Deutsche Bank led the bankers’ charge against Scottish independence, claiming that an independent Scotland would enter “a great depression” that would blight generations of Scots. This dire prediction was made by Chief Economist David Folkerts-Landau, who owns several personal homes with a value of tens of millions and is a friend of the Camerons.
Deutsche Bank was the central pivot of the LIBOR fixing scandal. In the great banking crash it wrote off 92 billion dollars of junk assets that Folkerts-Landau had failed to notice was a liability. Today its share price has fallen even below the 2008 levels it reached after that write-off, and the German Finance Minister has just announced his full confidence in the bank and that there is nothing to worry about. Deutsche Bank shares have fallen 40% in a month.
Who the crooks and shysters at Deutsche Bank think they are to tell an entire nation of hard working and talented people that they are inadequate is beyond me. As for Scotland, this week a new natural gas facility came into production which by itself can supply all of Scotland’s natural gas needs for the next sixty years.
Deutsche Bank, feel my schadenfreude. No matter how badly we do post independence, was cannot possibly be as economically incompetent as you.
Doubtless Folkerts-Landau has a lifestyle and finances well-protected from the fate of the bank he has been skimming for decades. Should banks actually start collapsing again, I shall advocate immediate revolution as the only possible ethical stance if the politicians again move to bail them out with ordinary taxpayers’ money.
Habbabkuk
No bail-ins nor bail-outs, just jail-ins
Iceland Sentences 26 Corrupt Bankers To 74 Years In Prison
https://www.popularresistance.org/iceland-sentences-26-corrupt-bankers-to-74-years-in-prison/
IMF:
Iceland Makes Strong Recovery from 2008 Financial Crisis
Iceland has rebounded after the 2008/9 crisis and will soon surpass pre-crisis output levels with strong performance in tourism and fisheries. Debt ratios are on a downward path and balance sheets have broadly been restored. The financial sector is back on track though with some important items remaining on the docket.
http://www.imf.org/external/pubs/ft/survey/so/2015/car031315a.htm
Oh deary me the football story that’s about us which is not making the headlines here.
Who is the biggest earner and how much taxes do these football clubs pay for their detractions of the masses.
This story is bigger in Germany than that of the Deutsche bank, and the articles about EU reforms muttered by Cameron, are nowhere to be seen.
http://www.spiegel.de/international/europe/interview-with-football-leaks-about-corruption-in-football-a-1076192.html
and here, the original source
https://footballleaks2015.wordpress.com/
KOWN
“No bail-ins nor bail-outs, just jail-ins
Iceland Sentences 26 Corrupt Bankers To 74 Years In Prison”
___________________
That was witty, I admit. But gaoling bankers, although a pleasing prospect for some (many), still leaves the mess to be sorted out. Hence my question is still relevant, I think.
We have known for a long time that DB was in deep doo-doo. Max Keiser mentions it regularly. They are holding so much in toxic derivatives as to take down the entire German economy. See: Kenny, above.
Bert.
“Most people think if you give a bank money it still belongs to you”
Most people are wrong. Once you hand your money to a bank it legally belongs to the bank. The depositor retains an equitable interest in the money only.
Bert (12h11)
“We have known for a long time that DB was in deep doo-doo. Max Keiser mentions it regularly. They are holding so much in toxic derivatives as to take down the entire German economy. See: Kenny, above.”
__________________
Well, I have seen Kenny.
He wrote: “Don’t forget the derivatives. DB has derivatives equivalent to 20 years of Germany’s GDP. Ouch!”
I have shown that his twenty times German GDP doesn’t seem to stack up.
Closer reading required and perhaps you could tease out your comment a little further with better references than Kenny?
Thanks.
Habbabkuk – yes, something has been scrambled somewhere that might render the entire point about bailing out moot. Where it’s quoted at Automatic Earth the article says ’55T’, but the original article as it currently stands says ’55B’. Not really clear what happened!
Another article:
http://investmentresearchdynamics.com/will-deutsche-bank-be-saved-from-collapse/
Currently DB has roughly $2 trillion assets supported by $68 billion of book value. The problem is that many of its assets are highly overstated in value and have yet to be written down. The financial world shuddered at the $7 billion of admitted write-offs DB took in 2015. The problem is that over 85% of the charges taken by DB were attributed to legal costs. We know its “on-balance-sheet” assets are being reported at a significantly overvalued stated level. DB has big loans to the energy sector, Glencore, Volkswagon/Audi and other sundry highly risky businesses. It would only take a 3.5% write-down of its asset base to wipe out its book value.
THEN there’s the derivatives. DB has $58 trillion of notional amount in OTC derivatives hidden off its balance sheet. The bank will claim most of that is hedged out and the “netted” amount is a sliver of the notional amount. But ask AIG and Goldman Sachs how hedging / netting works out in the long run. “Netting” is only relevant when counterparties are prevented by Central Banks from defaulting. Once the defaults start, “net” becomes “notional” in a hurry.
