A Bank With 49 Trillion Dollars In Exposure To Derivatives Is Melting Down Right In Front Of Our Eye

Discussion in 'The Cocktail Lounge' started by Bodacious, Jul 20, 2019.

  1. Bodacious

    Bodacious Active Member

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    Could it be possible that we are on the verge of the next “Lehman Brothers moment”? Deutsche Bank is the most important bank in all of Europe, it has 49 trillion dollars in exposure to derivatives, and most of the largest “too big to fail banks” in the United States have very deep financial connections to the bank. In other words, the global financial system simply cannot afford for Deutsche Bank to fail, and right now it is literally melting down right in front of our eyes.

    For years I have been warning that this day would come, and even though it has been hit by scandal after scandal, somehow Deutsche Bank was able to survive until now. But after what we have witnessed in recent days, many now believe that the end is near for Deutsche Bank. On July 7th, they really shook up investors all over the globe when they laid off 18,000 employees and announced that they would be completely exiting their global equities trading business

    Please read the entire article at:
    https://www.activistpost.com/2019/0...-melting-down-right-in-front-of-our-eyes.html
     
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  2. Money123

    Money123 New Member

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    Well noted. I agree future meltdown.
     
  3. Onepoint272

    Onepoint272 2019 Stockaholics Contest Winner

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    Yeah they've been a sinking ship since 2007 when they traded at $140, and they still trade at a PE in the mid 100s. However, they have or are very near to meeting the downside point and figure targets and check out the capitulating volume on the most recent decline. For every seller there is a buyer and the buyers are probably not us poor dumb and under-capitalized people. Yeah, it could go belly up, but not for a long while I think, not until those buyers get their money back with interest.

    upload_2019-7-20_11-2-41.png
     
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  4. Onepoint272

    Onepoint272 2019 Stockaholics Contest Winner

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    I wouldn't short it here.

    Weekly bars:
    upload_2019-7-20_12-27-6.png
     
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  5. TomB16

    TomB16 Well-Known Member

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    I'm someone who considers the integrity of the global banking system to be marginal. These are the folks who gamble with our money, repackage loan defaults, provide deceptive macro market guidance publicly that is the opposite of their own actions and advice to their largest clients. In short, there are plenty of people with low to no morals in the banking industry.

    But, I'd be careful to directly equate derivatives with evil. Few people have any idea how much derivatives permeate our financial system. Like them or not, they are ubiquitous.

    When people buy $500 shares of VOO, they probably think Vanguard is going to buy $500 worth of stocks that are listed on the S&P 500 index. It sounds ridiculous, when you consider it.

    I would imagine VOO owns a good deal of shares represented in the S&P 500 but they also hold a lot of derivatives. If you dig deep into the ETF boilerplate fine print, you will discover they don't have to hold what they say they hold. They only have to simulate the returns of the indicated holdings. They do this with derivatives.

    The derivatives at Deutsche Bank could be poisonous or they could be reasonable, healthy, investments. To judge it, would require a much deeper dive than just enumerating the market value of their derivatives.
     
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  6. dushkuloriccx

    dushkuloriccx New Member

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    Many banks attract new customers with a free account switching service, i.e., the new bank takes care of all the formalities resulting from the current account switch. Even if the bank you choose doesn't explicitly advertise an account switching service, it has been required to take it on since 2016. Since then, there has been a law requiring banks to cooperate when switching accounts. I learned at https://www.girokontokuendigen.de/de/ that, For everything to go smoothly, you need to send the new bank a list of your regular playing partners. This includes, for example, employers, landlords, energy providers, telecommunications companies, insurance companies, etc.
     
    #6 dushkuloriccx, Sep 4, 2021
    Last edited: Sep 5, 2021

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