Monday, October 3, 2016

Deutsche Bank is "On the Brink"

The most important bank in all of Europe is having some serious problems.

If this bank pops it may make other folks around the world question the confidence that they have in their banks.

The largest and most important bank in the largest and most important economy in Europe is imploding right in front of our eyes.  Deutsche Bank is the 11th biggest bank on the entire planet, and due to the enormous exposure to derivatives that it has, it has been called "the world's most dangerous bank".  

Over the past year, I have repeatedly warned that Deutsche Bank is heading for disaster and is a likely candidate to be "the next Lehman Brothers".  

On September 16th, the Wall Street Journal reported that the U.S. Department of Justice wanted 14 billion dollars from Deutsche Bank to settle a case related to the mis-handling of mortgage-backed securities during the last financial crisis.  

As a result of that announcement, confidence in the bank has been greatly shaken, the stock price has fallen to record lows, and analysts are warning that Deutsche Bank may be facing a "liquidity event" unlike anything that we have seen since the collapse of Lehman Brothers back in 2008.

At one point on Friday, Deutsche Bank stock fell below the 10 euro mark for the first time ever before bouncing back a bit.  A completely unverified rumor that was spreading on Twitter that claimed that Deutsche Bank would settle with the Department of Justice for only 5.4 billion dollars was the reason for the bounce.

But the size of the fine is not really the issue now.  Shares of Deutsche Bank have fallen by more than half so far in 2016, and this latest episode seems to have been the final straw for the deeply troubled financial institution.  Old sources of liquidity are being cut off, and nobody wants to be the idiot that offers Deutsche Bank a new source of liquidity at this point.

As a result, Deutsche Bank is potentially facing a "liquidity event" on a scale that we have not seen since the financial crisis of 2008.  The following comes from Zero Hedge...

It is not solvency, or the lack of capital - a vague, synthetic, and usually quite arbitrary concept, determined by regulators - that kills a bank; it is - as Dick Fuld will tell anyone who bothers to listen - the loss of (access to) liquidity: cold, hard, fungible (something Jon Corzine knew all too well when he commingled and was caught) cash, that pushes a bank into its grave, usually quite rapidly: recall that it took Lehman just a few days for its stock to plunge from the high double digits to zero.

It will be very interesting to see how desperate things become before the German government finally gives in to the pressure.

The complete and total collapse of Deutsche Bank would be an event many times more significant for the global financial system than the collapse of Lehman Brothers was.  

Global leaders simply cannot afford for such a thing to happen, but without serious intervention it appears that is precisely where we are heading.


You see friends, it's all about CONFIDENCE.  When everyone starts losing confidence in a company...everyone wants to sell the stock and get their debts collected as soon as possible because no one wants to get stuck holding the worthless paper!

Notice that this same lesson also applies to nations.  Look at Venezuela.  People have lost confidence in that nation's ability to govern itself, pay it's bills, collect it's taxes or pay it's military.  So everyone tried to get all their wealth out of the nation ASAP and it may very well enter a death spiral.

One day the exact same thing will happen to America.  Right now we are the beneficiary of a very shaky world so we are viewed by many as the LEAST-WORST place to this may help to explain why we haven't collapsed under a mountain of debt already.

What might make the world lose confidence in the USA....causing it to collapse in a very short amount of time?

One thing I can think of would be if millions of American's suddenly vanish from this Satanic world and get called up into the clouds to meet Jesus.

When the happens, the chaos, confusion and collapse will be unlike anything the world has EVER seen.

1 John 5:19
We know that we are children of God, and that the whole world is under the control of the evil one.

1 Thessalonians 4:17
17 After that, we who are still alive and are left will be caught up together with them in the clouds to meet the Lord in the air. And so we will be with the Lord forever.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home