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The Elephant In The Room: Deutsche Bank's $75 Trillion In Derivatives Is 20 Times Greater Than German GDP

Tyler Durden's picture


It is perhaps supremely ironic that the last time we did an in depth analysis of Deutsche Bank's financial situation was precisely a year ago, when the largest bank in Europe (and according to some, the world), stunned its investors with a 10% equity dilution. Why the capital raise if everything was as peachy as the ECB promised it had been? It turned out, nothing was peachy, and in fact DB would proceed to undergo a massive balance sheet deleveraging campaign over the next year, in which it would quietly dispose of all the ugly stuff on its balance sheet during the relentless Fed and BOJ-inspired "dash for trash" rally in a way not to spook investors about everything else that may be beneath the Deutsche covers.

We note this because moments ago, Deutsche Bank did the same again when it announced that it would issue yet another €1.5 billion in Tier 1 capital.

The issuance will be the third step in a co-ordinated series of measures, announced on 29 April 2013, to further strengthen the Bank’s capital structure and follows a EUR 3 billion equity capital raise in April 2013 and the issuance of USD 1.5 billion CRD4 compliant Tier 2 securities in May 2013. Today’s announced transaction is the first step towards reaching the overall targeted volume of approximately EUR 5 billion of CRD4 compliant Additional Tier 1 capital which the Bank plans to issue by the end of 2015

Ok, so in retrospect nothing is peachy in Frankfurt, and for all the constant lies about improving NPLs and rising cash flows, banks - especially those which not even the ECB can bailout when push comes to shove - Deutsche is as bad as it was a year ago.

So, just like last year when we decided to take a look inside the company's financials to understand why DB was scrambling to dilute its shareholders and raise a few paltry billion in cash, so this year too, we had the pleasure of perusing the European megabank's annual report.

What we found, while hardly surprising for those who read out post from also a year ago, "At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)", is just as jarring.

Because while America's largest bank by assets, and certainly ego of its CEO, that would be JPMorgan of course, had a whopping $70.4 trillion in total notional of derivative holdings (across futures, options, forwards, swaps, CDS, FX, and so on), Deutsche Bank once again put it well in the dust.

The number in question? €54,652,083,000,000 which, converted into USD at the current exchange rate, amounts to $75,718,274,913,180. Which is over $5 trillion more than JPM's total derivative holdings.

As we explained last year, 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 to €504.6 billion in positive market value exposure (assets), and €483.4 billion in negative market value exposure (liabilities), both of which are the single largest asset and liability line item in the firm's €1.6 trillion balance sheet mind you (and down from €2 trillion a year ago: a 20% deleveraging which according to DB "was predominantly driven by interest-rate derivatives and shifts in U.S. dollar, euro and  pound sterling yield curves during the year, foreign exchange rate movements as well as trade restructuring to  reduce mark-to-market, improved netting and increased clearing"), and subsequently collapses even further into a "tidy little package" number of just €21.2 in titak derivative "assets."

And as we further explained both last year and every other time we have the displeasure of having to explain the reality of gross vs net, this accounting gimmick 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 the past (and certainly when shadow funding conduits freeze up), and not only does the €21.2 billion number promptly cease to represent anything real, but the netted derivative exposure even promptlier become the gross number, somewhere north of $75 trillion.

The conclusion of this story has not changed one bit from last year: this epic derivative exposure is the primary reason why Germany, theatrically kicking and screaming for the past five 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 the GDP of both Germany and Europe 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.

As always, there is nothing to worry about: this €55 trillion in derivative exposure, should everything go really, really bad is backed by the more than equitable €522 billion in deposits, or just over 100 times less.


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Mon, 04/28/2014 - 15:00 | 4704866 Grande Tetons
Grande Tetons's picture

Pffft. Call me when Moochelle's ass is in the room. 

Mon, 04/28/2014 - 15:08 | 4704911 DoChenRollingBearing
DoChenRollingBearing's picture

Those two notional values of JPM's and Deutsche's derivatives are EACH about the same as world GDP, no?  Even notional values that high likely count (and so are bad) as who knows if many cancel out the others...

Mon, 04/28/2014 - 15:13 | 4704939 linniepar
linniepar's picture

In fiat funny money, it's not that much. Just buy a bunch of boxes of monopoly!

Mon, 04/28/2014 - 15:17 | 4704956 Say What Again
Say What Again's picture

Starting at around 3:09 EST someone began juicing the market -- Maybe its DB.  Many of the internal metrics, like TICK, UP/DOWN vol, VIX Ratio, etc, all went 3 sigma in a matter of a 120 seconds or so.

Mon, 04/28/2014 - 15:22 | 4704977 max2205
max2205's picture

And.......we are green

Mon, 04/28/2014 - 15:23 | 4704988 Say What Again
Say What Again's picture

Maybe DB is trying to front-run the Tuesday Ramp-a-Thon.

Mon, 04/28/2014 - 15:31 | 4705017 CClarity
CClarity's picture

BofA not so pretty today.  

All dem bankers know this is CB fluff and that they're a mess underneath.

Mon, 04/28/2014 - 15:48 | 4705105 eatthebanksters
eatthebanksters's picture

Isn't hypothecation just a formal word for Ponzi?

Mon, 04/28/2014 - 15:58 | 4705129 strannick
strannick's picture

Thats alot of elephant. Hopefully 75 trillion nets out perfectly, all their counter parties are fully collateralized, and the rehypothecated assets are fully backed. At least they'll have their gold back in 50 years, at this rate.

Mon, 04/28/2014 - 16:04 | 4705158 bania
bania's picture

Germans sure love their scheisse videos!

