Deutsche Bank looks tailor-made to give Angela Merkel a headache.
Germany’s biggest banks are in big trouble. That’s not exactly news. Before the financial crisis, Deutsche Bank’s share price was nearly €100 (us$135) a share. At the start of this year it was €21.45 ($24). This week, it hit its lowest value since 1973 and currently stands below €11. Now its situation is so dire that its name is trending on Twitter.
Since the 2008 financial crisis, Germany has been the rock of stability for Europe’s economy. It has weathered the storm with low unemployment, while economic crises upended entire political systems elsewhere in Europe. Now the banks at the heart of Germany’s economy seem on the brink of going under. The global economic crisis that began in 2008 could be about to hit Germany.
Most people don’t see a crisis. Out of the minority that does see it, a majority of that doesn’t see it for what it is: Economic warfare between the United States and the EU, mainly Germany.
Germany hit the NSA with a manufactured scandal. America then retaliated with sanctions on Volkswagen. Germany then retaliated through EU channels and began launching hits on Google, Facebook, Microsoft, Apple, etc… and all the other big companies doing business out there — which now leads us to the hit on Deutsche Bank.
To hear the words “Germany” and “instability” today in the same sentence is unheard of and absurd but that’s the world we now live in. Switzerland used to be one of the, if not the most, sound financially nations in the world. Now it’s gutted just as badly as Germany is being gutted. Note that the estimated fines on both Volkswagen and Deutsche Bank eerily mirror what can be found on their balance sheets.
Ten of the large hedge funds are withdrawing from Deutsche Bank. What must be understood here is that Deutsche Bank is the main clearing house for trades in Europe. The problem the hedge funds have is where do they move for clearing? Short-term, they can move to New York or London. With over $60 trillion derivative book at the Deutsche Bank, the government is totally incapable of even understanding how to deal with this crisis. We are looking at a major crisis in confidence.
Merkel is simply out of her mind to adhere to this insane policy of a bail-in. How can hedge funds stay with clearing at Deutsche Bank when she takes this position that would set off a catastrophic global meltdown. It still appears that Merkel will have to blink. Once people realize this is the real crisis, then the German debt market should turn down rather hard. Continue reading
As predicted in a previous post, being that Commerzbank is a subsidary of Deutsche Bank, you should’ve expected this without being shocked.
GERMANY’s second-biggest bank is cutting a staggering 10,000 jobs as part of efforts to be maintain profits amid negative interest rates implemented by the European Central Bank (ECB).
In another shock move, Commerzbank announced it would also axe its shareholder dividend payments for the first time ever.
The staff cull amounts to around a fifth of its 45,000 strong workforce. And comes just days after investors panic over the solvency of its bigger rival Deutsche Bank. Continue reading
Deutsche Bank CEO John Cryan has called for cross-border bank mergers in Europe.
- John Cryan: “We need more mergers, at a national level, but even also across national borders.”
- “Scattered regionalism among banks placing unacceptable squeeze on bank profits and long-term sustainability.”
- Top executives of Deutsche Bank and Commerzbank held talks on a potential combination in early Aug.
- Source: “There was a round of talks in late August in which (Deutsche Bank Chief Executive) John Cryan and (Chief Financial Officer) Marcus Schenck were present.”
- Deutsche and Commerzbank combined market value 26 billion euros ($29 billion), half of France’s BNP Paribas.
- Both Deutsche and Commerzbank slipping down the rankings of the continent’s top banks.
- Georg Fahrenschon, savings bank association head: “Recent demands for fundamental consolidation among banks are not appropriate.”
The latest confirmation that Germany’s troubled banking giant Deutsche Bank is unable to navigate the troubled waters of NIRP came on Wednesday when the bank announced that its second-quarter net income fell 98% from a year earlier, hurt by weaker performances in trading, investment banking and other core areas. The lender said net income tumbled to €20 million ($22 million) from €818 million a year earlier, modestly better than the €22mm loss expected, while net revenue dropped 20% to €7.4 billion.
After rebounding modestly on the beat, the bank’s shares fell tumbled 5% on Wednesday morning, their lower level in 2 weeks; today’s decline has dragged DB stock 45% lower in 2016, making it one of Europe’s worst performers YTD (the Stoxx 600 is down 27% in 2016). Continue reading
As yet another reminder, and you may well already know after being a reader here for a while, Deutsche Bank has over $70 trillion in derivatives exposure. We could be seeing the effects of that right now. What’s more, Commerzbank is a “Tochterunternehmen” of Deutsche Bank. In English, that’s to say it’s a subsidiary. Therefore, the true scale of DB’s exposure is not 100% known. In this century’s total economic collapse race, Germany is making a strong push to be the first in the world. America’s in the same boat, but it has a better method in kicking the can down the road.
