Economics ... Banking
Deutsche Bank

October 2016 ... The Fall of Deutsche Bank. Prepare Yourself Accordingly.

Burgess COMMENTARY

Peter Burgess

The Fall of Deutsche Bank. Prepare Yourself Accordingly.

https://youtu.be/iG2kbg6wd_Q

Stefan Molyneux Subscribe480,960 Add to Share More 49,311 views 2,766 49 Transcript English (Automatic Captions) everybody's defending freedom in radio i 2hope you doing well we're going to take 3a hop skip and a jump across the pond today to survey the potential financial crater that is opening up over one of europe's most wanted and fundamental and foundational financial entities the deutsche bank because it's going through other an exciting time at the moment which I think there's some examination so after a slow-motion disaster spanning almost 10 years the fate of one of your of one of Europe's most important financial institutions may appear to be sealed to make start of the year this year by announcing a record-setting loss in 2015 of 6.8 billion euros a combination of pending litigation scandals bad decisions and some unfortunate events and now the frankfurt-based deutsche bank shares are down forty-eight percent on the year to twelve dollars and sixty cents which is a record-setting low it has only fifteen point eight billion in market capitalization so shares of the hundred forty seven-year-old company are now trading for only eight percent of its peak price in may 2007 because you know seven percent but that would be really bad the bank is currently cutting and 9,000 employees and shattering operations in 10 countries the International Monetary Fund has stated recently that Deutsche Bank is now the most dangerous bank in the world the Fed failed deutsche bank in its annual stress test for the second straight year in June reporting that its capital planning had quote broad and substantial weaknesses and let's just take a moment to enjoy the spectacle of the Federal Reserve complaining that another bank or another financial institution has brought in substantial weaknesses we'll get back to their another day so just so you get a sense of the kind of octopus at the center of deutsche bank so the interconnectedness between deutsche bank and global systemically important banks this is from the IMF is quite quite complicated as you can see it's a bit of a cat's cradle from help and it should . your bank go the way of the dodo it seems like there might be a giant sucking sound pulling in a few other institutions as well so I just wanted to give you a sense of the central ality of deutsche bank to the financial system now of course when the financial system now of course when 22banks come across hard times the day and 26they reach for the government pocketbook 27IE your pocketbook and the question of a 30bailout is a quite important 32Larry McDonald head of global strategy 34at ACG analytics said on CNBC's power 37lunch after being there i'm literally 40sitting here with chills coming down my 42spine because we're in a very similar 43dynamic Deutsche Bank is not leavin in terms of the overall global risk but the 48political situation is almost identical 50the politicians in Germany and in 52mounting position right now to do 55anything ahead of the election he added 56the beast in the market the serpent in 58the market knows this and the market 00will push and push and push until they 03break the politicians in Germany to come 05up with public funds to bail out the 08bank i would assume so let's compare 12Deutsche Bank to Lehman of course Lehman 14was one of the great triggers of the 2007-2008 financial crash this is the price of course of the stock Lehman and Deutsche Bank there's a little arrow here where the head of Lehman said how don't worry the worst is behind us where we're doing fine and yeah these aren't entirely opposite lines of course the outcome remains open to question so Deutsche Bank is at the center of the European financial system and what's happened is there's been a bunch of litigation hits that have raised over all levels of market anxiety the US Department of Justice has tabled a 14 billion dollar or 10.5 billion pounds settlement deal following a probe into the German lenders sale of mortgage-backed securities during the financial crisis so very very brief we've got some videos about this on this channel notably house md which i guess is becoming increasingly dated title but basically what happened was government's force banks to lend to minorities and other unqualified borrowers in order to push at the numbers of home ownership for minorities they were not qualified they could move right in whatever you wanted in some cases in your own income and the banks were forced to do this they didn't just go crazy the cabin can't force them to lend to people who were unqualified to pay back over time and then they wanted to bundle all of these highly risky loans into more complex financial instruments which they sold around the world and of course when math eventually hit as it always does then it all began to to unravel and so the Department of Justice has spent the last I don't know year after year after year investigating this