Presenting Deutsche Bank's Pitchbook To The ECB To Go "All In"

Tyler Durden's picture

Say you are the CEO of Deutsche Bank (whoever that may be these days following Ackermann's stunner of an announcement yesterday), and you have so much dirty laundry that if the market so much as looks at you funny, you know very well it is game over the second you have to engage in reactionary damage control. After all your assets are 84% if not more, of total German GDP and there is no way that you can be bailed out by one country alone, even if that country is the only one that is not a complete Banana republic. So what do you do? Why you tell your bankers to write the best, most persuasive pitch book they can come up with, addressed to none other than Goldman Sachs alum and ECB head, Mario Draghi, and you tell him the truth: "Europe has hit its Tipping Point" and it is now or never. In other words, in 51 slides, your task is to convince the ECB that unless they terminally break away with their traditional stance of not monetizing, not only they, but the entire European status quo will cease existing. And that's precisely what you do. Behold: "The Tipping Point - Time To Call The ECB" - Deutsche Bank's definitive attempt to encapsulate the Mutual Assured Destruction that we are "certainly" all going to suffer, unless the ECB prints, and prints, and prints. The bottom line, you would tell Draghi, is "do nothing, and pull the cord now; or do something, risk hyperinflation which may or may not come, but at least extend and pretend for a few years." And one wonders why Crude is about to pass $100...

Cutting straight to the chase, here is Deutsche Bank's summary conclusion on why the Tipping Point is here:

  • Markets have lost confidence in the EU's institutional structures and framework
  • Italy represents a critical new and dangerous phase of the crisis (the "Tipping Point")
  • Italy and Spain have € 300 bn and € 120 bn of 2012 issuance (€ 930 billion combined over next 3 years)
    • Italian sovereign bond market is broken
  • The "stakes" have never been higher (including the fate of the Euro itself)
  • Politics has become “the” obstacle: All 5 "peripheral" countries have had leadership change in 2011
  • The economy (recession) has become “the” unknown variable
  • Continued Euro bank sector de-leveraging likely under almost any scenario (over $2 trillion estimate for next 18 months)
  • Longer term, external (current account) deficits matter more than fiscal deficits

And here is what DB thinks has to be done right now.

  • More progress on credible fiscal austerity (especially Italy)
  • Rapid resolution of the EMU's original sin - lack of fiscal integration (Dec 9 EU Summit meeting)
  • Restore confidence to re-open bank funding markets
  • Time to expedite the "Grand Plan"
    • Larger Greece debt restructuring
    • Bank capital raises and debt guarantees
    • Additional bail-out funds for Greece
  • Time to call the ECB
    • Investor reluctance on EFSF € 1 trillion leverage plan
    • Ineffectiveness of ECB monetary policy transmission mechanism to keep bond yields low
    • Adjustment away from current bond purchase program needed (away from temporary, limited and sterilized)
    • ECB should announce large, targeted buying plan (i.e. € 200 bn over 12 months)

Or advice (as always): buy. gold. now. (and not the MF Global paper version, please)

Takeaways from the SNAFU are hardly surprising:


But the risks remain considerable:

And returning to a much discussed topic - why has the EUR held up so strong?

But there is plenty of downside risk to come potentially:

 DB Tipping Point Nov 2011 FINAL

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Commander Cody's picture

The rats keep begging for their spiked cheese knowing that sooner or later its gonna kill 'em.

gmrpeabody's picture

"And one wonders why Crude is about to pass $100..."

Amen, brother.

Mike2756's picture

Looks like that $100 oil isn't sitting too well with mr. market.

BaBaBouy's picture

Print Yo Bitchez, Print ...


And Run To Pappy, eh, GOLDie ...

BaBaBouy's picture


  Fed's Fisher repeats call to downsize big banks



AND no-ones listening.

Hehehe, hell they are piling on more TRILLIONS of OTC Toxic SHIT as we speak.


Same SHIT as 2008, except its not GWB, butt The Bummah that will bail out all the banks again.

DoChenRollingBearing's picture

Tyler above himself just said:

buy. gold. now. 

Texas Ginslinger's picture

Silver bullion or gold, right...???????

GeneMarchbanks's picture

$100 will be crossed this week followed by a sovereign downgrade(can't say which one) then all bets are off... literally. All this begging for € QE makes me want to put on some Lehman 2.0 trades... just to be contrarian. That's right, Hendry style bitchez.