EUROPE’S biggest economy was plunged into fresh chaos tonight amid warnings a new financial crisis in Germany could destroy the EU.
Shares in Germany’s two biggest lenders – Deutsche Bank and Commerzbank – fell sharply again as panic gripped global markets. They have now seen their combined market value plummet by more than £14BILLION in the past three months.
Deutsche Bank shares fell by nearly four per cent to close at an all-time low amid turmoil not seen since the depths of the financial crisis in 2009.
Meanwhile shares in Commerzbank, Germany’s second biggest lender, fell even further, by 4.65 per cent, to close at their lowest level in nearly two-and-a-half years.
The future is sealed, and it’s not a matter of ‘if’ but ‘when’. If you’ve been paying attention to the news of lately, you will have noticed a lot of predictions for September, 2015. Could the experts be on to something? As far as a specified date is concerned, we’ll soon see.
The world is entering a new economic era—one that won’t be defined by America.
This past March marked a radical turning point for the global economy, particularly the United States’ economic dominance.
China proposed the launch of the Asian Infrastructure Investment Bank (aiib)—a new, Chinese-run international bank specifically designed to challenge U.S. global economic leadership. America tried to convince other nations not to agree to join. But it failed—even with its closest allies.
For the U.S., it was an unmitigated disaster.
It should be a “wake-up call,” to a “new economic era,” wrote former Treasury Secretary Larry Summers.
As we said over the weekend, it’s all about Riga again for Greece. EU leaders will meet on Thursday and Friday in Latvia where PM Alexis Tsipras will try to secure a more favorable outcome than did FinMin Yanis Varoufakis who, last month in Riga, reportedly did more chiding and lecturing than negotiating, a performance that may ultimately cost him his job once all is said and done. The situation is far more urgent this time around, with Greece having tapped its IMF SDR account to make a payment to the Fund and with the banking sector running dangerously low on collateral that can be pledged for emergency liquidity. Continue reading
As described earlier in a previous post, these are essentially proxy groups with state backing. They create a group that allows for plausible deniability, showing no attributable activity.
A security firm is warning that a group of Russian hackers known for targeting military, government and media organizations is now preparing to attack banks in the U.S. and elsewhere.
The group’s preparations, which have included writing new malware, registering domain names similar to those of intended targets, and setting up command-and-control servers, were discovered by analysts from security firm Root9B.
A new Greek currency? Plausible. Grexit? As oft here discussed, Greece is too important for that.
Banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month.
Among the firms running through drills are Citigroup Inc., Goldman Sachs Group Inc., and brokerage ICAP PLC, according to people familiar with the matter. Continue reading
Just 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of “helicopter money,” as Deutsche bank noted, “perhaps there’s an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock.” Committing what Commerzbank calls “the ultimate sin” is now reaching the mainstream as Germany’s Der Spiegel notes it is becoming increasingly clear that Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation; and many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy.
It seems perhaps tomorrow is… today… As Der Spiegel explains…
Fears that the euro zone is heading for deflation refuse to abate. Now, many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy. But would it work?
It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt. Continue reading
Saudi oil minister suggests Opec oil cartel would keep its production ceiling at 30m barrels per day
Oil slumped on Wednesday as expectations that Opec will cut production faded following dovish remarks by cartel kingpin Saudi Arabia, which could signal the beginning of a price war.
Speaking on the sidelines ahead of Thursday’s critical meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, Saudi oil minister Ali Al-Naimi said: “The market will stabilise itself eventually”.
Brent crude – a global benchmark comprised of a blend of high-quality oil from 15 North Sea fields – fell 1.3pc to $77.30 per barrel after Mr Naimi’s comments, before recovering to trade flat at $78.29 by late afternoon. Brent crude has fallen 30pc since June. Continue reading
Commerzbank forecast higher bullion prices even after 500-tonnes of gold ‘vanishes’ in China
Gold hit a three-month high on Tuesday morning, defying most expert views that 2014 would see further falls in the precious metal a day after a report revealed 500-tonnes of bullion is missing somewhere in China.