It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed.
After a hard-hitting sequence of scandals, poor decisions, and unfortunate events, Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low.
Even more stunning is the long-term view of the German institution’s downward spiral.
With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007.
The Beginning of the End
If the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful.
In recent times, Deutsche Bank’s investment banking division has been among the largest in the world, comparable in size to Goldman Sachs, JP Morgan, Bank of America, and Citigroup. However, unlike those other names, Deutsche Bank has been walking wounded since the Financial Crisis, and the German bank has never been able to fully recover.
It’s ironic, because in 2009, the company’s CEO Josef Ackermann boldly proclaimed that Deutsche Bank had plenty of capital, and that it was weathering the crisis better than its competitors.
It turned out, however, that the bank was actually hiding $12 billion in losses to avoid a government bailout. Meanwhile, much of the money the bank did make during this turbulent time in the markets stemmed from the manipulation of Libor rates. Those “wins” were short-lived, since the eventual fine to end the Libor probe would be a record-setting $2.5 billion.
The bank finally had to admit that it actually needed more capital.
In 2013, it raised €3 billion with a rights issue, claiming that no additional funds would be needed. Then in 2014 the bank head-scratchingly proceeded to raise €1.5 billion, and after that, another €8 billion.
A Series of Unfortunate Events
In recent years, Deutsche Bank has desperately been trying to reinvent itself.
Having gone through multiple CEOs since the Financial Crisis, the latest attempt at reinvention involves a massive overhaul of operations and staff announced by co-CEO John Cryan in October 2015. The bank is now in the process of cutting 9,000 employees and ceasing operations in 10 countries. This is where our timeline of Deutsche Bank’s most recent woes begins – and the last six months, in particular, have been fast and furious.
Deutsche Bank started the year by announcing a record-setting loss in 2015 of €6.8 billion.
Cryan went on an immediate PR binge, proclaiming that the bank was “rock solid”. German Finance Minister Wolfgang Schäuble even went out of his way to say he had “no concerns” about Deutsche Bank.
Translation: things are in full-on crisis mode.
In the following weeks, here’s what happened:
- May 16, 2016: Berenberg Bank warns that DB’s woes may be “insurmountable”, noting that DB is more than 40x levered.
- June 2, 2016: Two ex-DB employees are charged in ongoing U.S. Libor probe for rigging interest rates. Meanwhile, the UK’s Financial Conduct Authority says there are at least 29 DB employees involved in the scandal.
- June 23, 2016: Brexit decision hits DB hard. The bank is the largest European bank in London and receives 19% of its revenues from the UK.
- June 29, 2016: IMF issues statement that “DB appears to be the most important net contributor to systematic risks”.
- June 30, 2016: Federal Reserve announces that DB fails Fed stress test in US, due to “poor risk management and financial planning”.
Doesn’t sound “rock solid”, does it?
Now the real question: what happens to Deutsche Bank’s derivative book, which has a notional value of €52 trillion, if the bank is insolvent?
Is brexit the cause of Euro banking dystopia? Nah.
The bottom line is, we must rid ourselves of the Federal Reserve. Repudiation of the debt is the way forward.
Admin, thanks for the once again brilliant analysis of this fourth turning black swan unfolding before us.
And no one but the bankers would be hurt by repudiation of the debt.
It’s better than the alternative of bankers owning the supply chain from source to sink, allowing us the privilege of paying whatever they happen to feel like charging for basic necessities.
At least the love of God is free to all who will accept it.
AWB, that’s the best comment today. When you can counterfeit money in unlimited amounts, you can buy everything.
Star, that’s exactly why I keep saying you have no hope of ever working within the current system. Sure you can minimize your exposure to it but it must die or you just end up constantly adapting to their over reach and corruption. Ask Llpoh…it’s why he’s currently extracting himself from their rigged casino despite having a successful business. It’s just not worth the effort anymore.
“Now the real question: what happens to Deutsche Bank’s derivative book, which has a notional value of €52 trillion, if the bank is insolvent?”
Excellent question – maybe DB is THE catalyst that starts the financial ball rolling that will allow all developed world bank debt to be erased and for the UN to step in with their plan.
The developed world Governments, International Corporations, and Banksters will be made whole. All other peasants will still own your debt – Let them eat cake.
Deutsche Bank’s Chief Economist Calls For €150 Billion Bailout Of European Banks
by Tyler Durden
Jul 10, 2016 10:42 AM
The cards have been tipped, and it appears Italy’s Prime Minister may have been right.
