A Time Bomb

ROME/BERLIN (Own report) – Following Italian Prime Minster Matteo Renzi’s defeat in Sunday’s referendum, Berlin is urging Rome to quickly form a “capable government” and resume its adjustment to the German model of austerity. “The economic problems have to be tackled at the roots,” said Jens Weidmann, head of Germany’s central bank, yesterday. German financial experts are floating the idea of a cabinet of technocrats, modeled on the Mario Monti government. Monti ruled for a year and a half beginning in November 2011, without having been democratically elected and initiated an austerity program considered extremely harsh. Time is pressing: the bank crisis, caused, to a large extent, by bankruptcies due to German austerity dictates, which has been festering in Italy for a long time, is threatening to escalate. The Monte dei Paschi di Siena tradition bank’s recapitalization planned this week is acutely endangered. It cannot be ruled out that its bank crisis could soon spread to other Italian credit institutions and to German banks.

On the Road to Autonomy

BERLIN/WASHINGTON (Own report) – Recent media reports have, for the first time, disclosed US American interference in German business deals with recalcitrant countries. US authorities intervene directly, if German companies carry out financial transactions, for example, with Iran. Repeatedly, Washington has successfully blocked business deals – even though they had been legal in Germany – and had the respective employees and board members fired from their jobs, using the justification that (German) companies with sites in the USA are subject to US law. This also applies to bilateral US sanctions imposed, for example, on Iran. This means that Washington actually succeeds in transposing US domestic law onto other countries, including Germany. The most recent example: Washington is considering a veto on a Chinese company’s taking over Aixtron, a German chip equipment manufacturer. President Obama is expected to announce his decision today, Friday. These US-practices have been disclosed at a time of political transition, as Berlin is reinforcing its efforts to create an EU armed forces, to achieve “strategic autonomy” and become a world power. This arrogant US interference in the German-European economy is a taboo that cannot be tolerated on the road toward the long anticipated “superpower Europe.”

Germany & THE 800 POUND GORILLA

The derivative exposure mentioned by Martin Armstrong is what has been covered on Global Geopolitics numerous times over the years under the following posts:

Is Deutsche Bank Kaputt?

New financial MELTDOWN set to sink EU as German banks lose £14,292,610,000.00 in 90 DAYS

Deutsche Bank Exodus Continues As Real Estate Chief Leaves For Blackstone

Is Deutsche Bank the next Lehman?

Deutsche Bank Is Scared: “What Needs To Be Done” In Its Own Words

End of the eurozone? Germany’s biggest lender Deutsche Bank CRASHES with first annual loss

Deutsche Bank shocks with warning of €6bn losses

 

This week, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee with less than 10,000 in population, announced it will begin charging retail customers to hold their cash starting in September. This will apply to accounts greater than €100,000 euros. This means the bank will charge customers 0.4 percent, which amounts to a direct pass-through of the current level of the ECB’s negative deposit rate. After speaking directly with banking sources, what is happening is that cash is flooding into German banks from around Europe just to park avoiding the negative deposit rate. Now, the banks are starting to pass the negative rates back to the clients. However, much of this flow of capital has also been money fleeing other banks outside of Germany for fear that the euro will break and they will get Deutschemarks.

IMF Humiliates Greece, Repeats It Will Keep Funding Ukraine Even If It Defaults

One week ago, we were stunned to learn just how low the political organization that is the mostly US-taxpayer funded IMF has stooped when, a day after its negotiators demonstratively stormed out of the Greek negotiations with “creditors”,  Hermes’ ambassador-at-large Christone Lagarde said that the IMF “could lend to Ukraine even if Ukraine determines it cannot service its debt.”

The eurozone was a dream of unity. Now Europe has turned upon itself

Again, it was known at conception that the Euro would fail.

 

Joining the euro club was once a badge of political and economic advancement. Now, if Athens is pushed out, others may choose to follow

Finally, the endgame. After weeks of posturing, Greece is running out of time to escape bankruptcy and a forced exit from the European single currency. By Friday, as both sides scrambled to fix up a fresh round of talks for this weekend after the International Monetary Fund’s negotiators flew home in frustration, it appeared that European officials had been discussing how they might manage a Greek default.

It’s hard not to be mesmerised by the day-to-day drama of walkouts, public posturing and political intrigue, which may finally reach its conclusion in the coming days.

Bundesbank Warns German Banks To Expect At Least 50% Losses On Austrian “Black Swan”

Just over a month ago, on March 1, the Austrian financial world was shaken by news that the first bank bail-in following Cyprus would not take place in Greece as many had expected, but in Vienna: judged by the rating agencies to be one of the safest places in the world, where the bad bank that was created to help with the wind-down of the defunct Austrian lender Hypo Alpe Aldria, would itself be unwound, with creditors suffering the bulk of the pain in the form of the first official “core Eurozone” bail in.

Truly a “black swan” event.

This, together with the revelation of the sordid state of Heta’s books which was only revealed after the bail-in fact, was certainly a shock to bondholders, who had been treating Heta bonds as money good as recently as last summer, only to face losses as large as 50%.

…