All signs
show now that a new, big financial storm is about to erupt on the
Frankenstein's creation called eurozone. It seems that the German
monsterbank is about to collapse, breaking this "marvelous"
euro architecture into pieces.
As mentioned
in investmentresearchdynamics.com
:
With rumors flying because of DB
[Deutsche Bank] ’s stock performance this year, management
issued a statement defending the bank’s liquidity position [...]
Suffice it to say that historically, when a bank has been forced
to issue a statement defending its solvency, insolvency is not far
behind. We saw this with Bear Stearns and Lehman. Denial of a
catastrophic problem is affirmation that the problem is very real.
Typically the credit markets sniff
out a very real problem before the equity market “catches up.”
Deutsche Bank has emerged as one of the most recklessly managed
“Too Big To Fail” banks. Under Anshu Jain’s “leadership,”
DB became a financial nuclear weapon bloated on derivatives,
exceedingly risky assets and highly corrupt upper management.
It’s a literal cesspool of financial fraud and Ponzi scheme
banking activity.
[...]
Currently DB has roughly $2 trillion
assets supported by $68 billion of book value. The problem is
that many of its assets are highly overstated in value and have
yet to be written down. The financial world shuddered at the $7
billion of admitted write-offs DB took in 2015. The problem is
that over 85% of the charges taken by DB were attributed to legal
costs. We know its “on-balance-sheet” assets are being
reported at a significantly overvalued stated level. DB has big
loans to the energy sector, Glencore, Volkswagon/Audi and other
sundry highly risky businesses. It would only take a 3.5%
write-down of its asset base to wipe out its book value.
THEN there’s the derivatives. DB
has $58 trillion of notional amount in OTC derivatives hidden off
its balance sheet. The bank will claims most of that is hedged
out and the “netted” amount is a sliver of the notional
amount. But ask AIG and Goldman Sachs how hedging / netting works
out in the long run. “Netting” is only relevant when
counterparties are prevented by Central Banks from defaulting.
Once the defaults start, “net” becomes “notional” in a
hurry.
[...]
The current era’s first big bank
casualty will likely be Deutsche Bank, unless the German
Government and the EU and U.S. Central Banks determine that a DB
collapse would collapse the west, which it likely would. To put
this in perspective, DB’s stated assets are $2 trillion.
Germany’s GDP is just under $4 trillion. Then there’s the
derivatives…
|
According to
other estimations, the expose of the bank to derivatives, is even
higher. As mentioned in previous article
: “Only Deutsche Bank, the largest bank in Germany, is
significantly exposed, holding dubious financial products known as
'derivatives', worth 67 trillion euros. This amount is similar to the
GDP of the entire world and 20 times greater than the GDP of Germany.
Any comparison with the situation of the bank Lehman Brothers in 2008
would not be irrelevant. Just when Lehman Brothers went bankrupt, had
available derivatives of only 31.5 trillion. The crisis of 2008
confirmed the concise definition of derivatives as proposed by the
American tycoon Warren Buffet: 'financial weapons of mass
destruction.'”
It is quite
clear that the euro-system could collapse any moment and not because
of the usual scapegoat called Greece. Considering that the expose of
the German monsterbank to derivatives is higher compared to that of
Lehman, we can only imagine what the bubble burst would bring. In
reality, however, no one has an idea of what the day after would look
like, due to the unprecedented euro-currency experiment.
In reality,
Berlin does not want to destroy eurozone because the euro-currency is
the tool to impose the Greek model to all the debt colonies. But that
doesn't mean it can prevent a disaster which might lead to an
ugly ending of this currency. It is almost certain that the Germans
and others have ready plans to return to the national currency.
In case that
the German monster fall to the ground, everyone will run for their
lives. Greece will be left in the worst position, as it is now
totally dependent on Draghi's liquidity injections, after five years
of a systematic economic destruction by the EFD-IMF axis.
Unfortunately,
Tsipras administration has been proved unreliable to design a viable
Grexit option. But now, Greece has the last chance to design such an
option, in order to limit the terrifying, unpredictable consequences
of the ugly collapse. There is a little time left for Grexit, which
could be proved the lifeboat that would help Greece survive from the
sinking of the Titanic.
for a Greek like Ulixes it could be possible, but for the Greeks nowadays...I do not know!
ReplyDeletefor a Greek like Ulixes it could be possible, but for the Greeks nowadays...I do not know!
ReplyDelete