Deutsche Bank’s Zepelin Demise

October 2, 2016

Last scene of Margin Call derivatives being sold. All these financial instruments that were dumped landed somewhere perhaps inflating the Deutsche Bank hot air balloon.

Meanwhile Deutsche Bank has vowed to challenge a $14bn claim by the US Department of Justice to settle an investigation into its selling of mortgage-backed securities.

 

 

http://www.cnbc.com/2016/09/29/amid-deutsche-bank-woes-rival-german-lender-announces-a-major-overhaul.html

“Germany’s second largest bank by assets, Commerzbank, announced an overhaul of its structure on Thursday following what it called “current market rumors.”

 The lender said Thursday that it would make a net reduction of 7,300 jobs at the company and will stop paying dividends for the time being amid a drive to sustainably increase its profitability by 2020. The cost of the restructure would be in the region of 1.1 billion euros ($1.2 billion), it said in a statement, and the plans would be ratified by its supervisory board on Friday.”

The trouble with Deutsche Bank is it sits on a financial portfolio upwards of $50trillion of financial instruments.

'If you really cared about me, you'll swim back to the boat and get my bottle of wine.'

‘If you really cared about me, you’ll swim back to the boat and get my bottle of wine.’

In a growth pyramid profits can be huge. Following 2008 there has been increasing effort to regulate derivatives and conduct business on public exchanges. Regulation has paved the way for more scrutiny of financial markets and loss of investor confidence. In turn this has led to market collapse of share price of Deutche Bank. Global recession and negative interest rates have put further pressure on this bank.

It may well be if the bank is considered too big to fail TBTF that it will be broken up into manageable parts. Its too bog to bail out. The danger is that a bank run and collapse will leave investors stranded. In Cyprus there has already been precedent of Bail In. Investors should be worried at they stare into the vista of upwards of 50% loss on their deposits and investments.

 

Ireland’s Property Market Scam

FG have released their action plan on housing and its derelict.

In spite of its unveiling one family with 6 children turfed out of their rental accommodation last week spent a week in inhuman conditions and they will not get a house or proper accommodation of a civilised kind. Homelessness is still on the rise.

Houses are not being built as too many would bring the price down and bring those already committed into negative equity. Its Catch 22, ending the housing crisis could bring down the banks!

Worse EU fiscal rules prevent us adequately borrowing and investing in housing. We no longer live in a market economy but in an inflated Bubble pumped full of hot air and QE and borrowings all of which appear at the moment to be in slow motion self destruct mode.

One way the government could have acted to cap the ballooning property market would be to impose a tax on foreign investor firms responsible for around a fifth of Dublin house purchases.

They did this recently in Vancouver to put a brake on Chinese money pouring into Vancouver inflating real estate and putting purchase beyond the reach of locals. A 10% tax saw property prices fall within the week.

http://www.thejournal.ie/house-price-dublin-property-cso-2-2990654-Sep2016/?utm_source=shortlink

Instead we have Rent and Housing Supplements and stories of tax relief for first time buyers all of which will be pocketed by landlords in payment for their increasing rents.

I like this piece of waffle:

http://www.housing.gov.ie/housing/homelessness/coveney-launches-homelessness-pillar-under-rebuilding-ireland-action-plan

“DHPCLG will work closely with the ESRI and the Housing Agency to improve understanding of conditions in housing markets around the country and thereby better inform the implementation and design of current and future policy measures.

This work will involve preparing national and sub-national geographic breakdowns of actual and anticipated supply and demand, across tenure types, based on demographic and macroeconomic developments. There will also be scope for research focusing on specific housing-related themes. ”

ERmmmm  I thought the document would contain an Action Plan not an aspiration to pass the book to local authorities or some other institutional invisible with committees to come up with a specific plan.

I’m reading the document looking to see on an urban and regional basis the color coded map showing me where the residential house build will actually begin next week!

We’ve had an emergency in the HSE for the past 10 years and we now know we are short of approx 6 hospitals none of which will be built.

Now we embark on a similar journey towards homelessness. At least we could build homes when we were not a member of the EMU.

 

<Expect things to get worse>

http://rebuildingireland.ie/Rebuilding%20Ireland_Action%20Plan.pdf

http://www.irishexaminer.com/ireland/simon-coveney-outlines-plans-for-housing-solution-403718.html

nb  http://www.housing.gov.ie/housing/housing

http://www.housing.gov.ie/housing/housing-policy

http://www.housing.gov.ie/housing/rebuilding-ireland/minister-coveney-visits-galway-promote-rebuilding-ireland-action-plan

http://www.telegraph.co.uk/business/2016/09/26/the-deutsche-bank-crisis-could-take-angela-merkel-down–and-the/

https://goldsilver.com/blog/is-a-46-trillion-lehman-brothers-event-just-around-the-corner/

 

Till next time…

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4 Responses to “Deutsche Bank’s Zepelin Demise”

  1. Colin said

    Why do you write these very long articles. It must take up so much time. I don’t think people are reading them, and they aren’t really commenting on them either. Just wondering.

    • colmbrazel said

      Hi Colin,

      Thanks for reading the blog. I write based on informed views I research on topics relating to international shadow banking. Conclusions I draw are based on my own research and what I’ve learned. I invite others to do their own informed research. I do have more in common with international researchers who write on topics of interest to me but unfortunately there is little local concern or interest in same. It’s not my purpose to try and reach a mass audience. Having said that my views are out there for anyone to read. I include lots of links and information others can use as they see fit. It’s done with little resources and under time constraints mainly due to the wide range of interests I have. Hope you find a nugget or 2 of interest to you. If not, sorry for taking up your time. Colm

  2. colmbrazel said

    On the plus side i’m gratified that many of the issues highlighted in the blog first appeared here in Ireland on this blog only later slowly and reluctantly it seems appearing in the media. I’ve found local media contrarian to the topics covered here and it appears deeply uncomfortable with them so not surprised the current blog has struck a cord that some would wish to silence and left unsaid. There is however quite an informed debate internationally on such matters and tapping into that debate I invite others to do as well. This blog tries to highlight the issues that impact negatively on future generations of Irish people that others would wish to suppress.

  3. colmbrazel said

    On the plus side i’m gratified that many of the issues highlighted in the blog first appeared here in Ireland on this blog only later slowly and reluctantly it seems appearing in the media. I’ve found local media contrarian to the topics covered here and it appears deeply uncomfortable with them so not surprised the current blog has struck a cord that some would wish to silence and left unsaid.

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