News

**MR2**

Deutsche Bank shares tumble as deal doubts mount

Shares in Deutsche Bank tumbled for a second day on Tuesday. Analysts say there are growing doubts over a massive restructuring plan announced at the weekend.

**MR2** · (This post was last modified: 07-11-2019 06:14 AM by MR2.)

Deutsche Bank shows how ultra low rates can hurt

Some of the German lender's issues are unique but the bank is also suffering from operating in Europe's ultra-low interest rate environment.

"The bottom line for the banks in Europe is that low rates are a problem as they can't grow net interest income," said PM Capital's chief investment officer Paul Moore. "They typically have cost inflation as they tend to be labour intensive banks and if you can't grow net interest income, it's hard to grow profits."

"European banks have had to downgrade their earnings as they were expecting interest rates to slowly rise. The market then de-rates them," said Mr Moore. "When you can't grow earnings then you start doing things like price competition."

If Deutsche Bank is struggling with pre-provisioning profitability, regulators and investors become concerned that the bank's equity base will suffer in a downturn, the fund manager said. "Then it becomes a concern for Germany. That is, in a time of downturn, the government will have to take over."

Deutsche Bank's efforts to restructure its business to boost profit includes lowering the banking giant's cost base from €20 billion to €17 billion. Mr Muldoon is sceptical that the bank will be successful. "It's a stretch to make their numbers work," he said.

https://www.afr.com/business/banking-and...710-p525rf

**MR2**

Deutsche Bank updated its bad debt from 45 billion to over 75 billion.

Another bailout is on the cards.

**SkeptiSchism**

MR2 Wrote: (07-11-2019 06:31 AM)

Deutsche Bank updated its bad debt from 45 billion to over 75 billion.

Another bailout is on the cards.

It's inevitable. Because of the counter party risk, there are over $1.5 quadrillion in derivatives floating around in the world's stock markets. They are only worth something if the counter party can pay. If the counter party can't pay, there are immediate losses.

The whole thing can freeze up like what happened in 2008. So to prevent that from happening, governments step in and bail the banks out. Which makes the situation worse because the banks then double down on the fraud. They get paid twice, once from the market for creating the derivatives and then again after that in bailouts.

In fact the business is so profitable they structure products to intentionally fail so they get bailed out.

People don't realize how much deep sh!t we are in due to the banks criminal negligence and fraud.

**MR2**

SkeptiSchism Wrote: (07-11-2019 06:42 AM)

MR2 Wrote: (07-11-2019 06:31 AM)

Deutsche Bank updated its bad debt from 45 billion to over 75 billion.

Another bailout is on the cards.

It's inevitable. Because of the counter party risk, there are over $1.5 quadrillion in derivatives floating around in the world's stock markets. They are only worth something if the counter party can pay. If the counter party can't pay, there are immediate losses.

The whole thing can freeze up like what happened in 2008. So to prevent that from happening, governments step in and bail the banks out. Which makes the situation worse because the banks then double down on the fraud. They get paid twice, once from the market for creating the derivatives and then again after that in bailouts.

In fact the business is so profitable they structure products to intentionally fail so they get bailed out.

People don't realize how much deep sh!t we are in due to the banks criminal negligence and fraud.

I dont know if the public will accept another bail out this time around...the memory of the last one is still very clear in their minds. Time will tell soon enough.

The policy of low interest rates subsidising the markets and robbing the middle class and retirement savings is about to come back and bite them on the ass. Trump is putting pressure on the Fed to lower rates even more... I don't see how this ends well.

**SkeptiSchism**

MR2 Wrote: (07-11-2019 06:49 AM)

SkeptiSchism Wrote: (07-11-2019 06:42 AM)
It's inevitable. Because of the counter party risk, there are over $1.5 quadrillion in derivatives floating around in the world's stock markets. They are only worth something if the counter party can pay. If the counter party can't pay, there are immediate losses.

The whole thing can freeze up like what happened in 2008. So to prevent that from happening, governments step in and bail the banks out. Which makes the situation worse because the banks then double down on the fraud. They get paid twice, once from the market for creating the derivatives and then again after that in bailouts.

In fact the business is so profitable they structure products to intentionally fail so they get bailed out.

People don't realize how much deep sh!t we are in due to the banks criminal negligence and fraud.

I dont know if the public will accept another bail out this time around...the memory of the last one is still very clear in their minds. Time will tell soon enough.

The policy of low interest rates subsidising the markets and robbing the middle class and retirement savings is about to come back and bite them on the ass. Trump is putting pressure on the Fed to lower rates even more... I don't see how this ends well.

It doesn't end well, but it definitely ends at some point. Negative interest rates destroy capital formation. Supposedly people hold debt (bonds) because it appreciates in value, forms capital. But negative rates destroy capital, you get back less than what you originally invested.

When debt is increasing, because debt always increased in a debt based monetary system AND negative rates destroy capital it's like doubling the debt burden.

So it won't last long, I can't say how long it will last but people who are aware now will be transitioning out of all instruments related to debt, which unfortunately includes most major stocks because corporations issued bonds to buy back their stocks taking advantage of the zero cost interest rates set by the fed.

I think they are trying a controlled demolition. They know the system is going to fail, they are just trying to prolong it's life for as long as possible because they don't have a solution that satisfies all the stakeholders.

