Deutsche Bank – the New Lehman Brothers?

As Mr. Armstrong points out, DB is part of the Euro crisis. It’s exposed to a time bomb of over $70 trillion in derivatives and it’s not surprising that it’s been said to be the next Lehman Brothers. It should be interesting to see how much more it’s exposed to in regards to the Volkswagen ‘scandal’, which is more of a political hit for quick cash. If the global economy is going to collapse, it is going to start in Germany.

 

The rumor mill has been nonstop. The crushing blow to Europe will be the failure of Germany’s biggest bank: Deutsche Bank. Just about every circle is quietly discussing how the bank is facing bankruptcy. The rumors have flown since March when Deutsche Bank failed the U.S. regulatory stress test, which was followed by the resignation of its head in June. A collapse of the Deutsche Bank is profound and very likely to impact Europe to the point that everyone behind the curtain is now calling for a new Lehman moment. Sources tied with the Fed’s decision not to raise rates fear that they will be seen as the cause of its failure. Germany clearly faces a major shock; if this combines with Volkswagen for the turning point next week, well, here we go again. Continue reading

Bundesbank, PBOC in Pact to Turn Frankfurt Into Renminbi Hub

The central banks signed a memorandum of understanding in Berlin today, when Chinese President Xi Jinping met German Chancellor Angela Merkel, the Frankfurt-based Bundesbank said in an e-mailed statement.

Germany’s financial capital prevailed over Paris and Luxembourg in a euro-area race to win trade in renminbi, which overtook the euro to become the second-most used currency in global trade finance in October, according to the Society for Worldwide Interbank Financial Telecommunication. The U.K. Treasury said on March 26 that the Bank of England would sign an initial agreement with the PBOC on March 31 to clear and settle yuan transactions in London.

“Frankfurt is one of Europe’s foremost financial centers and home to two central banks, making it a particularly suitable location,” said Joachim Nagel, a member of the Bundesbank’s executive board. “Renminbi clearing will strengthen the close economic and financial ties between Germany and the People’s Republic of China.” Continue reading