Will Deutsche Bank's Collapse Be Worse Than Lehman Brothers?

Phoenix Capital Research's picture

Few analysts noted it, but the $USD actually staged its second strongest day of the year the Friday before last.

The only other day in which the $USD rallied more was on the day of BREXIT, a black swan event that featured EXTREME currency volatility.

This move tells us something BIG is afoot “behind the scenes” in the financial system

I believe that something is a banking crisis in the EU. The clear signal is coming from Deutsche Bank (DB).

DB is the proverbial “canary in the coalmine” for Europe. Perched atop the largest derivatives book in Europe, DB has ties to most major financial institutions in the region.

Which is why as soon as DB starts nose-diving, you know something big is up.

DB shares are down 16% since September 15th and nearly 20% from September 9th. Put another way, this bank has lost a FIFTH of its market cap in less than two weeks.

Bear in mind, Deutsche Bank is considerably larger than Lehman Brothers. It’s derivatives book is 20 times German GDP.

And the long-term chart is VERY disturbing.

We believe the global markets are on the verge of another Crisis.

2008 was Round 1. This next round, Round 2, will be even worse.

If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

As we write this, there are less than 100 left.

To pick up yours, swing by….


Best Regards

Phoenix Capital Research

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GoldIsMoney's picture

To answer the headline. Yes. Undoubtly, anyay Lehmann was not big enough not to fail. I bet DB will.

medium giraffe's picture

usury systems are inherently terminal. ditto fractional reserve. it's already over.

1980XLS's picture

Achtung Baby!


Fuck Him.  Facebook too.




JailBanksters's picture

It won't be worse, it will be better, much better

Better because I hate these greedy corrupt fraudulent entities called Banks

Today they have a market cap of 16 Billion and Debt over 1 Trillion,

you wouldn't want to be the last share holder holding the bag.


GreatUncle's picture

Round 2 worse than round 1 ??? Would never have figured that.

Well the CB's did pump trillions into economies through QE to support bad debt ... most of that QE has to burn now because it was thrown at bad debt to become ... you guessed it ... more bad debt. (Think a malinvestment that was never going to pay out).

Now they have a choice as they had in 2008, rinse repeat or allow values to fall to 0 as all the bad debt "poof" immediately vanishes in the collapse of a debt singularity and the rest of the known human universe with it.

Nah ... they will print, and print, and print, ... even to attempt a major war with China and Russia is dangerous not militarily though. They must never let mark-to-mark real price discovery ever come into play because if they do everything goes to nohing, zero, nardah, zilch.

theprofromdover's picture

Nobody can bail out DB?

That isn't going to stop them doing something stoopid, and trying.

Draghi is just itchin' to do maximum damage, he'll take everyone down with him.

Goldbugger's picture

No body can bail out DB, it's the tip of the iceberg. The unfunded liabilities are in the Trilions.

lasvegaspersona's picture

If interest rates can go negative...why not the share price of banks?

We live in an Alice (Cooper) in Wonderland world!

lemosbrasil's picture

Its not just usd index.....see below the amazing movement up of TED Spread....It was from 45-50 until 70 points in just 45 days..

There is a great serious problem inside of european interbank market.....

See here:http://pracompraroupravender.blogspot.com.br/2016/09/tictactictactictact...



rosiescenario's picture

I've had leap puts on DB since last year and have peeled off some profits and let the rest ride....just by way of background.


If the German government were forced to bailout DB they should do it through a purchase of DB's stock at a very, very low price. In that fashion the current shareholders of DB suffer (as they should), the innocent depositors are left whole, management holding stock options and stock suffer (as they should), and at least the German government has a stock investment to show for the bailout so their tax payers (unlike the US ones during our bailouts) sort of get something rather than nada.



GoldIsMoney's picture

That is not logiical. If the bank is bought the share holders will get money. If the bank will go further down, the share holders would loose everything. So it's a win for the share holders of the state does buy the stocks and it will be an incredible large loss for the tax payers of the bank goes down.

And the tax payer looses every ¢ the govermennt spends on the stock.  You are wrong and should rethink what  you wrote.

Dangerclose's picture

Buy those puts while you can!! Pick up a Jan 17 $4 strike for 20 cents and when it goes "lehman" on us, you have made 20X your money. Just like the Big Shorts did on the housing market.

