Deutsche Bank craters

Suradit69 · September 30, 2016

Another European bank is on the verge of collapse unless Angela Merkel decides to bail it out ... and it takes worldwide indices down with it as people contemplate a Lehman moment. You have to laugh when people worry about keeping money in Thai banks.

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Edited September 30, 2016 by Suradit69

OMGImInPattaya · September 30, 2016

Yep, that plan of forcing new loans on Greece so that they can keep making payments on their German bank loans seems to be working a treat. It seems that Merkel has really lost the plot the past few years...needs to go back to her physics lab.

SgtRock · September 30, 2016

More bad news for Deutsche Bank

Shares price has fallen below euro 10 that many economists / analysts said was the point of no return

Quote

Deutsche Bank shares open at record lows in Europe

Quote

The shares extended losses overnight in New York trading to fall below €10 (£8.60) for the first time ever.

The latest slide followed reports that some hedge funds had taken out cash and withdrawn positions in its investment bank.

http://www.bbc.com/news/business-37516805

kotsak · September 30, 2016

When DB goes under, Lehman's will look peanuts when compared to it.

Edited September 30, 2016 by kotsak

midas · September 30, 2016

2 hours ago, kotsak said:

When DB goes under, Lehman's will look peanuts when compared to it.

Oh yes and there are those who still believe there is no risk of contagion and this is all totally ring fenced

chiang mai · September 30, 2016

Are you scaremongering again Midas and/or are you still reading that silly hedge report thingy!

FWIW everyone, Midas's chart showing DB gross derivative exposure FAILS to make mention, as any GROSS view would, of the offset positions and counter balances required by law - the NET position is not even close to the graph but hey, it makes for a great scare story so please do continue, if you really must!

midas · September 30, 2016

2 hours ago, chiang mai said:

Are you scaremongering again Midas and/or are you still reading that silly hedge report thingy!

FWIW everyone, Midas's chart showing DB gross derivative exposure FAILS to make mention, as any GROSS view would, of the offset positions and counter balances required by law - the NET position is not even close to the graph but hey, it makes for a great scare story so please do continue, if you really must!

how do you know they have complied with the law ? You don’t know any more than anyone else. Nobody knows because it is a totally UNREGULATED market.

It’s a giant casino which worldwide has now reached $1,500,000,000,000,000,000 (1.5 quadrillion dollars) and no one can possibly forecast how all this is going to unravel - particularly against the backdrop of rumours that Germany’s Commerzbank may now also be in trouble and of course the Italian banking crisis.

Anthony5 · September 30, 2016

I guess the $14bn fine is also not a gods gift .

https://www.theguardian.com/business/2016/sep/16/deutsche-bank-14bn-dollar-fine-doj-q-and-a

midas · September 30, 2016

storm clouds are gathering

Is another German bank in trouble?

http://www.telegraph.co.uk/business/2016/09/29/now-another-german-bank-is-in-trouble-commerzbank-to-cut-9600-jo/

ING Plans Thousands of Job Cuts, Het Financieele Dagblad Reports

http://www.bloomberg.com/news/articles/2016-09-30/ing-plans-thousands-of-job-cuts-het-financieele-dagblad-reports

midas · October 2, 2016

On 9/30/2016 at 6:04 PM, chiang mai said:

Are you scaremongering again Midas and/or are you still reading that silly hedge report thingy!

FWIW everyone, Midas's chart showing DB gross derivative exposure FAILS to make mention, as any GROSS view would, of the offset positions and counter balances required by law - the NET position is not even close to the graph but hey, it makes for a great scare story so please do continue, if you really must!

" any GROSS view would, of the offset positions and counter balances required by law "

And banksters have such respect for complying with the law don't they chiang mai ?

Deutsche Bank Charged By Italy For Market Manipulation, Creating False Accounts

........” six current and former managers of Deutsche Bank, including Michele Faissola, Michele Foresti and Ivor Dunbar, were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank, Monte Paschi “

“judge approved a request by Milan prosecutors to try the bankers on charges involving two separate derivative transactions arranged with Nomura and Deutsche Bank “

http://www.bloomberg.com/news/articles/2016-10-01/deutsche-bank-paschi-nomura-staff-charged-over-false-accounts-itr5z2ku

augustwest · October 2, 2016

I'm waiting for Wells to hit 40 and a 4% dividend. I'll be all over it then.

fletchsmile · October 3, 2016

When people talk about gross notional amounts on derivatives as part of their scaremongering about credit risk it really just demonstrates their total lack of understanding of what these derivatives contracts are. Or the press/ media websites just like to draw on them to make their stories look more dramatic and sell their stories more.

