Categories



TheLibertyMill




The Phaserl








AvatarProducts

Deutsche Bank Profit Plunges 98 Percent As The Outlook For ‘The World’s Riskiest Bank’ Darkens

by Michael Snyder, The Economic Collapse Blog:

The biggest and most important bank in the biggest and most important country in Europe continues to implode right in front of our eyes. If you follow my work regularly, you probably already know that I issued a major alarm about Deutsche Bank last September. Subsequently, Deutsche Bank stock hit an all-time low. Then I sounded the alarm about Deutsche Bank again back in May, and once again that was followed by another all-time low for Deutsche Bank. And then I warned about Deutsche Bank again in early June, and you can probably imagine what happened after that. Over the past year, this German banking giant has literally been coming apart at the seams, and in so many ways it is paralleling exactly what happened to Lehman Brothers back in 2008.

Today, we got some more bad news from Deutsche Bank. Compared to the exact same period last year, profits were down 98 percent. A nearly 100 percent drop in net income spooked a lot of investors, and Deutsche Bank shares got hit hard on Wednesday. Of course Deutsche Bank shares are already down by more than half over the past 12 months, and the financial sharks can smell blood in the water.

Just like Lehman Brothers in 2008, Deutsche Bank is essentially in panic mode at this point. They recently announced that they will be closing 188 branches and that 3,000 workers will be losing their jobs. But this could just be the beginning of the layoffs at the bank. According to some reports, the bank could cut up to 35,000 jobs by the year 2020, and CEO John Cryan recently admitted that they “may have to accelerate cost-cutting measures“.

What makes all of this even more alarming is that Deutsche Bank is widely considered to be “the most dangerous bank” on the entire planet. The following comes from a CNN article posted just today entitled “The world’s riskiest bank is in trouble“…

What is going on with Deutsche Bank?

Germany’s biggest lender was dubbed the world’s riskiest bank by the International Monetary Fund last month, just as one of its U.S. businesses failed a Federal Reserve stress test.

Its shares are down 45% this year, and on Wednesday it said second quarter profits were wiped out by a 98% slump in earnings. The stock fell 2.5% in Frankfurt.

The primary reason why Deutsche Bank is “the world’s riskiest bank” is because of the mammoth derivatives portfolio that is possesses. It currently has 42 trillion euros of exposure to derivatives, which is an amount of money about 13 times the size of the entire German economy.

When Deutsche Bank finally goes down for good, it is going to be “the shot heard around the financial world”, and it will be a disaster many times greater than the collapse of Lehman Brothers in 2008. Just consider what Jeff Gundlach had to say about the bank earlier this year

“Banks are dying and policymakers don’t know what to do,” Gundlach said. “Watch Deutsche Bank shares go to single digits and people will start to panic… you’ll see someone say, ‘Someone is going to have to do something.’”

As I write this, shares of Deutsche Bank are sitting at just $13.63, and many experts are having a very difficult time finding any reason for optimism. In fact, Edward Misrahi has stated that the bank is his number one short trade, and Jim Collins says that “it is just impossible” to recommend buying shares of Deutsche Bank even at this depressed level…

As an equity analyst, it is just impossible to recommend shares of a bank that is not growing revenue. So really, Deutsche is an untouchable, and the stock market is trying — to the tune of a 58% decline in DB’s market value in 12 months — to recalibrate Deutsche’s market capitalization to the true value of its assets net of liabilities. That’s a painful journey.

I don’t mean to just pick on Deutsche Bank. Certainly there are a lot of other major banks around the globe that are also teetering on the brink right now. Just take a look at Italy. Basically their entire banking system is in the process of melting down.

But the utter collapse of Italy’s banking system won’t have the same kind of worldwide impact that the collapse of Deutsche Bank will.

Read More @ TheEconomicCollapseBlog.com

Help us spread the ANTIDOTE to corporate propaganda.

Please follow SGT Report on Twitter & help share the message.

1 comment to Deutsche Bank Profit Plunges 98 Percent As The Outlook For ‘The World’s Riskiest Bank’ Darkens

  • rich

    “Short Everything That Guy Has Touched” – San Fran’s Lending Standards Put The Last Housing Bubble To Shame

    As noted in a Bloomberg article today, the $0 down, 30-year, adjustable-rate, jumbo mortgage backed by illiquid stock options in tech start-ups, a loan which the San Francisco Federal Credit Union has coined POPPY, or Proud Ownership Purchase Program for You (because “Steaming Pile of Shit” just didn’t seem appropriate and messaging really is everything when you’re trying to dump loans overseas), has made a huge comeback in Silicon Valley.

    As the San Francisco Federal Credit Union pointed out, it’s often not home values that keep people in rentals but rather the inability of potential buyers to come up with a down payment which would be equal to $187,000 on the median home in San Francisco. So they decided to solve that silly little problem with POPPY. To our “surprise”, POPPY has been a huge success and the credit union is sitting on a backlog of $100 million of pre-approved, 30-year, adjustable-rate mortgages just waiting to be funded.

    Not wanting to be outdone by their tech brethren, local banks have become very “innovative” in their race to “disrupt” the old-school approach to mortgage lending that requires things like down payments and rigorous credit checks. Per Bloomberg:

    At Social Finance, the strategy is about getting in on the ground floor, which it aims to do through its marketing partnerships with 22 companies and a promise of an answer on a loan application within a day to help speed up the home-buying process. SoFi also woos clients with loan officers who fight to help them win bidding wars against cash buyers.

    First Republic Bank — which gave Facebook Inc. billionaire Mark Zuckerberg a 1.05% interest-rate mortgage — has opened branches in Facebook and Twitter Inc. headquarters.

    As Glenn Kelman, CEO of the brokerage Redfin, concluded “It’s a smart bet to cater to a sector that’s created thousands of millionaires and dozens of billionaires.”

    Our thoughts are best summarized by Steve Carroll at the very end of the clip below:
    http://www.zerohedge.com/news/2016-07-27/short-everything-guy-has-touched-san-fran-lending-standards-put-last-housing-cycle-s?

    The options are gifts, the underlying entity is pumped and remember markets never go down…bet the house on it ..thank you FED:)

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>