Hard1's picture

Translation of the reaserch piece (from German):  Dear all at the ECB:   As you are well aware, we, the german banks, as well as our french counterparts hold so much italian debt that we are insolvent as of a couple figures ago.   If you don't monetize this debt now, you will be personally responsible for our bankruptcy.



DB management.

PS We are sending this letter through our reaserch arm to mantain the formalities.

PS2: According to our calculations, if you don't act now US banks will indirectly go bust based on the exposure they have to us and our aforementioned french colleagues.  You will be also responsible for that.

Eally Ucked's picture

It passed 100$ long ago, just thanks to Canadian Gov. you have it so cheap. If they decide to sell it West and East by building pipelines to the left and right you'll enjoy much higher prices. But it takes few years. For now Canadians play old time idiots which is is consistent with their gov mind set. 

SheepDog-One's picture

All it takes for oil to go up $50-$100 overnite is 1 sunken carrier in the Straits. We're living in times now where thats entirely likely.

hunglow's picture

Much easier to turn a tanker into a submarine.

High Plains Drifter's picture

so easy to with sunburn sea skimming anti ship missles..........

Oh regional Indian's picture

Very interesting, this oil subsidy gimmickery. PPP is a joke. A total joke.  And agro subs in USSA.

Anyways, on topic, very interesting, Ackerman is bieng replaced by two people? And one of them is an Indian.

"Ackermann will step down as chief executive as planned in May, to be succeeded by Juergen Fitschen and Anshu Jain."

What is with all these Indians in high finance positions?



Mandelbrot Magic


topcallingtroll's picture

You guys work cheap and are good at math.

The first generation or two out of poverty think computers or engineering or medicine is a good career. Families quicklie realize that is just another form of wage slavery.

The next couple generations with dads and moms who are engineers and doctors will skip the bullshit and go into finance/money related operations.

Eally Ucked's picture

Bravo! The American way, not only the fittest will survive but costs will be cut to minimum.

nope-1004's picture

The banksters have 2 choices:

Print -> inflate -> continue pillaging -> disintegrate


Do nothing -> relinquish control -> give up.

Kinda obvious what they'll do.


NotApplicable's picture

Don't forget, ZIRP4EVA. Otherwise, the pillaging quickly consumes itself.

ZIRP is the can made for kicking!

vast-dom's picture


Caviar Emptor's picture

Get it yet? They want ECB (the public) to become the bag holders for their worthless crap. Just in time for Xmas too

philipat's picture

DB (Douche Bag?) knows it can't appeal to Merkel, because she wants to get re-elected. So instead they appael to the un-elected transnational ECB. Isn't democracy a wonderful thing?

PS. It's almost bonus time so would you please move quickly.

CPL's picture

So this is why the market bounced like a rubber ball on no news and no volume.


Thank goodness our betters are here to aid us in our time of need.


If anyone cares, FAZ and TZA are at their entry a the markets are stupid.

The Axe's picture

Hate to go off topic, but has anyone else been watching the big divergence in the price of Nat.Gas and crude.  Natural Gas is falling all year in price and just hit a 52 week low, yet still a lot of very rich natural gas stocks out there. This is the biggest spread I have seen between wti and ung in forever...?  strange

Mike2756's picture

You're right, sell uso and buy ung?

kaiserhoff's picture

Not surprising at all.  Supply of NG is essentially unlimited in North America.  Pubama and the tree huggers are fighting a losing colonial war against the conversion, because they prefer windmills and unicorn farts for fuel.

TheFourthStooge-ing's picture

Hey, if it worked for Hank Paulson (and he's not in jail) ...


Sudden Debt's picture

Just a few more seconds...
..... ....

I'm save, my family is save and I'll move out if the shit hits the fan. Somewhere warm. Azia.

kaiserhoff's picture

Save Russian Jews.  Win valuable prizes;)

I've always wanted to see the South Pacific...

GeneMarchbanks's picture

Leeroy Jenkins.

'Or advice (as always): buy. gold. now. (and not the MF Global paper version, please)'

Speaking of MF, Jesse has been all over it like a fat kid on cake.

Via Jesse Cafe:


'MF Global has the wafting odour of scandal that keeps on intensifying.