I'd suggest googling and reading around the following terms among others:

- ISDA Master agreement

- ISDA section 6

- Close-out netting

- Collateral and Credit Support Annex

... to get a grasp of how gross amounts owed between two counterparties will very commonly be subject to legally enforceable netting arrangements where the individual receipts and payment transactions can be netted into a single payment in the event of a default or other termination event

ISDA standardised master agreements are legally enforecable in over 50 countries.... commonly allowing you to net what you owe with what you are owed

Cheers

Fletch :)

Edited October 3, 2016 by fletchsmile

midas · October 3, 2016

1 hour ago, fletchsmile said:

When people talk about gross notional amounts on derivatives as part of their scaremongering about credit risk it really just demonstrates their total lack of understanding of what these derivatives contracts are. Or the press/ media websites just like to draw on them to make their stories look more dramatic and sell their stories more.

I'd suggest googling and reading around the following terms among others:

- ISDA Master agreement

- ISDA section 6

- Close-out netting

- Collateral and Credit Support Annex

... to get a grasp of how gross amounts owed between two counterparties will very commonly be subject to legally enforceable netting arrangements where the individual receipts and payment transactions can be netted into a single payment in the event of a default or other termination event

ISDA standardised master agreements are legally enforecable in over 50 countries.... commonly allowing you to net what you owe with what you are owed

Cheers

Fletch :)

“ to get a grasp of how gross amounts owed between two counterparties will very commonly be subject to legally enforceable netting arrangements “

You are very good at advising people on investment strategies on this forum but I can’t see how you can possibly have a greater insight than anyone else into what has actually happened behind-the-scenes (versus theory) since 2008 even if you were a Deutsche bank employee because the derivatives market is unregulated.

And just by looking at the nature of recent banking scandals such as Monte Paschi , Wells Fargo and Deutsche bank itself with a shocking history of scandals over the past few years (which concedes it is now facing 7,000 separate lawsuits ) no one really knows just how far corruption and illegal practices have pervaded derivatives held by this bank.

fletchsmile · October 3, 2016

In terms of technical insight, let's just say I have both the theoretical and practical experience in handling these type of portfolios and products, and have done so, across the whole spectrum of accounting risk and capital, for banks, including close-out netting.

This puts me in a great position to read these scaremongering websites, press articles etc and know that most of these people writing or "reporting" don't actually know what they're talking about when it comes to the technical side. Quoting the gross amounts on derivatives portfolios without any mention of netting vastly overstates the credit risk and exposures. Unfortunately these misconceptions and "tenth truths" (half truth would be exaggerating :) ) are then picked up by even less knowledgeable people and passed on

Even for over the counter / OTC transactions which are not on a regulated exchange there are still valid agreements to let people legally net in over 50 countries. If we've say 20 transactions between 2 companies for USD 1 billion, does anyone seriously think that if someone has a legal master agreement in place, a bank would actually make all the payment sides separately from all the receipts, if the other side defaults or can't pay?

Not to mention also that these are "contracts for differences" and in many cases that USD 1bn is just a notional reference to calculate the cash flows on. Very simple example:

eg someone might be paying 4% of USD 1bn and the other party pay Libor + x %, which may happen be say 5%,. Realistically that is one side needing to pay say USD 40mn and the other side needing to pay USD50mn. Both amounts are far smaller than the notional amount... and that's before we've started netting the dues in a close-out

So yes, while I agree Deutsche has been involved in more than its fair share of scandals, and people will find it difficult to know exactly what is going on, the part I take issue with is the total lack of understanding and quantification by these "journalists" who don't know what they're talking about :) That bit I do have insight on :)

Edited October 3, 2016 by fletchsmile

Naam · October 3, 2016

On 9/30/2016 at 6:04 PM, chiang mai said:

Are you scaremongering again Midas and/or are you still reading that silly hedge report thingy!