and now they're saying 14 billion dollar us find now that was a report late last week that energy and Deutsche Bank and the US Department of Justice were close to agreeing on a settlement of 5.4 billion that bumped up the stock a little bit that report has not been confirmed in a statement Deutsche Bank argues that it is financially stable quote are trading clients are among the world's most sophisticated investors we are confident that the vast majority of them have a full understanding of a stable financial position the current macroeconomic environment the litigation process in the US and the progress we are making with our strategy so that's that's what that's what they say in some sectors or some environments there are practice questions being asked is there a risk of a financial crisis repeat in in Europe can large can enlarge European bank or large European banks face a liquidity event and that is a problem there's a lot of financial resistance in Europe two bailouts we'll get to that more in a little bit but it's a lot of them have suffered from harsh penalties as a result of bailouts a lot of the European Union partners and of course the fact that the amount of the fine has yet to be finally set has remains a question for people now five banks have already reached settlements with the Justice Department over similar issues and problems latest was Morgan Stanley that was 2.6 billion in February Goldman Sachs Group 5.1 billion in April early September the German magazine said the Deutsche Bank might pay more than 2.4 billion they were using Goldman settlement as a sort of standard but that has not occurred of course if there's a significantly high Department of Justice penalty 14 billion seems very high but if that is the case that's kind of alarming for other banks that are facing similar probes and don't bank is so central to the German in the European economy it employs a hundred thousand people get that number is going down so some officials have reported through back channels that it cannot be allowed to fail so Citigroup a teetered let's go back to 2008 and early 2009 Citigroup teetered upholstery every stepped in the two big cash injections to keep financial losses from spreading after Lehman Brothers failed in September 15th 2007 so that of course is possible possible to repeat that in Germany the European corporate state culture is different particularly in banking bailouts are considered just and natha and German officials in recent days of signals and unwillingness to step in but we don't know if that spring which brinkmanship or for real so in August to our 2016 a Deutsche Bank and credit Swiss were removed from Europe blue-chip stocks Europe 50 index because shocked clients in the market value of both stocks so what's going on well the central bank's employ this radical monetary policies to try and juice or stimulate growth in Europe negative interest rates have emerged now that is truly mad interest rates of course basically because we're mortal beings we prefer to have things now rather than later and interest rates of the price of consuming now rather than later and when you have negative interest rates you're saying well I'd really like to get more staff but I'd really really preferred and i'll pay for the privilege of consuming it a couple of years from now then now that is completely mad that's like taking out a mortgage and paying the bank to withhold the house from you for 20 years by which time you load it it just makes no sense but in the mad world of central government bank planning whatever that means is that it's the kind of stuff that emerges so when you get negative interest rates the Eurozone banks have a tough time making money because negative interest rates erode profits between the short-term borrowing costs and what banks can charge for long-term loans the German 10-year government bond called the blonde was yielding negative zero point one five percent recently and across bond yields fall as prices rise now in 2009 Deutsche Bank CEO us if Ackerman said the domain had plenty of capital and that it was whether in the financial crisis better than its competitors I'm although there is a significant implications that the bank was hiding 12 billion dollars in losses to avoid a government bailout because of course when you run up to the government and ask for money well let's just say your depositors get a little nervous your stockholders and stakeholders get a little bit nervous and you do risk a a bit of a bank run which is what takes down these banks and can do it very very quickly now a lot of the money that Deutsche Bank did make in the sort of early to mid-2000s stemmed from a manipulation of libor rates and I talked about this on Peter ship's radio show a while back ago we can link to that show below so these winds these big profits for Deutsche Bank kind of short-lived the eventual fine imposed at the end of the LIBOR probe was a record-setting 2.5 billion dollars so they made a little money i guess it's like being at a casino you making money and then you don't now Bloomberg has recently alleged that Deutsche Bank had knowingly miss