I did an analysis of several of the big banks in early 2008, including JP Morgan, Wash Mutual, and Lehman. I took their identifiable assets and wrote down the identifiable home equity loan exposure and some other risky asset classes to levels I thought were conservative. I had concluded that those banks were technically insolvent. Eight months later it turned out I my analysis was quite accurate. Wash Mutual and Lehman collapsed and JP Morgan would have collapsed if it had not been bailed out by the Taxpayers.
The current era’s first big bank casualty will likely be Deutsche Bank, unless the German Government and the EU and U.S. Central Banks determine that a DB collapse would collapse the west, which it likely would. To put this in perspective, DB’s stated assets are $2 trillion. Germany’s GDP is just under $4 trillion. Then there’s the derivatives…
So it really comes down in the end to what it always comes down to: if the punters believe a bank is solvent, it is. If they don’t, it’s in the shit, and so are they. Keep believing, Bort… 🙂
From Wiki: David Folkerts-Landau’s personal wealth is estimated to be EUR 350 million, which makes him one of the richest bankers in Europe.
At 14 years old was sent to a Scottish boarding school (probably Gordonstoun?)
One of Deutsche Bank’s loan customers – see above – is Glencore. Safe as the Bank of, er…
http://www.reuters.com/article/loans-glencore-idUSL8N15O465
The current
crashpurely temporary hiatus in the superbly efficient operation of market forces has disproportionately affected the extractive industries:http://economictimes.indiatimes.com/news/international/business/mining-indaba-gloom-hangs-over-african-mining-as-china-growth-slows/articleshow/50926336.cms
And I see Blair wasn’t blairing there this year, either.
Breaking:
…pain faded early Wednesday, as Deutsche Bank saw its stock recover more than 14 percent from 30-year lows. The rebound followed assurances from co-CEO John Cryan that the bank’s balance sheet was “absolutely rock solid,” along with a report from the Financial Times that the lender was looking to buy back several billion dollars of its debt obligations.
http://www.ibtimes.com/deutsche-bank-other-stocks-bounce-back-after-days-financial-sector-punishment-2301761
Phew. Wonder how long it’ll take to print the money to buy back those debts? Till next time, then. Soon.
re:http://investmentresearchdynamics.com/will-deutsche-bank-be-saved-from-collapse/.
I note that the home page of the above link, presented to us by “Baal” and sub-titled “Converting knowledge and ideas into profits”, is rather reticent about itself – who runs it, for example?
I also note that the person who runs it also writes something called – perhaps significantly 🙂 – “Short Sellers Journal”, available on subscription against payment.
Anyway: it mentions three figures in respect of Deutsche Bank – USD 2 trillion in assets, USD 68 trillion in book value and …..USD 58 trillion in OTC derivatives “hidden off its balance sheet”.
There’s that that famous USD 58 trillion again.
Now, given the notoriously opaque world of derivatives, it is remarkable how the writer of that website has managed to arrive at that very precise figure.
And it is perhaps even more remarkable that he has not given us, in the article, the sources used to arrive at that figure.
To put it bluntly: is there any good reason to believe him?
Dead cat bounce?
http://www.forbes.com/sites/francescoppola/2016/02/10/deutsche-banks-recovery-is-not-what-it-seems/#52657fbc2168
Looks like it –
http://www.google.co.uk/finance?cid=673474
Never mind. There’s always the taxpayer….
http://www.bloomberg.com/news/articles/2016-02-10/deutsche-bank-will-have-government-backing-if-needed-mack-says
And Credit Suisse has responded to yesterday’s confident statements by its CEO thus:
http://markets.ft.com/research/Markets/Tearsheets/Summary?s=CSGN:VTX
Buy whoopee cushions…
Kenny
I looked at the DB published annual accounts, about 6 or 7 years ago.
As far as I remember, the gross exposure to derivatives was about the same size as the World GDP.
However the Directors “estimated” that their net exposure was a only about the GDP of Germany.
They didn’t know exactly then and I think nor do they today as well. Same probably goes for RBS.
“I shall advocate immediate revolution as the only possible ethical stance if the politicians again move to bail them out with ordinary taxpayers’ money.”
– Why not do it now over what already happened?
Someone was looking for a source and link on Deutsche Bank’s derivatives exposure.
Here’s one :
http://www.zerohedge.com/news/2016-02-09/investors-have-completely-lost-faith-deutsche-bank-top-10-shareholder-admits
Good article here. Comparing feudal system with financial oligarchy – not sure which wins…
http://www.greanvillepost.com/2016/02/13/financial-oligarchy-vs-feudal-aristocracy/
(And another, comparing Iraq with Cambodia.
http://www.greanvillepost.com/2016/02/14/john-pilger-on-isis-only-when-we-see-the-war-criminals-in-our-midst-will-the-blood-begin-to-dry/ )