FWIW everyone, Midas's chart showing DB gross derivative exposure FAILS to make mention, as any GROSS view would, of the offset positions and counter balances required by law - the NET position is not even close to the graph but hey, it makes for a great scare story so please do continue, if you really must!

same old, same old Midas bs since eight years.

i tried several times hard to explain gross positions / counter positions / net balance but to no avail. what is not known is how much margin DB used to build up that volume.

midas · October 4, 2016

16 hours ago, fletchsmile said:

In terms of technical insight, let's just say I have both the theoretical and practical experience in handling these type of portfolios and products, and have done so, across the whole spectrum of accounting risk and capital, for banks, including close-out netting.

This puts me in a great position to read these scaremongering websites, press articles etc and know that most of these people writing or "reporting" don't actually know what they're talking about when it comes to the technical side. Quoting the gross amounts on derivatives portfolios without any mention of netting vastly overstates the credit risk and exposures. Unfortunately these misconceptions and "tenth truths" (half truth would be exaggerating :) ) are then picked up by even less knowledgeable people and passed on

Even for over the counter / OTC transactions which are not on a regulated exchange there are still valid agreements to let people legally net in over 50 countries. If we've say 20 transactions between 2 companies for USD 1 billion, does anyone seriously think that if someone has a legal master agreement in place, a bank would actually make all the payment sides separately from all the receipts, if the other side defaults or can't pay?

Not to mention also that these are "contracts for differences" and in many cases that USD 1bn is just a notional reference to calculate the cash flows on. Very simple example:

eg someone might be paying 4% of USD 1bn and the other party pay Libor + x %, which may happen be say 5%,. Realistically that is one side needing to pay say USD 40mn and the other side needing to pay USD50mn. Both amounts are far smaller than the notional amount... and that's before we've started netting the dues in a close-out

So yes, while I agree Deutsche has been involved in more than its fair share of scandals, and people will find it difficult to know exactly what is going on, the part I take issue with is the total lack of understanding and quantification by these "journalists" who don't know what they're talking about :) That bit I do have insight on :)

“Quoting the gross amounts on derivatives portfolios without any mention of netting vastly overstates the credit risk and exposures “

I am sure you have great experience and insight regarding this topic and you can probably get away with accusing many people of exaggerating and scaremongering regarding the potential risks. But equally surely you are not going to suggest those outside the media who probably have just as much market expertise as you who but who take an opposing view to yours would be wrong ? Take Egon von Greyerz Managing Director of Matterhorn Asset Management AG based in Zurich Switzerland. This is what he has to say about the overall situation and he addresses the point you make about netting in the part which is underlined

“ Just take Deutsche Bank, their derivatives position is officially $75 trillion. The real figure is probably over $100 trillion but let us accept the $75T. DB’s equity is $83B. This means that just 0.1% loss on the gross derivatives position is enough for DB to go under. It is virtually guaranteed that any loss on their derivatives would exceed 0.1% of gross value. DB is also too big for Germany. DB’s derivatives position is 24 x German GDP and equal to global GDP. Clearly too big to save and too big for the country and the world! But the Bundesbank and the ECB will try and thus create a new hyperinflationary Weimar Republic for Germany.

When the next crisis comes, the derivatives loss could be 100% of the gross exposure. The Great Financial Crisis that started in 2007 was only temporarily patched up. The exposure in the financial system is today a lot bigger than it was in 2007. Banks will of course argue that their net exposure is much smaller. In theory that is correct but when counterparty fails, gross exposure becomes the actual loss.

It is very likely that the total global derivatives exposure of at least $1.5 quadrillion will not just lead to another financial crisis but to The Great Financial Disaster. The bubbles in all asset markets that governments and central banks have created in the last 25 years must implode before real growth in the world can resume again.”

fletchsmile · October 5, 2016

Sorry, what the guy has written is absolute garbage and the guy really hasn't a clue what he is talking about with some of those claims.

Firstly he has tried to pull gross notional amount. To suggest or even imply that banks would lose the gross amount of their entire notional exposures is just laughable and the biggest give away he has no clue.

The gross fair value of the derivatives positions (depending on whether you want to take the assets or liabilities) is more in the ball park of half a trillion. Even with the most fertile imagination someone who knows what they are talking about wouldn't be saying or even implying this could lead to losses of 75 trillion across the likely portfolios in Deutsche. Utter garbage and totally disingenious.

That half a trillion would then be subject to netting agreements, where the positive fair values on derivatives of ball park 600 billion would offset to a large extent the ball park 500 billion negative values. Note also its positive values exceed the negative. While these obviously don't reflect how high the maximum potential future exposure could be on one side only, and are more indicative of current exposure, these are much more sensible numbers to work than 75 trillion.