Mon, 04/28/2014 - 16:08 | 4705173 rubiconsolutions
rubiconsolutions's picture

Call me when Staples announces that they are running out of ink cartridges.  /s

Mon, 04/28/2014 - 16:11 | 4705191 I am more equal...
I am more equal than others's picture




Much like the big dick fallacy, these guys believe in the big risk (big reward) fallacy. 

Mon, 04/28/2014 - 16:37 | 4705268 Save_America1st
Save_America1st's picture

Ummmmm....The Golden Jackass has been talking about Deutsche Bank crumbling since last summer. Their top level execs been under heavy Interpol investigative pressure and they've had to withdraw from the London gold fixing scheme.  Jim says D.B. nightly has to scramble all night long to ensure they don't totally implode and can survive another day.  He predicts they will be broken up and

Jim Willie: If Deutsche Bank Goes Under It Will be Lehman Times Five!

44 minute youtube interview with The Doc about it from July 2013:

He predicts D.B. will be broken up in to 5 smaller parts:

Jim Willie Reveals the SMOKING GUN On US Gold Rehypothecation!

49 minute youtube interview with The Doc from Feb. 2014:




Mon, 04/28/2014 - 16:39 | 4705273 Keyser
Keyser's picture

For some reason the song Puff the Magic Dragon comes to mind because the Germans must be smoking dope to think this is going to end well... 

Mon, 04/28/2014 - 16:53 | 4705339 Wolferl
Wolferl's picture

The Germans? DB is just German by name, it´s a city of London investment bank. And do you really think Germany will pay for them alone if they go bust?

Mon, 04/28/2014 - 17:27 | 4705451 BaBaBouy
BaBaBouy's picture

We Live In This FANTASY LAND Where You Can Short Unlimited Amounts Of GOLD (And Limit Its Price)...
Does Anyone Really Dream That It Can Last ???

Up The Ante To $175 Trill, $250 Trill, And Why Not $1000 Trill ???

Mon, 04/28/2014 - 18:41 | 4705671 Herd Redirectio...
Herd Redirection Committee's picture

City of London, Frankfurt, Rothschild, what difference does it make?

Mon, 04/28/2014 - 17:38 | 4705507 JR
JR's picture

With this kind of leverage, Germany is nothing in comparison. DB uses Germany for leverage – and as long as the politicians give the cabal what it wants they will let them operate. But the time may come when it needs to take delivery of the country.

In the days in the long ago, banking was a service industry…keeping depositors money for a rental fee or charging a fee for their retail product, the bank loan.

Then, central banking arrived like a thief in the night.

Property, money, civil rights and the rest were swept into cabal pockets like marbles to a sack.

And now we find the giant banks taking one more handful: an entire nation and all its parts.

Just what kind of leverage would DB have over Germany? With an event concerning former Deutsch Bank’s Chief Josef Ackermann not so long ago, it can be shown that pressure looks like this - in Ackermann’s bid for Greek austerity measures complementing a $17 billion Greek bailout of the TBTFs:

Deutsche Bank’s Chief Josef Ackermann argued against restructuring the Greek debt because “it would force investors — and banks — to share Greece’s pain.

According to the NY Times: Ackermann "called on European governments to devise a ‘Marshall Plan’ for Greece that would offer more aid, while forcing the country to sell billions of euros’ worth of state assets, and provide a framework for rebuilding its economy.

“Any restructuring, Mr. Ackermann cautions, could be even worse than the crisis brought on by Lehman’s collapse. It could threaten the stability of major financial institutions, as well as the European Central Bank, which hold huge amounts of Greek debt, he says.”

Wrote the Times in mid-2011: 

European governments have largely followed that advice. At the same time, however, Mr. Ackermann has opposed the German government and sided with his friend Mr. arguing against restructuring the Greek debt…

Ackermann, whose office in Frankfurt is just a few blocks from close associate Jean-Claude Trichet at the ECB, claims the biggest challenge now is to ‘convince people of any country to help Greece even more.’”

Mon, 04/28/2014 - 19:11 | 4705737 blindfaith
blindfaith's picture

No... the real elephant in the room is these bastards have leveraged themselves with the Federal Reserve at their backs.  Where are Americans outrage?  These guys walk up to the AMERICAN banking window of the Federal Reserve and get all the free money they want ....JUST because THEY HAVE A BANK BANK BRANCH IN AMERICA!!!!!!

Did everyone forget that THIS BANK got millions free and lent it to blackrock or some black something hedge fund to buy all the houses people got cheated out of by the same Federal Reserve.  Hello!!!!

You American's on the hook here not the Germans,  The Germans laugh....hahahaha

The Counrty continues to be sold to anyone, and Americans just want games and Tv and burgers, and toys.

Mon, 04/28/2014 - 20:00 | 4705862 BurningFuld
BurningFuld's picture

Greece is fixed?




Mon, 04/28/2014 - 20:05 | 4705878 JR
JR's picture

Precisely. Ultimately, it is more US taxpayer funding for the American Empire, aka global governance. The trouble is, Americans do not own this Empire. It is banker-owned.

It ‘s 100 years past time for the American people to show some backbone and stop funding with America’s treasury, assets, labor and resources, aka their standard of living, the private oligarchs who own the Fed.

Our daily dose of bad news concerning our freedoms, our culture and our property produces unconstituional court verdicts, political corruption, military threats, and malfeasance and tyranny, small and large.

But where is the center of this storm: who pulls the levers that creates these ill winds? Where does the buck stop…and it’s not where Harry Truman and Barack Obama sit!

It’s in the office of a private organization called the Federal Reserve. And when this beast breathes no more, the Good Ship America will be on her way again.

Great post! Thanks.

Mon, 04/28/2014 - 17:05 | 4705390 Volkodav
Volkodav's picture

Good post!

Mon, 04/28/2014 - 19:51 | 4705828 Save_America1st
Save_America1st's picture


Mon, 04/28/2014 - 23:01 | 4706387 TheReplacement
TheReplacement's picture

When all you have is nothing, all in isn't always a bad risk.  When you already have everything, all in is practically a sin.