**spɹɐʍoɔ snoɯʎuouɐ**

**spɹɐʍoɔ snoɯʎuouɐ** · (This post was last modified: 07-11-2019 07:04 AM by spɹɐʍoɔ snoɯʎuouɐ.)

**MR2**

Other strange alarming sh*t.

Central bankers hinting at more monetary stimulus have depressed yields so much that even some European junk bonds trade at levels where investors have to pay for the privilege of holding them.

The number of euro-denominated junk bonds trading with a negative yield -- a status until recently associated with ultra-safe sovereign borrowers -- now stands at 14, according to data compiled by Bloomberg. At the start of the year there were none.

Cheap money policies since the financial crisis have kept interest rates at, or near, all-time lows for the last decade. That’s prompted many investors to buy riskier assets that yield enough for them to meet their liabilities, driving bond markets higher and yields lower. The European Central Bank said on Monday it’s ready to add more stimulus to the euro zone, indicating that an end to the age of ultra-low borrowing costs is far from over. https://www.bloomberg.com/news/articles/...ond-market

In Brazil, Mexico and the Philippines, longer-term rates have fallen below their short-term counterparts, creating inverted yield curves that are often interpreted as a harbinger of recession. Curves have also flattened in South Korea, and have long been inverted in troubled Argentina and Turkey. https://news.yahoo.com/now-inverted-yiel...34259.html

LIBOR Now Inverted: "Rate-Cuts Aren't Going To Be Insurance; They Are The Alarm Bells" https://www.zerohedge.com/news/2019-06-2...larm-bells

**MR2**

Now A 3rd Bank, JPMorgan, Issues A Market Warning

J.P.Morgan warns of possible uncontrolled sell off of the bond Market.

**spɹɐʍoɔ snoɯʎuouɐ**

**MR2**

spɹɐʍoɔ snoɯʎuouɐ Wrote: (07-11-2019 07:15 AM)

https://twitter.com/CamilleJivajen/statu...1745915904

https://twitter.com/superlorna69/status/...9833034752

Deutsche Bank has been supporting criminals for decades... I don't think they are on their own on that. Lots of bankers need to go to jail. We wasted the last opportunity to do that in 2008-2009...hopefully we don't let them slide this time around.

**spɹɐʍoɔ snoɯʎuouɐ**

Quote:Noun 1. lynchpin - a central cohesive source of support and stability

lynchpin - a central cohesive source of support and stability; "faith is his anchor"; "the keystone of campaign reform was the ban on soft money"; "he is the linchpin of this firm"
backbone, keystone, linchpin, mainstay, anchor
support - something providing immaterial assistance to a person or cause or interest; "the policy found little public support"; "his faith was all the support he needed"; "the team enjoyed the support of their fans"

2. lynchpin - pin inserted through an axletree to hold a wheel on

**MR2**

spɹɐʍoɔ snoɯʎuouɐ Wrote: (07-11-2019 07:29 AM)

Quote:Noun 1. lynchpin - a central cohesive source of support and stability

lynchpin - a central cohesive source of support and stability; "faith is his anchor"; "the keystone of campaign reform was the ban on soft money"; "he is the linchpin of this firm"
backbone, keystone, linchpin, mainstay, anchor
support - something providing immaterial assistance to a person or cause or interest; "the policy found little public support"; "his faith was all the support he needed"; "the team enjoyed the support of their fans"

2. lynchpin - pin inserted through an axletree to hold a wheel on

Investigations surrounding Deutsche Bank’s more than decade-long relationship with President Trump and his business have created a crisis for the German financial giant.

It’s caught in a legal tug of war between Trump and House Democrats for the president’s financial records and calls for broad investigations of its anti-money-laundering practices.

But for the 150-year-old bank, Trump is just the beginning of its problems.

Once a global powerhouse, catering to the U.S. elite from a tower on Wall Street, Deutsche Bank’s fortunes have waned. Sunday, it announced a sweeping restructuring, including gutting its stock and bond trading business and reducing other investment bank operations.

The overhaul will mean as many as 18,000 job cuts by 2022 out of its 90,000 workers. The news followed an announcement Friday that Deutsche Bank’s investment banking chief, Garth Ritchie, was stepping down by mutual agreement.

-----

All of the investigations are a “negative,” said Ibrahim of CFRA, adding that it reaffirms why “the market has been concerned about the bank’s legal risk.”

It comes at a time when Deutsche is also struggling to put years of legal troubles behind it. In 2016, it agreed to a $7.2 billion settlement for a mortgage-abuse case with the U.S. Justice Department and in 2018 agreed to pay $240 million to settle accusations it conspired with other banks to manipulate a key interest rate.

----

The bank is also at the center of one of the largest money-laundering cases in history, involving Danske, Denmark’s largest bank. Authorities are investigating $233 billion in suspicious transactions moving through the bank’s tiny branch in Estonia — nearly 10 times larger than that country’s gross domestic product. Deutsche Bank helped transfer funds on behalf of Danske, which has said it has improved its internal systems to fight financial crime.

-----

Seven Democrats on the Senate Banking Committee have also asked the Federal Reserve to probe whistleblower allegations, first reported by the New York Times last month, that Deutsche Bank buried suspicious activity from accounts associated with Trump and his son-in-law and senior White House adviser Jared Kushner.

https://www.washingtonpost.com/business/...bf845572b3

**spɹɐʍoɔ snoɯʎuouɐ**