After netting and collateral you're probably looking at ball park about 1/10 of that half a trillion on its derivatives trading assets.

The guy has also not understood diversification. Nor has he understood other regulatory limits in place. e.g. In addition regulatory limits on single counterpary exposures would also mean that those amounts simply aren't allowed to be owed from a single counterparty. They are limited to a % based on the companies capital (of around 80 billion in Deutsche's casse). In turn banks transaction with Deutshe will also be subject to limits based on their own capital.

So even if someone tried taking just one gross side of the half a trillion, and totally ignored netting, there's no way that half a trillion is concentrated on just one counterparty.

Quote

When the next crisis comes, the derivatives loss could be 100% of the gross exposure. The Great Financial Crisis that started in 2007 was only temporarily patched up. The exposure in the financial system is today a lot bigger than it was in 2007. Banks will of course argue that their net exposure is much smaller. In theory that is correct but when counterparty fails, gross exposure becomes the actual loss.

I googled the guy. Oh look, he runs a company trying to get people to invest in gold No bias whatsoever there.

Reading his career summary, while he started in banking, it seems he didn't last very long, as he spent 17 years in Finance with Dixons (electrical store LOL ) before experience with this group of companies. Sorry but your average accountant or even FD of this type of company hasn't a clue in this field, as he's demonstrating

Quote

GoldSwitzerland advises investors on precious metals investments and buys, sells, transfers and stores precious metals for investors. The metals are stored in the name of the clients in ultra-secure vaults in Switzerland. MAM also assists clients in transferring existing gold and silver holdings out of the banking system to the private vaults.

https://goldswitzerland.com/about-us/

So:

1) definitely not a world class as an expert in this field, nor even a mere specialist in it; and

2) definitely not objective, given the conflict of interest he has selling gold and the likes to protect people from

3) the guy is totall confused when he thinks gross notional exposure is what banks would lose

To be honest it really is a waste of time explaining these things. Thanks for the reminder LOL

Cheers

Fletch :)

Edited October 5, 2016 by fletchsmile

fletchsmile · October 5, 2016

There's some more sensible perspective as well as numbers in the article below, which gives a few more different opinions in addition to the obviously biased one of Deutsche:

http://www.bloomberg.com/news/articles/2016-09-29/some-deutsche-bank-clients-said-to-reduce-collateral-on-trades

Although based on the bank's own numbers, they look much more reasonable. These are assets too

Quote

The International Monetary Fund in June said Deutsche Bank may be the biggest contributor to risk among so-called global systemically important banks. The bank has gross notional derivatives exposure of 46 trillion euros, according to an Investor Relations presentation published this month. After netting and collateral, reported derivative trading assets fall to 41 billion euros, the bank said.

As I say. Deutsche does have a lot of issues.

The part I take issue with though is people quoting magnitudes of losses equating to gross notional amounts of their derivatives. Particularly when they are peddling their own wares on the back of it.

Cheers

Fletch :)

Edited October 5, 2016 by fletchsmile

dinga · October 5, 2016

18 hours ago, fletchsmile said:

There's some more sensible perspective as well as numbers in the article below, which gives a few more different opinions in addition to the obviously biased one of Deutsche:

http://www.bloomberg.com/news/articles/2016-09-29/some-deutsche-bank-clients-said-to-reduce-collateral-on-trades

Although based on the bank's own numbers, they look much more reasonable. These are assets too

As I say. Deutsche does have a lot of issues.

The part I take issue with though is people quoting magnitudes of losses equating to gross notional amounts of their derivatives. Particularly when they are peddling their own wares on the back of it.

Cheers

Fletch :)

Bail In? Seems the likely solution https://www.livewiremarkets.com/wires/33344

fletchsmile · October 6, 2016

8 hours ago, dinga said:

Bail In? Seems the likely solution https://www.livewiremarkets.com/wires/33344

There's some reasonable thoughts in there. Deutsche does have profitability issues, which will affect its ability to internally generate capital in the future.

2 main points I'd disagree though:

1) Deutsche being bordeline for insolvency. Where we stand today, they are some way off that yet. "Woefully undercapitalised" is also harsh. Some issues, yes, but not not as bad as described.

A few other points worth noting: The European Banking Association (EBA) stress tests, showed them going down to 7.8% CET1 in 2018 under a severe stress scenario - which included some litigation, but probably not all the potential of 14bn. That's under a severe stress scenario not base case expectations.