Recall that in the aftermath of Brexit, much of the investing public’s attention has turned to Italian banks which are in desperate need of a bailout as a result of €360 billion in bad loans growing worse by the day (and not a bail-in as European regulations mandate) to avoid a freeze and/or collapse of Italy’s banking sector. This has pushed stock prices – and default risk – on Italian banks to record levels. So far Italy’s bailout requests have mostly fallen on deaf ears, as Germany’s political leaders have resisted Renzi’s recurring pleas for a taxpayer funded rescue. However, as we have alleged, and as the Italian Prime Minister admitted last week, the core risk for Europe is not just the Italian banking sector but the biggest bank of all in Europe: Deutsche Bank.
Recall last Thursday, when speaking at a joint news conference with Swedish Prime Minister Stefan Lofven, Renzi said other European banks had much bigger problems than their Italian counterparts.
“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said.
He was of course referring to the tens of trillions of derivatives on Deutsche Bank’s books.
Today, we got the most definitive confirmation yet that the noose is tightening not only around Italy, but Germany itself (where as we reported on Thursday, Europe’s Bank Crisis Arrives In Germany as €29 Billion Bremen Landesbank On The Verge Of Failure) when none other than David Folkerts-Landau, the chief economist of Deutsche Bank, has called for a multi-billion dollar bailout for European banks.
Speaking to Germany’s Welt am Sonntag, the economist said European institutions should get fresh capital for a recapitalization following a similar bailout in the US. What he didn’t say is that the US bailout took place nearly a decade ago, in the meantime Europe’s financial sector was supposed to be fixed courtesy of “prudent” fiscal and monetary policy. It wasn’t.
As Landau says the US helped its banks with $475 billion dollars, and such a program is now needed in Europe, especially for Italian banks.
“In Europe, the bailout does not need to be so large. A €150 billion program should be enough to help European banks recapitalize,” said David Folkerts-Landau. He adds that the decline in bank stocks is only the symptom of a much larger problem, namely a fatal combination of low growth, high debt and a “dangerous” deflation.
“Europe is seriously ill and needs to address very quickly the existing problems, or face an accident” said the chief economist.
The Deutsche Bank expert said he is particularly worried about Italy and the condition of local banks, where the €40 billion in funding needs is said to be “conservative.” He said that the bank bailout is so urgent that it should permit Europe to violate the bail-in rules of the new Banking Directive. The economist notes that such a bail-in is not doable and is politically unfeasible because it would hit people’s savings and may cause a bank run in both Italy and elsewhere. We find it strange how nobody thought of this before the rules were implemented, or rather how impairing savings was only a problem when “second-rate” European citizens such as those in Cyprus and Greece were affected. Now that Italians and even Germans are in the cross hairs, suddenly “it is time to change the rules.”
His conclusion: “Strictly adhering to the rules rules would cause greater harm than if they were suspended.”
Our only question is whether Deutsche Bank’s chief economist is more worried about the future of Italy’s banks, or that of his own employer.
In the meantime, we look forward to the next pan-European bank bailout, now that even Germany’s biggest bank has thrown in its support behind the proposal, which means Merkel and Schauble’s resistance will promptly evaporate in the coming days as insolvent banks across Europe once again get rescued by taxpayers, in the process further escalating populist anger at the treatment of banks, leading to more Brexit-like events and the further fragmentation of Europe.
DB is Da Bomb! Literally.
Analogy: DB is the table cloth under your Christmas dinner. What do you think happens when the table cloth is suddenly jerked off the table?
Beans and rice…………..
Get it before you can’t. Seriously.
I have talked about this DB situation for some time now…….final ticks before it blows.
When DB blows in the CMM the shit will OFFICIALLY have hit the fan.
Current Economic Collapse News Brief
https://www.youtube.com/watch?v=ke80E7Zktys
Tell me this please; If the big banks got bailed out before, then what leads you to think they won’t get bailed out again? They own all the Western governments, and no one in the ‘elite’ class gives a shit about us common slobs, so what’s keeping them from throwing all of us under the bus and looting the treasury…..again?
They are ready to collapse the system, they won’t seek a bail out. They would lose all credibility and collapse in any event, their foolish games have no winning strategy. To fully understand why the banksters create booms & busts, you have to go back the the Napoleonic War, when Rothschild bought England for pennies on the pound via subterfuge at the exchanges.
This is a place to begin: http://rense.com/general88/hist.htm
They know the unwashed masses are about to come for them and the only way to save their own skin is to decimate the ability of the masses to survive and to focus the masses on survival rather than revenge. The internet is the vehicle of awakening.
