Euro “Might Start To Unravel” If Collapse Of Deutsche Bank

GoldCore's picture

The euro "might start to unravel" if Deutsche Bank collapses according to respected financial journalist Matthew Lynn. "It all has a very 2008 feel to it ..." he warns in the Telegraph where he outlines his growing concerns about Deutsche Bank, concerns we have written about in recent months. He writes:

Our image of German banks, and the German economy, as completely rock solid is so strong that it takes a lot to persuade us they might be in trouble.


And yet it has become increasingly hard to ignore the slow-motion car crash that is Deutsche Bank, or to avoid the conclusion that something very nasty is developing at what was once seen as Europe’s strongest financial institution. Its shares have been in free-fall for a year, touching a new low of 10.7 euros on Monday, down from 27 euros a year ago. Over the weekend, the German Chancellor Angela Merkel waded into the mess, briefing that there could be no government bail-out of the bank.

But hold on. Surely that is an extra-ordinary decision? If the German government does not stand behind the bank, then inevitably all its counter-parties – the other banks and institutions it deals with – are going to start feeling very nervous about trading with it. As we know from 2008, once confidence starts to evaporate, a bank is in big, big trouble. In fact, if Deutsche does go down, it is looking increasingly likely that it will take Merkel with it – and quite possibly the euro as well.

Merkel is playing a very dangerous game with Deutsche – and one that could easily go badly wrong. If her refusal to sanction a bail-out is responsible for a Deutsche collapse that could easily end her Chancellorship. But if she rescues it, the euro might start to unravel. It is hardly surprising that the markets are watching the relentless decline in its share price with mounting horror. 

GoldCore: Warren Buffett Quiote

We have warned about Deutsche Bank and its massive derivative book and potential insolvency for many months now - see
Fed's Annual Stress Tests: Deutsche Bank & Santander Fail 
CEOs of Deutsche Bank “Shown Door” – Trouble Brewing at World’s Largest Holder of Derivatives?

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Secret Weapon's picture

"Start to unravel---"  Dude, put on your glasses.  There are loose threads all over the place.  The Euro is more tattered than the knee pads on Obama's favorite pair of jeans. 

innertrader's picture

The EU has been unraveling since the day it was created. It's been a complete disaster and this disaster is far from over!!! The NWO created this mess, but they can't clean it up!!!

CuttingEdge's picture

"I'm SURE that Merkel's 'refugees' will begin to help the Eurozone economy, soon.

They will do all those jobs that Europeans won't."

You really have no idea what Merkel has brought in, Monty?

Here's a little story to enlighten you. A guy I know, Indian, and 100% great guy, is a tanker captain, the big ones, and spent the past 35 years all over the world. The one thing he said a long time ago sticks with me: With knowledge of the hundred odd countries he has spent business time in, he came to the conclusion that your basic Arab is the laziest bastard on earth, and by a fair distance.

That is what Merkel has imported en masse. And probably the reason none of Germany's corporates has taken on more than a handful.

luckylongshot's picture

The sooner the Euro dies the better. The whole thing was only ever intended to allow the Rothschilds to take the EU by the throat and drain its wealth. I will certainly be celebrating if the Euro fails- a small victory for freedom.

MontgomeryScott's picture

This 'Matthew Lynn' is a very astute 'financial analyst'. Am I being sarcastic? You bet your ASS I am!

The Euro is made up of all the currencies (or all the economies' values) in Europe (kind of like a regional version of the IMF's 'SDR').

WELL: Britain is now on the way OUT (they were never really 'IN' to begin with).

The German MARK was the STRONGEST 'full member' in this. If Deutschebank fails, the Deutschemark goes WAY DOWN (in notional value).

WELL, there's still the French Franc, and the Italian Lira, and the Greek Drachma, and the Swedish Kroener...

I'm SURE that Merkel's 'refugees' will begin to help the Eurozone economy, soon.

They will do all those jobs that Europeans won't.

Deutschebank's exposure to the derivitaves market is larger than the entire GNP of GERMANY (INCLUDING ALL ASSETS HELD BY THE GERMAN GOVERNMENT). 

I can see the 'bois' in Brussels now, setting up a 'German Bailout'. BOY HOWDY! If you thought Cyprus or Greece was bad...

('Guido, you got the contract ready yet? Yeah, boss.')

MAYBE the new SDR to be announced on Friday, 30 September, 2016, by the IMF (which includes the Yuan, 11.1%) can be of some assistance, eh, Herr Merkel?


Yup. This 'Matthew Lynn' sure is a 'Johnny-on-the-spot' regarding these issues.

LEHMAN BROTHERS wasn't even a BANK (in the REAL SENSE), and it wasn't the largest bank in a 'Western' nation. It was simply an INVESTMENT HOUSE that specialized in stuff like DERIVITAVES. I mean, you couldn't go in and open a savings account and get a home loan or a car loan with these guys (and they couldn't create the money for your loan with a few keystrokes). The ENTIRE WESTERN BANKING SYSTEM WAS HOURS AWAY FROM TOTAL COLLAPSE when THEY went down...

It's THE BIG FLUSH. We WERE on the RIM (back in '08), but NOW we are in the WHIRLPOOL with the SHIT and the TOILET PAPER and the PISS.

Matthew Lynn thinks that the Euro currency MIGHT have a small issue or something (possibly).

Huh Reeeally's picture

I agree with your analysis of where we are today, in the whirlpool, but...

The German MARK was the STRONGEST 'full member' in this. If Deutschebank fails, the Deutschemark goes WAY DOWN (in notional value).

WELL, there's still the French Franc, and the Italian Lira, and the Greek Drachma, and the Swedish Kroener...

We can buy them on eBay, but that's about it, there have been no national currencies in the euro zone since the euro was introduced in 2002. Germans can still trade their D'marks in for euros, they just can't spend them. 

If Greece had a viable currency they could have done a Grexit, but no western country was going to support an independent Greek currency so whatshisface sold out the voters and chose austerity, oops, make that giving away their resources to Brussels and their grubby bankers.

richCat's picture

The refugee & migrant issue has backfired...a Merkel backtrack & mistake. What Matthew Lynn doesn't mention is that Germany should somehow exit from the common currency.....but it won't happen as this would fracture the franco-germanic alliance and the € would flop. However, if Germany introduced an imaginary Euromark it would create massive spot interest, but Club Med would have a sigh of relief, away from austerity imposed Teutonics.


The Management's picture

This all started when Deutsche Bank asked Deutsche Bahn for chart analysis.