I believe they've already provided around EUR 5.5bn / USD 6+bn ball park for DoJ litigation and roughly every 1bn extra on top of that reduces their CET1 ratio by 25basis points (0.25%). So let's say there's maybe an extra 1.75% - 2% impact if they really do get hit with the full 14bn

On today's Capital ratios that's still solvent. Even knocking 2% off the stress tests would be above the minimums

2) When the article says the "bank should be declared non-viable" I think someone/ a regulator would find it very difficult to support that declaration.

While in theory the regulator has the power to do so, various technical issues as well as legal issues stand in the way of a regulatory doing that given the position Deutsche is in at the moment. Then there's the political dimensions of doing so.

Simply put Deutsche isn't non-viable yet. A lot of problems yes. More to come yes. Non-viable some point in the future - possible.

For a regulator to declare that at this stage would set a very dangerous precedent, when there's actually no numbers supporting them going below the minimu capital requirements - yet. I wonder for example the legal implications if this can't be substantiated and investors/shareholders/bondholders lose out as a result and seek redress.

Also it would severely undermine any certainty around investments/ banks/ bonds etc if a regulator can declare a point of non viability (PONV) for a bank with CET1/ Tier1 in double digits. Currently they're well above the minimum regulatory capital requirements (MCR) even if not in good shape. If a regulator comes in and arbitrarily declares that for a bank in double digits how can an investor put money in any bank?

On some of their AT1 capital instruments I belive there are legal triggers at 5.125% capital ratio, so the regulators be getting way ahead of themselves declaring non-viability before those are even triggered.

Edited October 6, 2016 by fletchsmile

midas · October 6, 2016

Understanding Deutsche Bank’s $47 Trillion Derivatives Book

Size of figure can be misleading, but some of those assets are hard to value, stoking concern among investors

Quote

How vulnerable is Deutsche Bank to derivatives?

In its 2015 annual report, Deutsche Bank said its exposure to derivatives was €41.940 trillion ($46.994 trillion). As a comparison, Germany’s gross domestic product was €3.032 trillion in 2015. But that raw size can be misleading, since it covers the notional value of the derivatives

What is the problem then?

While the derivatives pile may not be as large as the headline number suggests, Deutsche Bank is sitting on a pile of assets that are hard to value when some investors don’t need much excuse to sell its stock. That unknown is contained in the Level 3 assets it holds, or those whose value is difficult to determine, such as complex derivatives and distressed debt.

Deutsche Bank has more Level 3 assets compared with its common equity Tier 1 ratio, a measure of financial strength, than its peers. Its Level 3 assets are estimated as being valued at 72% of its Tier 1 assets, . That compares with a 38% average for 12 global banks.

http://www.wsj.com/articles/does-deutsche-bank-have-a-47-trillion-derivatives-problem-1475689629

midas · October 6, 2016

On 10/5/2016 at 11:44 AM, fletchsmile said:

Sorry, what the guy has written is absolute garbage and the guy really hasn't a clue what he is talking about with some of those claims.

Firstly he has tried to pull gross notional amount. To suggest or even imply that banks would lose the gross amount of their entire notional exposures is just laughable and the biggest give away he has no clue.

The gross fair value of the derivatives positions (depending on whether you want to take the assets or liabilities) is more in the ball park of half a trillion. Even with the most fertile imagination someone who knows what they are talking about wouldn't be saying or even implying this could lead to losses of 75 trillion across the likely portfolios in Deutsche. Utter garbage and totally disingenious.

That half a trillion would then be subject to netting agreements, where the positive fair values on derivatives of ball park 600 billion would offset to a large extent the ball park 500 billion negative values. Note also its positive values exceed the negative. While these obviously don't reflect how high the maximum potential future exposure could be on one side only, and are more indicative of current exposure, these are much more sensible numbers to work than 75 trillion.

After netting and collateral you're probably looking at ball park about 1/10 of that half a trillion on its derivatives trading assets.

The guy has also not understood diversification. Nor has he understood other regulatory limits in place. e.g. In addition regulatory limits on single counterpary exposures would also mean that those amounts simply aren't allowed to be owed from a single counterparty. They are limited to a % based on the companies capital (of around 80 billion in Deutsche's casse). In turn banks transaction with Deutshe will also be subject to limits based on their own capital.