I cannot wait to find out the whole truth. But that might have to wait for kingdom come, if it is in the same justice delivery system as the silver manipulation inquiry.'

Ponzi Unit's picture

And gold still trades under 1900+

WTF? When will JPM quit this shit?

And when will the CME scumbags step up? Even if their obligation is not statutory they have a moral responsibility, and an enlightened self-interest in making good on MFG. Do they really want to kill their own market? Are they secretly unable to fulfill the obligation?

This country fucking deserves to go right down the drain.

nope-1004's picture

WTF? When will JPM quit this shit?

Never.  Don't you see what's happening?  They've got one of their own now as the PM of Italy, and the new leader of Greece is also an ex ECB stool pusher.

This is how priates do it in the 21st century.  You are seeing international theft and confiscation of sovereign assets right before your eyes, and no one gives a shit.  Quaddaffi, Berlusconi, etc.... next will be Sarkozy.  Mark my words.  Then Merkel.  Then ALL of the Eurozone gold will be "missing", just in time for a new currency.



SheepDog-One's picture

YEA exactly and meanwhile everyone just sits waiting for the next rumor driven ramp up....WTF it was nice knowin ya, human race....guess you had a pretty good run anyway.

JoBob's picture



correctly spelled as "yeah"


At least we can leave a literate legacy.

SheepDog-One's picture

Right, cant even get that right oh well are we really THAT much better than the Dodo bird?

s2man's picture

Pet peeve of mine, too.  But he could have meant the Old English yea, which means yes.

fwiw, the other one is yay = hooray, which often gets typed as yea.

Ponzi Unit's picture

all right, never -- maybe better phrasing would have been:

"When will PM longs overwhelm JPM's capacity to control price?

Bicycle Repairman's picture

As DB put it: "Politics has become “the” obstacle: All 5 "peripheral" countries have had leadership change in 2011"

So the gold won't be the only thing missing from the Eurozone.

s2man's picture

LMAO.  Moral responsibility.  That's a good one. 

Still laughing.  Oh geez.  ahahahaha. Oh, man.  I can't stop laughing. Oh, I"m crying. oh. oh. oh. oh.  hahahahahahaha.  Ahahahaha. I can't see to type.

Okay.  I think I'm over it.  Thought about TEOTWAWKI to stop the laughter.  Phew.

Do I really have to ask if you think they have any morals?

Edit: Yes, they do have a moral responsibility.  Not making fun of your post.  Just the thought of the CME or bankers having morals struck me as sooo funny.  I haven't laughed like that in a long time.  Thanks.

Ponzi Unit's picture

My comment goes to their traditional role - they are expected to perform. The fact that they don't suggests short-sighted sociopathic corporate response. CME was once a non-profit mutual deal. Bigger question is of their recklessness. Covering the bets is in their interest. Why don't they protect their franchise? Can they?

I worked on the Merc before it went public, long before it became the CME Group, fuckball. Save your adolescent laughter. Ask yourself, if you are capable of reflection: What happens to CME's business plan if investor confidence is destroyed?

NotApplicable's picture

What makes you believe that TPTB who are ushering in the "death of Capitalism" have any plans for a commodity futures market?

One man's franchise is another's honeypot, to be eaten until gone.

The only markets that will survive are the black markets. All others will be targets for confiscation by criminal cartels hiding behind various acronyms.

Bicycle Repairman's picture

If the markets become and venue for "politics" and work against the aims of the state (i.e. the state's owners) they will be manipulated and, if necessary, terminated.

Hearst's picture

Has the CME lowered Silver or Gold margin requirements since their blitz of raises earlier this year due to 'volitility' they initiated??

Gief Gold Plox's picture

Yes! Yes, they have indeed. /unicorns

css1971's picture

Say thank you to Mr. Dimon.


ItsNotYouItsMe's picture
  • ECB should announce large, targeted buying plan (i.e. € 200 bn over 12 months)
  • I like their definition of 'large' ... enough to put in a headline but nothing really worth while.

    Of course, if this were a TAX INCREASE, it would be classified as nothing or a "minimal" or "nominal" increase in taxes ... BUT ... spending/printing purposes, this classifies as a huge or 'large' plan!


    terryfuckwit's picture

    perhaps a picture of a clock might help drive the message home