Gerald Celente-Panic of 2016 at the Doorstep
Greg Hunter
https://www.youtube.com/watch?v=Pe9WC8ZYR4M
I called this YEARS ago. German banks have long been fucked, and leveraged themselves at 50 or even 100 to one, making loans to all those newly minted but insolvent EU nations or wannabes so that they could buy German manufactured goods.
I explained this over and over to all the cretins that screamed that if German manufacturing is so successful and has not collapsed, why has not the US’s manufacturing been able to do the same.
Now you are seeing why. German banks loaned money to support German manufacturing, and did it to high risk nations, and leveraged themselves insanely. The piper was always going to have to be paid.
Once again I was right. Everyone see the trend with that?
It should be noted that evil Jewish Bolsheviks slaughtered between 60 and 100 million White Russian Christians.
Ukrainian ‘Holodomor’ (man-made famine) Facts and History: http://www.holodomorct.org/history.html
SEE Solzhenitsyn’s statement on this: http://www.whitenations.com/showpost.php?p=13003&postcount=2
Big injun Chief , I remember when you did speak out Against bank debt in Germany.These bank did make a lot of loans to bankrupt governments but that’s the way the banks control the European countries. He who controls the debt controls the situation on the ground in said country. Giving up debt means giving up control.These banks will never give up their control until controlling becomes to painful.
Swamp Fox ,what really got my attention was out of the 300 leading Bolsheviks murderers 264 were from New York City ,lower west side. So what *Solzhenitsyn said was true.The murderers were not Russians they Jewish immigrants from eastern Europe. Schiff ( the Jewish banker primary responsibe) got then right out of the Jewish organizations here in America.Wonder if those Jews in New York city still have murderous intentions towards us goy????
Wonder if those Jews in New York city still have murderous intentions towards us goy????
They have been following the insane bastard Noah’s playbook for 5,000 years, so don’t expect them to change any time soon. Their goal is world domination and they are willing and enthusiastic about killing all non jews, the prospect titillates them. Their motives are well hidden, it takes hard work to unearth them.
So when does this leviathan finally run aground?
That’s the $64,000 question, but it is more like days, not months.
The Morgue is the Next Stop For the Financial System – Jim Willie
http://www.silverdoctors.com/gold/gold-news/dead-pulse-the-morgue-is-the-next-stop-for-the-financial-system-jim-willie/
DANGER: The World Is Now On The Verge Of The Largest Destruction Of Wealth In History
July 10, 2016
Egon von Greyerz – “Investors worldwide have never faced risk of the magnitude that the world is now exposed to. But sadly, very few are aware of this unprecedented risk. For the ones who understand risk and take the right decisions, it will “lead to fortune.” Only very few will choose that route. Instead, most investors will continue to live in the hope that current trends will go on forever, but sadly these people will end up “in shallows and in miseries.”
No Sovereign state will ever repay their debt – That is an irrefutable statement and anyone who doesn’t understand that lives in denial. Sovereign debt has increased exponentially in the last couple of decades and governments neither can nor have the intention of ever paying their creditors. They can’t even afford to pay the interest and this is why an ever increasing number of countries have negative interest rates. So not only will they not repay the capital but investors now pay bankrupt nations for the privilege of holding their worthless paper. It is incomprehensible that investors are prepared to hold nearer $100 trillion of debt with no yield or negative yield and no chance of getting their money back. No one worries about the return OF their money and now it seems that investors don’t even worry about getting a return ON their money. This is a shocking state of affairs that eventually will lead to a total collapse of all sovereign debt.
No bank will ever give depositors their money back – I know that very few believe this statement. Because if bank depositors did, they would not keep around $200 trillion of assets in the financial system plus another $1.5 quadrillion in addition in the banking system. Bank stocks in Europe, whether it is Deutsche Bank in Germany or bank Monte Paschi in Italy, are continuing to crash to new lows. As I stated in a recent article, the share price of most European banks as well as many US banks like Citigroup or Bank of America have collapsed 70-95% since 2006 and they are on their way to ZERO. Consumer borrowing is still growing exponentially. Student loans in the US now total $1.4 trillion, up a MERE 3x since 2006. And the delinquency rate is increasing exponentially as most students can’t find a job.