Mon, 04/28/2014 - 17:21 | 4705441 mt paul
mt paul's picture

as per the title 


long peanutz

Mon, 04/28/2014 - 17:31 | 4705483 nope-1004
nope-1004's picture

Not if the elephant in the room is in a coma, brain dead with no one allowed in the room to verify.


Mon, 04/28/2014 - 17:54 | 4705569 mt paul
mt paul's picture


elephant ...

Mon, 04/28/2014 - 15:38 | 4705068 TruthInSunshine
TruthInSunshine's picture

The trigger for the last meltdown (2008-2009) was liquidity starvation which led to a credit crunch (banks/financials and other holders of chattel paper assets were caught swimming naked with poison well assets and deteriorating balance sheets & couldn't re-collateralize).

The catalyst for the arriving crisis will be the real rate of inflation (already massively, adversely impacting the average barely shopper) on things such as necessities (gas, groceries, utilities, property taxes, higher income tax rates, higher medical care costs, etc.) coupled with the dawning realization on the part of corporations and "investors" that'central bank monetary policy since 2008 has now created the largest divergence between the perceived and real fundamental prices (the ask, which affects the bid for whatever actual demand there may be) on assets (i.e. price distortion - this extends to everything from real estate to stocks to bonds, including sovereign bonds).

Finally, there is a dramatic structural change taking place in the real economy at light speed, where automation is eviscerating the need for human workers (at ra time when the demand for labor is already quite weak) whereby the former middle classes in developed nation economies & working classes in emerging market economies are suffering wage deflation & loss of employable positions.

One example of these trends playing out using the U.S.'Economy as an example right now is that subprime is back in terms of real estate, auto and durable'good purchases, because the banks, manufacturers & retailers literally couldn't
survive if they were forced to rely upon/sell their wares to people who actually had the resources needed to purchase or finance the purchase of these things by historically normal standards.

3% to 5% down home mortgages and 84 month liar auto loans are back, and soon, the NINJA loans will be, too.

Mon, 04/28/2014 - 16:18 | 4705229 Seer
Seer's picture

And consider that banks really don't too well if everyone is "paying off" loans:

Debt Paydown Projected by U.S. to Be Biggest in Seven Years

If this isn't signaling the death knell for fractional reserve banking I don't know what is.  And they make is sound like all is well...

Mon, 04/28/2014 - 17:03 | 4705382 Volkodav
Volkodav's picture

Seer....let's just call it more what it really is....Fictional Reserve Banking

everyone quiet and let that sink in

Mon, 04/28/2014 - 18:07 | 4705596 El Vaquero
El Vaquero's picture

Or we simply call it a legalized Ponzi scheme.

Mon, 04/28/2014 - 19:39 | 4705799 logicalman
logicalman's picture

Fractional reserve banking, fiat currency, interest and inflation.


Mon, 04/28/2014 - 18:12 | 4705605 JR
JR's picture

There are several elephants in the room and it’s getting mighty crowded – hence, the tipping point. Here’s just one of those big elephants pointed out by Paul Craig Roberts – the offshoring of America’s manufacturing jobs with most all the profits going to the America’s newly affluent rulers, the international oligarchs whose core of operations is the Fed.

Roberts (2014)

After offshoring… “US manufacturing centers became shells of their former selves… Detroit lost 25% of its population, Gary Indiana lost 22% of its population, Flint Michigan lost 18% of its population, Cleveland lost 17% of its population, and St Louis lost 20% of its population…

“What jobs are the displaced manufacturing workers to be trained for? Why, service jobs, of course…service sector jobs such as hotel maids, hospital orderlies, retail clerks, waitresses and bartenders are low productivity, low value-added jobs that cannot pay incomes comparable to manufacturing jobs. The long term decline in real median family income relates to the movement offshore of manufacturing jobs and tradable professional service jobs, such as software engineering, IT, research and design.

“Moreover, domestic service jobs do not produce exportable goods and services…

“A country whose best known products are fraudulent and toxic financial instruments and GMO foods that no one wants cannot pay for its imports except by signing over its existing assets…

 “Economic development has always been about acquiring the capital, technology, business knowledge, and trained workforce to make valuable things that can be sold at home and abroad. US capital and technology are being located abroad, and the trained domestic workforce is disappearing from disuse and abandonment. The US is falling out of the ranks of the industrialized countries and is on the path to becoming an undeveloped economy.”

Mon, 04/28/2014 - 19:41 | 4705807 logicalman
logicalman's picture

How can a government sell what belongs to the people to cover their own irresponsible actions.

In international law, odious debt, also known as illegitimate debt, is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.

Mon, 04/28/2014 - 20:10 | 4705890 JR
JR's picture

Yes! Really good!! And ultimately all that backs these Fed oligarchs is paper...simply paper.

Mon, 04/28/2014 - 21:57 | 4706210 newworldorder
newworldorder's picture

What is known to the Banksters and the 1% is largely not understood by the average person/citizen in most countries on the planet.

Since it is not known and faith in Government/Democracy still exists in the West, the system will limp along. Most people in the West have lost the simplicy of understanding of that which affects their daily lives. The connection of real work to saving, to wealth creation is now in the hands of the bankster money creators, with the FED as the ultimate backstop.

It is that simple. If and when the implosion comes, it will be the biggest suprise in peoples eyes. This is what keeps the FED, Central Bankers and World Governments on perpetual edge. Were it to happen, they know they could not control man's animal spirits.


Tue, 04/29/2014 - 03:24 | 4706789 Strat-O-Sphere
Strat-O-Sphere's picture

Spot on JR. The real economy has been financialised, and manufacturing has been either dismantled or offshored to Asia. It seems that most "developped" western countries are doomed to become undevelopped at this rate. The worst thing is that this condition is completely self inflicted. Thanks so much western oligarchs, banksters and your puppet politicians whom some of us foolishly elect. 