Kefeer's picture

Is that investment advise?  Deutsch bank is cannot be allowed to fail and everyone knows this unless the so-called "reset" is upon us, which may very well be in which case I do not believe it will matter.  I'd get the DB JAN 19 2018 5.00 P just to be safe if I were to take the advise you offered; this is not investment advise.

Bastille Day's picture

How can they possibly be rescued?  With 20x German gdp and a loss of confidence in in cb, shit, don't me wrong, they'll try, they'll pull out all the stops, but DB is going to "naturally" descend to earth in a flaming ball of shit!

RadioFlyer's picture
RadioFlyer (not verified) Sep 26, 2016 11:32 AM

munch, munch, munch, munch. need more butter.

nmb's picture
nmb (not verified) Sep 26, 2016 11:22 AM

Let me put it this way: Lehman will look like a walk in the park on a sunny day.

slobbermut's picture

No way in hell does Merkel allow D.B. to go down......well, only in my wildest dreams maybe.

richCat's picture

Don't think Merkel and probably Schäuble quite realise the contagious mess...and that Draghi sending out signals that ECB has done enough of it's QE task and veering away to force issues, that now it's up to the governments that make up the Union to create incentives and reforms to push their economic coals to get economies running. It's not happening is it. Everyone in banking has become complacent, familarity breeds contempt in waiting for mother ECB to run and set the show...and now that's about to change. Big show coming up if Merkel holds ground, or a massive U turn 'in alias' be contempt of EU rules. Brexit will become a small side show. Will Schäuble give 'one cent more' for Deutsche bank ? Sorry Greeks.

Bastille Day's picture

They know.  Why do you think the financial world is in an alternate universe?

CuttingEdge's picture

It depends. On collapse, if DB have to balance their derivitives ledger negatively what level of variance becomes too big for Merkel to stomach?


crazytechnician's picture

It's mathematically impossible for Germany to bail out DB. Unless they want to borrow 20 x the entire German GDP from the ECB or Fed to do it. That would be Weimar Mk II , the end of the Euro.

GoldIsMoney's picture

Well if that would be ethe end of the Euro or EU that would be a win in my eyes. But I'm sure as day turns into night it will get  very nasty times. Maybe you should pick up your history book and look for "civil war".

crazytechnician's picture

The civil war started in 2008. Brexit was just one symptom. The breakup of the EU is certain. Just a case of where the chips fall now. Not much to say really apart from get out of the system as much as you can. Find a couple of lifeboats, my fav. is bitcoin.

GoldIsMoney's picture

Yes you can writ that also, so civil war it is ....

richCat's picture

It's the timing all wrong and unfortunate....that bn's US justice fine and the uncertainty of it's implications that rattle investors and credibility. There's an issue here in Germany that no-one wants someone elses home laundry to sort out; political dynamite if one cent of Cypressing is levied on the ordinary population. And there's DeutscheBank Austrian branch banks in the firing line too. What Draghi is really saying that what is happening isn't European at all. The project has failed as Banking has become a victim as with all the unresolved sovereignity issues for a unification to work; all remains as far apart as ever.

crazytechnician's picture

banking was bound to become a victim , the EU was always a political project. Trying to mix good finance and good politics is like trying to mix good religion with good science , or oil with water. Never a good combination.

TheObsoleteMan's picture

I remember back in 2008 when all hell was breaking lose, I had a shit load of puts on DB because it had invested heavily in our shit housing paper. I think I remember them being right in there with Bear-Stearns for exposure, I was surprised they didn't take any worse of a hit at the time than they did. Later I learned they were one of the foreign banks Bernanke had thrown a life line to {remember that?}, the others being HSBC, UBS, RBS and Societe Generale. Well, it looks like it is finally catching up with them. Too bad I no longer play that game anymore. You never know when they are going to announce another swap, and the stock will pop 50% in one day.

ebworthen's picture

I'd pray for DB to face-plant like Hitlary at the next two debates, but they'd just be bailed out on the taxpayer's and future generations backs for the sake of a golden toilet and some whores and coke just like 2008-2009.

I'll pray instead for guillotines and hempen rope and lamp posts for the wicked in the corridors of power.

Sandmann's picture

Christine Lagarde was French Finance Minister begging Payulson to TARP AIG - the only insurer bailed out - because it had so much exposure to SocGen.