Stock markets will fall 90% or more – I know that most investors will think that this is a sensational statement from someone totally deranged. But let me just remind investors that when the Dow crashed 90% between 1929 and 1932, the economic conditions in the USA and the rest of the world were far superior to the ones we are experiencing currently. Economic conditions are deteriorating fast worldwide but stock markets are continuing to go up to dizzy levels. Investors are putting their faith in funny or printed money. S&P earnings have declined for 5 straight quarters. The Dow is now valued at a jaw-dropping 24x GAAP earnings. And sales revenue, adjusted for share buybacks, is down 1/3 since 2006. Yes, governments worldwide will, this year, launch the most massive money printing program in history. But that will be like pushing on a string and will have zero effect on the world economy. The time when the misconceived Keynesian methods of creating prosperity by printing worthless pieces of paper (or electronic money) is now passed. The printed money will only exacerbate the debt problem. And the world will soon learn that you cannot solve a problem by applying the same methods that caused the problem in the first place.
* Property markets will collapse – Low interest rates and speculative frenzy have created bubble property markets worldwide. We had the first warning signal in 2006, but through massive money printing and guarantees to the extent of US$25 trillion, governments and central banks managed to postpone the inevitable. Since then, global debt has increased by 2/3 and interest rates have declined from around 6% to zero or negative. In Switzerland, a 15-year mortgage now costs 1.25% and in Sweden you don’t need to ever amortize your mortgage. And in the UK, 6 major commercial property funds have now frozen redemptions. That represents 50% of the commercial property funds and is a grave sign that should be taken as seriously as the 2006 subprime crisis. China, with its $34 trillion debt and many ghost towns and empty properties, will also have massive problems.
The above may sound like a prophecy of doom and gloom. For investors who want the good news, they can just listen to any TV channel or read the newspapers. There are very few places where risk is spelled out properly. I obviously hope that my forecasts above are totally wrong but I fear that I will be right. And therefore, I believe that it is essential for investors as well as people who don’t have much to protect to take whatever safety measures they can.
Gold and silver will not solve all the potential problems or catastrophes that the world will encounter in the next few years. But it is probably the best insurance that investors can hold to protect their capital against potentially the largest destruction of wealth that the world has ever encountered. Naturally, it must be physical gold and silver and it must be held outside of the financial system.”
Swamp Fox , the fact that the newly formed Jewish organizations here in America were directly responsible for the Holocaust in Russia and the starvation of millions of Ukrainians has been a secret well kept by the mass media which is mostly Jewish owned. Only ones I have ever read about admitting to these genocides have been a few Jews in Israel.
bb, if you know how they play the game, there would be no surprises.
First you must read about WWIII, planned since 1871: http://www.libertyforlife.com/nwo/albert_pike.htm
Then you have to fully understand the protocols of zion: http://www.biblebelievers.org.au/przion1.htm
They hate whites and especially Christians: http://www.talmudunmasked.com
Once your eyes are opened to the desired results they seek, their machinations make far more sense to you. Our job is to head them off at the pass and give them a real holocaust (the first one was fake).
The sick fucks even want to destroy the jews.
Thank you Swamp Fox and Llpoh for explaining it. I’ve always kinda got it, but some of the economic pundits on the Interwebs go into so much detail and such that I get confused.
So, in essence, the banksters and PTB control the monopoly money world of finance and when it suits them they bring it all down and are in a position to firmly own the Nations that will be worth something.
I can’t imagine then giving a hoot about Zimbabwe, but very much want all the Western countries plus Japan and South Korea.
As an added bonus, they figure that the Whites will be shattered and demoralized even more than they are today as a result of the total chaos and it will be easier to genocide them….us.
Good plan. Too bad for them it won’t succeed.
You’re right, they won’t succeed. They are losing the fight right now, and the big guns are trying to make deals to save their skins right now. The White Dragon Society is crushing them. Paul Craig Roberts has it nearly right, but his focus is America, not global. The evil Vatican, the Black Robes and the Rothschilds & Rockefellers have it their way for now, but they are quickly losing their grip. I would urge you to google those groups to find out about them.
I’ll check it out, thanks.
The Black Robes are the Jesuits, the Vatican’s secret service, a murdering bunch of psychos.
John Williams (of Shadow Stats) on the Brexit and the Economic Consequences, Hyperinflation and Death of U.S. Dollar!
https://www.youtube.com/watch?v=MGBSmNtRfOM
A Euro bank bailout for DB and others may be what ends the dangerous NIRP (negative interest rates) experiment, and possibly ZIRP (zero interest rates) as well. Balancing out the derivatives books will again be the most expensive challenge. Based on recent history, a crisis on this scale is unlikely to trigger any sort of collapse. A large enough bailout could well become the catalyst for a new wave of inflation — one has to wonder when some of the oceans of QE will be spilling out into the real world…
Sovereign bonds are toilet paper, no government will ever pay back their debt.
Nothing like an invasion of savages to take the people’s minds off this impending disaster.