Mon, 04/28/2014 - 19:16 | 4705749 blindfaith
blindfaith's picture

Hey Sunshine....


YOU are one of the LAST surviving credible guys to read, the rest have left the room.  To many hijackers now on Zero, spammers, and guys who have nothing to do but post spam.  I hardly read any replys now, glad I caught yours.

Mon, 04/28/2014 - 19:43 | 4705810 logicalman
logicalman's picture

As long as you have decent filters, ZH is worth a look, IMHO.

You just have to separate the wheat from the chaff.


Tue, 04/29/2014 - 00:02 | 4706518 G-R-U-N-T
G-R-U-N-T's picture

You can thank Robert Rubin influence on Slick Willie for repealing the Glass-Steagall Act, they're brilliant!

Tue, 04/29/2014 - 04:11 | 4706816 TruthInSunshine
TruthInSunshine's picture

The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, has been as destructive to the U.S. Economy as any single piece of legislation in a long, long time.

It has done more to break pricing of commodities (and ultimately, many asset classes, as commodity input prices go a long way to determining the price of many asset classes) based on true supply/demand as any single piece of legislation in history, has allowed for the further financialization & manipulation of pricing of everything from oil to corn, from live hogs to lumber, from metals to sheaf, and everything in between, and has led to extremely high volatility of prices as well as sustained high levels of real inflation of commodities, all things that it was allegedly & ironically (and disingenuously) pitched to prevent when being drafted and voted upon by the bought & paid for CONgress & signed into law by the equally bought & paid for TOTUS.

Mon, 04/28/2014 - 15:14 | 4704947 Unknown Poster
Unknown Poster's picture

As long as everyone is still standing they roughly cancel. But a big swing in rates or FX positions could put that in doubt.

Mon, 04/28/2014 - 15:15 | 4704949 nuclearsquid
nuclearsquid's picture

Can someone who knows something about derivatives please explain to me why GROSS derivative exposure is supposed to be frightening?  Is it really only concern about interconnected-ness, counterparty risk, and system complexity?  Or is there some way to quantify the increased volitility it projects onto NET derivative exposure?

Mon, 04/28/2014 - 15:27 | 4705003 Winston Churchill
Winston Churchill's picture

Put it this way.
Lehman Bros. only had a net $8bn in derivative exposure.
It turned out to be $795bn.
Nobody has the first clue what the true situation is, including the banks.

Mon, 04/28/2014 - 15:34 | 4705025 El Vaquero
El Vaquero's picture

Because all of the calculations of net risk assume that not one of the counterparties goes tits-up, like with Lehman and what AIG would have done without a bailout.  That, and if you look at the US situation, JPM, BofA, and Citi have crammed well over $100 trillion in derivatives into their deposit taking FDIC insured subsidiaries. 

Mon, 04/28/2014 - 17:03 | 4705386 resurger
resurger's picture

Remember when Kuruda said that he was ready to buy Derivatives and put them on the BOJ Balance sheet!




Mon, 04/28/2014 - 15:36 | 4705050 Tyler Durden
Tyler Durden's picture

As noted in the article you respond to, this may be a good link to start.

Mon, 04/28/2014 - 17:02 | 4705378 nuclearsquid
nuclearsquid's picture

sorry TD.  glanced over the link.  Keeping up with the Hedge while at work can be taxing.

keep up the good work.


Mon, 04/28/2014 - 20:01 | 4705865 logicalman
logicalman's picture

Worth going back and reading carefully.

Mon, 04/28/2014 - 16:06 | 4705168 Kayman
Kayman's picture


Look at it this way.  You have 70,000 pounds pressure pushing you from the left and 70,000 pounds pushing you from the right. In theory, you are in dynamic balance.  The problem is you are in the middle.


Mon, 04/28/2014 - 16:59 | 4705370 Volkodav
Volkodav's picture

uh, what about up and down? would you agree middle squeeze out in terrible mess?

Mon, 04/28/2014 - 20:34 | 4705957 lotsoffun
lotsoffun's picture

and then we take only about 1% of that away from one side. - and what happens?  applesauce?


Mon, 04/28/2014 - 16:13 | 4705204 seek
seek's picture

The counterparty risk you mentioned can turn zero net exposure into total gross exposure in the blink of an eye, and shouldn't be dismissed as easily as virtually everyone does dismiss it.

When you get into notional numbers that are 20X GDP, having a single counterparty that represents 0.01% of the notional can blow up the entire global economy.

Mon, 04/28/2014 - 16:25 | 4705242 Seer
Seer's picture


Do you realize how LONG it would take to unwind it all?  Who starts?  Seems everyone would want to jump to the front of the line in order to ensure that there will in fact be their money, and or to get things over so that whatever business is still possible when everyone's spending massive amounts of time trying to shuffle their papers can happen.

And during all the paper shuffling I'm sure that there will be many folks who expose themselves to hostile take-overs and or sabatoge (US/west companies might see a LOT of arrows being slung at them from the "barbarians").

Timely and orderly just don't seem to be two words that describe what is going transpire. Best hope is to consolidate really fast so there are less pieces to mess up the board...

Mon, 04/28/2014 - 20:03 | 4705868 logicalman
logicalman's picture

He who panics firs, panics best!


Mon, 04/28/2014 - 18:27 | 4705644 Stoploss
Stoploss's picture

1 - William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th

12 - Jan Peter Schmittmann, 57, the former CEO of Dutch bank ABN Amro found dead at home near Amsterdam with wife and daughter.

Mon, 04/28/2014 - 20:13 | 4705736 Deathrips
Deathrips's picture

Solution Time!