So even if someone tried taking just one gross side of the half a trillion, and totally ignored netting, there's no way that half a trillion is concentrated on just one counterparty.

I googled the guy. Oh look, he runs a company trying to get people to invest in gold No bias whatsoever there.

Reading his career summary, while he started in banking, it seems he didn't last very long, as he spent 17 years in Finance with Dixons (electrical store LOL ) before experience with this group of companies. Sorry but your average accountant or even FD of this type of company hasn't a clue in this field, as he's demonstrating

https://goldswitzerland.com/about-us/

So:

1) definitely not a world class as an expert in this field, nor even a mere specialist in it; and

2) definitely not objective, given the conflict of interest he has selling gold and the likes to protect people from

3) the guy is totall confused when he thinks gross notional exposure is what banks would lose

To be honest it really is a waste of time explaining these things. Thanks for the reminder LOL

Cheers

Fletch :)

" Sorry but your average accountant or even FD of this type of company hasn't a clue in this field "

Then how about a Professor of Finance and Economics ?

Quote

Professor Kevin Dowd, Professor of Finance and Economics at Durham University Business School and a partner in Cobden Partners based in London suggests that Deutsche Bank derivatives exposure is difficult to assess rationally; the value of its derivatives book

“is unreliable because many of its derivatives are valued using unreliable methods. Like many banks, Deutsche uses a three-level hierarchy to report the fair values of its assets. The most reliable, Level 1, applies to traded assets and fair-values them at their market prices. Level 2 assets (such as mortgage-backed securities) are not traded on open markets and are fair-valued using models calibrated to observable inputs such as other market prices. The murkiest, Level 3, applies to the most esoteric instruments (such as the more complex/illiquid Credit Default Swaps and Collateralized Debt Obligations) that are fair-valued using models not calibrated to market data – in practice, mark-to- myth. The scope for error and abuse is too obvious to need spelling out.”

Edited October 6, 2016 by midas

impulse · October 6, 2016

On 9/30/2016 at 6:04 PM, chiang mai said:

Are you scaremongering again Midas and/or are you still reading that silly hedge report thingy!

FWIW everyone, Midas's chart showing DB gross derivative exposure FAILS to make mention, as any GROSS view would, of the offset positions and counter balances required by law - the NET position is not even close to the graph but hey, it makes for a great scare story so please do continue, if you really must!

Your argument would be a little more reassuring if our collective butts didn't still sting from the reaming we took in 2008. Nobody knows what's buried deep in their books, and nobody knows what the multiplier will be if and when all the counterparties to their derivatives tally up the ripple effect.

Ace of Pop · October 6, 2016

So the wealth n assets they stole and put with the Swiss Cowards during W.W.2 has run out .Oh Dear ,How Sad ,Never Mind.

Sent from my iPhone using Thaivisa Connect

chiang mai · October 6, 2016

1 hour ago, impulse said:

Your argument would be a little more reassuring if our collective butts didn't still sting from the reaming we took in 2008. Nobody knows what's buried deep in their books, and nobody knows what the multiplier will be if and when all the counterparties to their derivatives tally up the ripple effect.

Most if not all of the problems facing Deutsche Bank are rooted in unresolved issues resulting from 2008, it's nothing new, just unresolved albeit compounded.

midas · October 6, 2016

30 minutes ago, chiang mai said:

Most if not all of the problems facing Deutsche Bank are rooted in unresolved issues resulting from 2008, it's nothing new, just unresolved albeit compounded.

" it's nothing new, "

ROFL

chiang mai did you used to be a bankster yourself to repeatedly surreptitiously defend these crooks?

Deutsche Bank Mismarked 37 Deals Like Paschi’s, Audit Says

Quote

Deutsche Bank AG, indicted for colluding with Banca Monte dei Paschi di Siena SpA to conceal the Italian lender’s losses, mismarked the transaction and dozens of others on its own books, according to an audit commissioned by Germany’s regulator.

