulent fractional reserve banking ponzi scheme Deutsche Bank has managed to go bust....Wow!.
Every Bank on that list including DB is up 50% - 100% bar Commerz, so if you had tried to short them you got killed...
no big deal. everybody knows that the world is gonna divy up all banks into 'good' and 'bad', and tuck the 'bad' onto a usb stick.
there is no other choice.