Just have tough ol Liz Warren flap her gums about nonsense. Someone I know sent this to me today saying that its time for some tough regulation. Then sends me this video.

If you feel like listening to a shill that has no idea the regulating and separating commercial and investment banks would literally implode a quadrillion dollar derivatives market, take a chuckle.

This is supposed to make me "feel" better. Fuck feelings. What am I? some, pussy bitch? WTF is wrong with these people.


Id feel better locked in a room of rabid monkeys on meth with loaded uzis, than taking this idiots suggestion.


FUCK..Conductor..We been sitting here for 50 years on the cliff....we gonna go for a ride or what?







Mon, 04/28/2014 - 22:55 | 4706363 Radical Marijuana
Radical Marijuana's picture



First, legalize creating "money" out of nothing.

Second, legalize gambling bets via that money.

In a while, the biggest banks' were gambling with 100 times as much money as would pay for everything in the real world, and they are headed towards pushing that to 1,000 times. OF COURSE, anyone who has the legal power to make "money" out of nothing is going to develop every possible excuse to do more of that. The biggest banks get to play games with each other, which allow them all to create more and more "money" out of nothing, in order to make gambling bets with each other, which bets were merely more excuses to make even more "money" out of nothing, as more debts, to gamble with more ...

And so it goes, while somewhere down at the bottom of that pile of "money" made out of nothing, as debts, to gamble with, are the billions of people who have to actually use that "money" to do things like buy food or fuel with. However, their role in the political economy has become almost totally negligible, compared to the biggest banks gambling with quadrillions against each other.

The billions of people who can not make money out of nothing are having their lives destroyed more and more by the rampaging rogue elephants of relatively small number of people that can make some significant amounts of "money" out of nothing to gamble with. Indeed, there is probably less than 1 individual in a 1,000,000 that are significant players in the games of making more "money" out of nothing to gamble with.

Meanwhile, it appears that less than 1 individual in 100 has the slightest clue about what it means that private banks are legally allowed to create the public "money" supply out of nothing, in order to then use that to make their bankster gambling bets in the tens of trillions, that all add up to quadrillions together! Somehow, the basic SOCIAL INSANITY of private banks being legally allowed to make the public "money" supply out of nothing, as debts, to be used by those banks to gamble with, manages to be something that the vast majority of people deliberately ignore, and want to continue to deliberately ignore. However, since all of the "money" that those ordinary people use to pay their bills is the same "money" that private banks create out of nothing to gamble with, governments consider it a matter of national security to keep that system going, despite that doing so constantly pumps up the collective systemic risks to even more astronomical sizes.

The price of food and fuel for billions of people is now relatively a trivial issue compared to the question of keeping the banksters' systems of creating "money" out of nothing to gamble with going! The rogue elephant is not really "in the room." That rogue elephant is actually too big to even be able to be standing on the planet Earth! The magical mathematics which is generated by the banksters' bookkeeping, which allows them to make "money" out of nothing as debts, has become electronic magimathematics whereby they have been able to create enough "money" to buy 10 planet Earths, while they are headed towards 100, or, if one blinks, then they are already up to 100, and headed towards 1,000. Meanwhile, the weapons of mass destruction which provide the threat of force to back up those frauds have also become sufficient to kill everybody at least 100 times over, if not 1,000, or 10,000 ... ETC.!

There is nothing remotely close to having a big pink elephant in the room, compared to what the banksters' magimathematics has achieved! No one human being has ever been able to become remotely close to being as INSANE as the human species as a whole has been able to become! It has taken tens of thousands of years of backing up frauds with force, to develop the collective levels of SOCIAL INSANITY that now dominate the established world systems, through the vast majority of the world's "money" supply being entangled in hyper-complex speculative bets, between the organizations that had the legal power to make that "money" out of nothing, in order to do that with!

Tue, 04/29/2014 - 04:42 | 4706830 Dubaibanker
Dubaibanker's picture

The good news is that we know DB has a USD 75 trillion exposure...but what is the bad news..i.e. what do we DON'T know about DB?

Today they have announced that by next week they will issue capital convertible bonds in 3 currencies: USD/GBP/EUR.

Question is: Why in 3 currencies? Do they have so much lending going on or do they have so many holes in all subsidiary balance sheets as well?

Mon, 04/28/2014 - 15:10 | 4704917 synergize
synergize's picture

Time for Greece (or Italy/France) to call EU / Germany's bluff by threatening to default.  I'm betting an amicable agreement will be reached where the ECB buys Greek garbage for a lot longer.

The power is in the hands of the debtor countries if their leaders only knew... (they probably do but they've been bought off)

Mon, 04/28/2014 - 15:16 | 4704953 Greyhat
Greyhat's picture

Greece is peanuts. What happens if Putin plays hardball with Deutsche Bank Russia? :D


Mon, 04/28/2014 - 18:17 | 4705604 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Exactly it would be a real problem if a bank with significant inside derivative exposure outside the Petrodollar Central Bank control system decided to go tits up either on purpose or otherwise.

Mon, 04/28/2014 - 15:17 | 4704958 max2205
max2205's picture

The snap backs and short squeezes are incredible today

Mon, 04/28/2014 - 15:22 | 4704982 dbTX
dbTX's picture

There's no one room that big.

Mon, 04/28/2014 - 16:03 | 4705150 madcows
madcows's picture

room's big enough for the A$$, it's the door that gets in the way.

Now, on the other hand, the whole white house can't hold their egos.  F the aristocrats.

Mon, 04/28/2014 - 22:22 | 4706295 williambanzai7
williambanzai7's picture

Mon, 04/28/2014 - 14:59 | 4704868 B2u
B2u's picture

Not to  worry...the IMF will bail them out...