“Very complex deals prevent the market and regulators from properly understanding the state of a bank’s balance sheet, inhibiting proper regulatory monitoring and distorting market discipline,” said , a law professor at the University of Edinburgh.Emilios Avgouleas

Investors have been rattled by speculation that some of Deutsche Bank’s most complex deals are an “accident waiting to happen,” Jacques-Henri Gaulard, a London-based analyst at Kepler Cheuvreux, wrote to clients on Sept. 29. The lender has about 29 billion euros of so-called Level 3 assets, which are the hardest to value, dwarfing its market value of about 16 billion euros.

http://www.bloomberg.com/news/articles/2016-10-06/deutsche-bank-mismarked-37-loans-like-monte-paschi-s-audit-says

Edited October 6, 2016 by midas

midas · October 6, 2016

43 minutes ago, chiang mai said:

Most if not all of the problems facing Deutsche Bank are rooted in unresolved issues resulting from 2008, it's nothing new, just unresolved albeit compounded.

WRONG !!!

As Bloomberg reported today prosecutors have been reconstructing how Monte Paschi’s former managers misrepresented the lender’s finances in the years through the two deals signed with Deutsche Bank in 2008 and Nomura in 2009. The investigation revealed Monte Paschi arranged the transactions to hide billions in losses that led to false accounting between 2008 and 2012, according to a prosecutors’ statement released Jan. 14, when they completed the investigation. To be sure, Deutsche Bank's intimate relationship with Monte Paschi is not new, and had been public knowledge ever since it first emerged in January 2013 that the German bank, as part of its long-standing relationship with the just as scandalous insolvent Italian bank, had used a complex transaction, dubbed Santorini, to mask losses from an earlier derivative contract.

Edited October 6, 2016 by midas

chiang mai · October 6, 2016

16 minutes ago, midas said:

" it's nothing new, "

ROFL

chiang mai did you used to be a bankster yourself to repeatedly surreptitiously defend these crooks?

Deutsche Bank Mismarked 37 Deals Like Paschi’s, Audit Says

http://www.bloomberg.com/news/articles/2016-10-06/deutsche-bank-mismarked-37-loans-like-monte-paschi-s-audit-says

Like I said, the problems affecting DB are related issues regarding 2008:

"BILLS for pre-crisis buccaneering are still coming in. Deutsche Bank, Germany’s biggest lender, confirmed on September 15th that America’s Department of Justice (DoJ) had asked for $14 billion to settle possible claims connected with the underwriting and sale of residential mortgage-backed securities (RMBSs) between 2005 and 2007. The next day Deutsche’s share price, already reeling after a wretched year, plunged by 8%. It was groggier still after the weekend, closing on September 20th at a 30-year low".

http://www.economist.com/news/finance-and-economics/21707567-14-billion-demand-america-adds-german-lenders-troubles-wont-pay?zid=300&ah=e7b9370e170850b88ef129fa625b13c4

One of the many problems of course is that the tabloids, and I include zero hedge in that category of gutter rags, jump on the numbers and extrapolate them to suit whatever horror story they are selling that week, case in point is Midas's own trillions and trillions of derivatives blah blah blah. It is of course not a matter of trying to defend anyone but more a case of understanding what is being said by who and why and what part any story plays in the bigger picture, others however may wish to merely buy the headline, mostly an attention deficit issue I suspect!

midas · October 6, 2016

50 minutes ago, chiang mai said:

Like I said, the problems affecting DB are related issues regarding 2008:

"BILLS for pre-crisis buccaneering are still coming in. Deutsche Bank, Germany’s biggest lender, confirmed on September 15th that America’s Department of Justice (DoJ) had asked for $14 billion to settle possible claims connected with the underwriting and sale of residential mortgage-backed securities (RMBSs) between 2005 and 2007. The next day Deutsche’s share price, already reeling after a wretched year, plunged by 8%. It was groggier still after the weekend, closing on September 20th at a 30-year low".

http://www.economist.com/news/finance-and-economics/21707567-14-billion-demand-america-adds-german-lenders-troubles-wont-pay?zid=300&ah=e7b9370e170850b88ef129fa625b13c4

One of the many problems of course is that the tabloids, and I include zero hedge in that category of gutter rags, jump on the numbers and extrapolate them to suit whatever horror story they are selling that week, case in point is Midas's own trillions and trillions of derivatives blah blah blah. It is of course not a matter of trying to defend anyone but more a case of understanding what is being said by who and why and what part any story plays in the bigger picture, others however may wish to merely buy the headline, mostly an attention deficit issue I suspect!

" but more a case of understanding what is being said by who and why and what part any story plays in the bigger picture "

more a case of who will bear the consequences of this ongoing criminality ?

Edited October 6, 2016 by midas

swissie · October 6, 2016

Look south folks, look south. Look at the Italian Banks.

Cheers.

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