Mon, 04/28/2014 - 15:21 | 4704976 Jonas Parker
Jonas Parker's picture

With what? Glass trade beads and pocket mirrors?

Mon, 04/28/2014 - 16:24 | 4705239 Gumbum
Gumbum's picture


Jim Richards have been going on about this for a while now. IMF has the only (somewhat) clean balance sheet when the next wave hits.

Perhaps they can re-liquify the world one last time.

Mon, 04/28/2014 - 17:34 | 4705491 mt paul
mt paul's picture

this glass blower

ready to work ..

Mon, 04/28/2014 - 15:00 | 4704870 The Axe
The Axe's picture

Good News  Bad news  DB   with that kind of leverage BD could almost buy Germany....

Mon, 04/28/2014 - 15:31 | 4705010 Almost Solvent
Almost Solvent's picture

Reminds me of the old saying:

Owe the bank $100,000 and it's your problem

Owe the bank $1,000,000 and it's their problem


Which banks have a problem? (Wait, they all do!)

Mon, 04/28/2014 - 15:01 | 4704872 Itchy and Scratchy
Itchy and Scratchy's picture

Raise the debt ceiling!

Mon, 04/28/2014 - 16:02 | 4705148 madcows
madcows's picture

Debt is the equivalent of MONEY.  Them Fricking Germans are rolling in Dough.

Mon, 04/28/2014 - 17:36 | 4705498 mt paul
mt paul's picture

lower the asset floor 


Mon, 04/28/2014 - 15:02 | 4704877 Xibalba
Xibalba's picture

Curious to know how many of those are gold certificates....

Mon, 04/28/2014 - 15:23 | 4704984 disabledvet
disabledvet's picture

This is an interesting comment.

"All of JPM's" no doubt.
Ahhh, "ye olde Banker's Trust." Worked great in the 70's...not so much this time because the GOVERNMENT is monetizing the debt...not Wall Street.

This is CROWDING OUT private investment "in lieu of a public/private partnership."

That leaves a PAUCITY of investable assets here as "liquidity starved America" can't even Buy a Thrill.

We can buy a war ironically enough. And this is growth positive because...

Mon, 04/28/2014 - 15:38 | 4705064 PontifexMaximus
PontifexMaximus's picture


Mon, 04/28/2014 - 15:02 | 4704882 madcows
madcows's picture

bah.  Fiat is worthless.  Thus 75 trillion is nothing.  A drop in the bucket.

Mon, 04/28/2014 - 15:03 | 4704883 h0oS
h0oS's picture

The Derivative debt doesn't matter, Germany has 3000 tons of gold... Our good friends at the Fed hold it at fort knox...Oh sheeeaaat!!!

Mon, 04/28/2014 - 15:04 | 4704896 THX 1178
THX 1178's picture

I'm genuinely curious- is there relly any good evidence that the gold at ft. knox has been sold into the market or wherever?

Mon, 04/28/2014 - 15:17 | 4704959 Bioscale
Bioscale's picture

Is there any good evidence what amount of gold is there at ft.knox?

Mon, 04/28/2014 - 15:35 | 4705045 Winston Churchill
Winston Churchill's picture

Indeed, if it was there, I'm sure they would gladly show us all, Strangely reticent.They should want to dispel these nasty

Mon, 04/28/2014 - 16:33 | 4705258 Seer
Seer's picture

Yeah, it's right there on the shelf next to the film of the airliner hitting the Pentagon!

Mon, 04/28/2014 - 19:51 | 4705826 h0oS
h0oS's picture

If you placed your gold in a vault and then asked to access it for audit purposes and you were refused, what you think?

Mon, 04/28/2014 - 20:09 | 4705886 logicalman
logicalman's picture

I might, just possibly, think there's a problem.

Mon, 04/28/2014 - 15:33 | 4705027 RougeUnderwriter
RougeUnderwriter's picture

Is this Basel II Solvency II related. IN Jan 2016 Cap requirements are going to get a lot tougher on risky asset bases. Many large firms are starting action now and the guidelines are requiring it.

Mon, 04/28/2014 - 15:03 | 4704887 okssjkee
okssjkee's picture


Mon, 04/28/2014 - 15:04 | 4704893 Chippewa Partners
Chippewa Partners's picture

Christine has it covered.  No worries.

Mon, 04/28/2014 - 15:26 | 4704997 disabledvet
disabledvet's picture

She'll be the first jumper in the door when the airborne lands in Moscow.

And Cairo.

Mon, 04/28/2014 - 15:04 | 4704895 LawsofPhysics
LawsofPhysics's picture

It has long been my theory that the bankers (and other useless fucks in the "financial sector") will get together and agree to "dissappear" or "retire" all these derivatives.  They will do two things first;

1) Buy congress and pass a law making this legal (they have done this before, just ask John Corzine)

2) obtain title to numerous physical assets and productive capacity (they are still doing this and it's the only reason I can think of as to why they keep manipulating the markets)

Once they have title and know they won't get in any real trouble, then and only then will they let a "reset" occur.

Mon, 04/28/2014 - 15:08 | 4704916 Grande Tetons
Grande Tetons's picture

Exactly, this derivative number gets thrown around  all the time. The market does not give a shit. I could be twice the current amount...and...we would see the same reuslt.  One day it will matter...or it will not...for reasons that you have mentioned. 


Mon, 04/28/2014 - 15:10 | 4704922 fonzannoon
fonzannoon's picture

As if to illustrate your point the stock is in the green right now.

Mon, 04/28/2014 - 15:22 | 4704951 Grande Tetons
Grande Tetons's picture

Never under estimate the power of Moochelle's ass. 

All jokes's close illutrates many points as well. Not the least of which is that shit fundmentals do not matter. 

Mon, 04/28/2014 - 15:24 | 4704991 aleph0
aleph0's picture

You mean like the ESM ... which has just become law = Debt Union = Little People Pay.
.. Oh , and Direct "Depositer Bail-Ins" as well of course.

So what . the EURO ITSELF is THE BIG FINANCIAL WMD ... designed to explode Europe apart .. politcally.

Mon, 04/28/2014 - 15:56 | 4705133 El Vaquero
El Vaquero's picture

IMO, doing that would wipe out what little faith there is left in our financial system, and thus the dollar.  But not doing it would too. 

Mon, 04/28/2014 - 19:45 | 4705814 MeelionDollerBogus
MeelionDollerBogus's picture

No need for faith when you can just chain people to it.

Mon, 04/28/2014 - 17:53 | 4705565 zerozulu
zerozulu's picture

Or put state of Nevada as collateral.






I'm not sure what I'm saying

Mon, 04/28/2014 - 15:05 | 4704898 Oh regional Indian
Oh regional Indian's picture

The 4th Reich rules through Debt and Destruction....

Mon, 04/28/2014 - 15:17 | 4704901 McMolotov
McMolotov's picture

What could possibly go wrong?

edit: And +1 to Tyler for the word "promptlier."

Mon, 04/28/2014 - 19:43 | 4705809 MeelionDollerBogus
MeelionDollerBogus's picture

My vocabularium has been moar embiggened.

Mon, 04/28/2014 - 20:11 | 4705891 logicalman
logicalman's picture

I thought that was a person that lied on time!

Mon, 04/28/2014 - 15:08 | 4704903 kurt
kurt's picture

DoucheBank has done well compared to the US with its QUADRILLIONS in Deriviatives!

Mon, 04/28/2014 - 15:06 | 4704906 MFL8240
MFL8240's picture

JP Morgans is higher!

Mon, 04/28/2014 - 15:29 | 4705008 SheepDog-One
SheepDog-One's picture

Yea why is it we only hear about Deutschebag Bank as if JPM GS WFC BOA etc all don't have massive derivatives exposure anymore?

Mon, 04/28/2014 - 17:25 | 4705458 Seer
Seer's picture

Perhaps it's because everyone knows the US is fucked and no one seems to believe that Germany is also fucked (I'd stated so nearly two years ago).

Mon, 04/28/2014 - 21:47 | 4706168 cynicalskeptic
cynicalskeptic's picture

Is USA #1 or not?   I'm confused..... surely all the US banks have a much larger exposure than the German ones?

Mon, 04/28/2014 - 15:07 | 4704912 the not so migh...
the not so mighty maximiza's picture

wow its bigger then Merkels ass, i did not thing anyhting could be bigger then Merkels ass

Mon, 04/28/2014 - 15:49 | 4705111 headhunt
headhunt's picture

0bamas ego

Mon, 04/28/2014 - 17:26 | 4705464 Seer
Seer's picture

It's not his.

Mon, 04/28/2014 - 20:26 | 4705934 lotsoffun
lotsoffun's picture

hillary.  at least merkel doesn't pretend at being anything other than a politician.  hillary want's to play at being hot - both on the milf loving and lesbo teams to earn more votes.


Mon, 04/28/2014 - 23:58 | 4706510 Slave
Slave's picture

Obama's asshole.

Mon, 04/28/2014 - 15:09 | 4704920 ronsterizor
ronsterizor's picture


Mon, 04/28/2014 - 15:10 | 4704925 JustObserving
JustObserving's picture

Luckily, Deutsche Bank never makes any calculation mistakes like Bank of America.  So relax, all is well.

Mon, 04/28/2014 - 15:10 | 4704926 youngman
youngman's picture

JPM is only 2 trillion in synethetic derivitives short to be the winner....go Jamie GO..yo can do it..screw the pooch

Mon, 04/28/2014 - 15:10 | 4704928 Seasmoke
Seasmoke's picture

Just make 75. Trillion dollar coins. Problem solved. (Until the next problem) 

Mon, 04/28/2014 - 16:00 | 4705145 CHX
CHX's picture

They're called gold coins

Mon, 04/28/2014 - 17:11 | 4705409 1stepcloser
1stepcloser's picture

I have some Zimbabwae currency...I think i have that in pocket need to make any coins

Mon, 04/28/2014 - 21:51 | 4706186 cynicalskeptic
cynicalskeptic's picture

I have the feeling that Zimbabwe's  $Zim100 trillion note will have lots of company when things finally hit the fan.  Fiat notes are all going to have LOTS of zeroes.

Mon, 04/28/2014 - 15:11 | 4704932 SillySalesmanQu...
SillySalesmanQuestion's picture

Lets see them unwind this weiner schintzel.

Mon, 04/28/2014 - 15:17 | 4704955 CHX
CHX's picture

Instead of WIENER Schnitzel, it's rather a HAMBURGER or a Berliner...

Mon, 04/28/2014 - 16:01 | 4704992 McMolotov
McMolotov's picture

"Ich bin ein Wiener Schnitzel." —JFK

Mon, 04/28/2014 - 16:07 | 4705171 pods
pods's picture

Die Kacke ist am Dampfen.

(only german I know, but I would love to learn it. It would be really fun to chew someone out in German)


Mon, 04/28/2014 - 15:35 | 4705046 Kirk2NCC1701
Kirk2NCC1701's picture

[cue song] "I found my thrill... on Hamburger Hill..."

Mon, 04/28/2014 - 15:13 | 4704940 Flying Spaniard
Flying Spaniard's picture

Notional amounts are not exchanged... so not sure what the article intends to achieve here. I think the REAL elephant in the room is actually in the detail of those contracts. What would the MV be should interest rates increase, or the market tanks 10%. I would be more interested to know that.

Mon, 04/28/2014 - 15:21 | 4704975 lasvegaspersona
lasvegaspersona's picture


read the manual....rates cannot go up and prices of equities cannot go down. Heard that on TV or somewhere...

Mon, 04/28/2014 - 17:29 | 4705472 Seer
Seer's picture

"I think the REAL elephant in the room is actually in the detail of those contracts."

Like I'd said earlier, the problem will be that of TIME, time to figure out how to unravel things.  Of course, unraveling isn't going to happen.  Uncle Warren told us how it's going to happen...

Mon, 04/28/2014 - 17:40 | 4705516 mt paul
mt paul's picture

when dealing with elephants

it is not wise to do so


with peanutz in your pockets 

Mon, 04/28/2014 - 18:22 | 4705631 scaleindependent
scaleindependent's picture

What did uncle warren say?

Mon, 04/28/2014 - 20:14 | 4705899 logicalman
logicalman's picture

I love the term 'notional value'

It describes things perfectly - the value is just a notion.

Mon, 04/28/2014 - 15:17 | 4704957 dontgoforit
dontgoforit's picture

Oh, God.  This is gonna' really hurt. 

Mon, 04/28/2014 - 17:31 | 4705476 Seer
Seer's picture

You can make it sound better by repeating "Oh, God" several times before saying "This is gonna' really hurt."  And looking at the MSM today I'm thinking that that's been their approach...

Mon, 04/28/2014 - 15:19 | 4704963 Bill of Rights
Bill of Rights's picture

Wake me when it reaches Googol..

Mon, 04/28/2014 - 20:16 | 4705904 logicalman
logicalman's picture

I think it will be a while.

Even the Fed would have trouble.

Not enough hard drive space on the planet to come close to storing the mighty Googol!


Mon, 04/28/2014 - 15:20 | 4704964 NaiLib
NaiLib's picture

Seems this is our next "Whale".... and perhaps the explanation why indices are not allowed to fall

Mon, 04/28/2014 - 15:20 | 4704967 lasvegaspersona
lasvegaspersona's picture

If things get rough maybe they can hit up Tim 'deniers should not buy Apple' Cook for a part of the 17 billion he is seeking. After all borrowing from the productive people of the world is the real way to riches in our new glorious age.

Mon, 04/28/2014 - 15:20 | 4704968 madbraz
madbraz's picture

Wouldn't surprise me one bit if both Deutsche Bank and JP Morgan's derivative books are just "instruments" used by the NY Fed and the ECB to hold the Euro steady and to transfer funds between the great pond.

Mon, 04/28/2014 - 18:20 | 4705624 Mediocritas
Mediocritas's picture

Last numbers I have are a bit stale, but by now I'd guess that foreign exchange swaps, and related derivatives stand at about $US 200 trillion notional, globally. These are often chained to other derivatives that are susceptible to exchange rate volatility, such as international interest rate swaps [ ].

The interest rate derivatives market is a monster at ~$US 500 trillion notional. Plenty of room for your conspiracy theory to be a conspiracy fact.

Mon, 04/28/2014 - 15:21 | 4704970 CHX
CHX's picture

Even with a printing press having your back, one has to wonder how many times these guys can just litterally double down to stay afload. I think the big 5 in the US also collectively hold several 100 T in derivatives, so we have the same thing in EUSSA... ECB and FED you have LOTS to do. Long ink and toilet paper.

Mon, 04/28/2014 - 17:24 | 4705452 El Vaquero
El Vaquero's picture

$225T for the top 5, with the US total being$237T, and that's just the shit we know about.


EDIT:  Misread your post.  Fixed it.

Mon, 04/28/2014 - 15:20 | 4704971 Soul Glow
Soul Glow's picture

BAC down 7% today.  Just sayin'.

Mon, 04/28/2014 - 15:21 | 4704972 SheepDog-One
SheepDog-One's picture

Deutschebag banks derivatives just need an American stawk P/E, 20 is a bit low by our standard lets set it to 80 then they can get about 300 Trillion and call it reasonable.

Mon, 04/28/2014 - 15:26 | 4704996 RougeUnderwriter
RougeUnderwriter's picture

This is all Basel II Solvency III relating. All of the bigs will be raising Tier 1 Capital to deal with strict Jan 1, 2016 changes.

Mon, 04/28/2014 - 16:10 | 4705182 22winmag
22winmag's picture

Basel II is like putting a Band Aid (tm) on someone who just got their legs bitten off by a shark... the patient is still going to squirt blood and die.

Mon, 04/28/2014 - 17:45 | 4705523 mt paul
mt paul's picture

but the shark

will be happy

and well fed...


 no pun intended

on the 'fed' thing

it just showed up ..

Mon, 04/28/2014 - 19:33 | 4705781 MeelionDollerBogus
MeelionDollerBogus's picture

but wait! Now from you can get Bandaidogami! The magical bandaid that unfolds to the size of 10000 bandaids, nano-thin membranes to cover even a bleeding stump and/or TEPCO-assured to block radiation.

Mon, 04/28/2014 - 17:57 | 4705575 Mediocritas
Mediocritas's picture

The same Accord that was meant to be implemented in 2013 but kept getting watered down and pushed back (now 2018).

I wouldn't count on it if I were you. The MegaBanks are in no shape to conform any time soon, so they won't be asked to.

Mon, 04/28/2014 - 20:18 | 4705911 lotsoffun
lotsoffun's picture

rougeundwriter - right.  sure.  just like bank of america today declared some shit so bad that since 2009 (nobody knew about it, yeah right), decided that the shit was bad enough, maybe they should make it public now and pull back billions in proposed dividends to share holders.

'raising tier 1 capital to deal with ....'  it's a hoax.  it's all gone, poof - corzined.  the question is when it comes out.  tomorrow our 2114?


Mon, 04/28/2014 - 15:34 | 4705043 f16hoser
f16hoser's picture

That's a lot of "Sour Kraut!"

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