value dozens of transactions between 2008 and 2010 including one transaction currently central to a criminal case against it leaves a bank or monte dei paschi dcn the sienna and that is that is a big problem so almost four years after his first revealed the Deutsche Bank had engaged in some fairly shady deals at the height of the financial crisis that was designed to mask this banks financial woes on October the first Italy finally challenged the German lender and six of its current and former managers for for the alleged crime of colluding to falsify the accounts of Italy's third largest bank and this third largest bank it is in fact the oldest bank in the world this Italian bank and its value has dropped ninety-nine percent so kind of kind of on the ropes as a whole italy as a whole we can't have a whole other discussion about the horror show that is Italian banking these days but the IMF recently noted Italy as does not look like it's going to recover until the mid-2020s by which time it would have enjoyed two decades of recession so they're they're going for the Japanese I guess style model of stimulation through exhaustion could this be blowback there is some theorizing along those lines so many weeks after the European Union slapped Apple with a 14 billion dollar tax bill for back taxes the US hit Deutsche Bank of course with a 14 billion dollar fine of their own right regarding this probe into the companies trading mortgage-backed securities during the financial crisis it seems like a similar number to me and it could be a warning shot from the US to the EU according to The Wall Street Journal the proposed settlement is 14 billion dollars for Deutsche Bank would be the largest fine paid by any of the bank's related to similar charges as we mentioned bad news for other European banks that remain under investigation by the Department of Justice includes Barclays grade so its ups and RBS could be a precedent for what other euro banks might be expected to pay and since it is a kind of depth charge against Deutsche Bank is 14 billion dollar fine well if you're holding the stocks of other banks in Europe were also being invested by the DOJ and the finest many times more than what people expected and still has not been negotiated down with any clarity might you think about hanging onto or not hanging onto your stock in those European banks so the bank of course I don't bank has about 16 billion dollars in equities like less and about a hundred and sixty billion dollars in debt so so that's a lot but if that's a lot oh there's more Deutsche Bank's outstanding derivatives exposure is 20 times the German GDP and five times the entire Eurozone GDP so derivative is a security with the price depends upon hours drive from one or more underlying assets one of the most common is is so futures trading and so on so there's not a lot of equity in my opinion that's quite a lot of death there's a lot of litigation exposure and there's a huge derivative exposure you know 20 times the European sorry 20 times the German GDP five times the Eurozone GDP I no expert but that seems seems like a lot to be now if Deutsche Bank does have to go hat-in-hand for central bank's liquidity assistance the outcome may be truly catastrophic because Deutsche Bank unlikely minh has nearly 600 billion euros and deposits which are susceptible to a retail deposits run soul even failed lastly because its corporate counterparties rapidly yanked their liquidity lines but at least Lehman didn't have retail depositors deutsche bank is fire rescue if the institutional panic spreads to the depositor base in other words of people think that they might not be getting every penny on the dollar of their parts back well that amounts to some 566 billion euros in total and 307 billion euros in retail deposits if Angela Merkel does not hold the planting stock price dr. banks retail clients will take the stock price as a sign of cratering viability right so what had two vicious circle we've all seen this before the lower the stock price drops the faster they pulled their deposits which drives a strike price even further down the quicker that Deutsche Bank's liquidity could hit zero and that self-fulfilling prophecy I think the bank's going to fail so i'm going to put my money which causes the bank to fail well then that's what could be the end Association there was a significant stigma during the financial crisis in the US when they started using the feds when US bank started using the feds discount window their shareholders noticed it so are four options that are possible maybe there's more I'm certainly no expert but there are four options so don't you could try and raise capital right to to find whatever is going to pay with this litigation ongoing litigation issues but that might drop the stock price because of dilution or fears that the capital raised may not be enough because you know you don't want to raise a huge amount of capital because that signaling that you have a huge amount of liabilities you want to raise just enough but not too much and that's always a bit of a gray zone and people are concerned that you didn't raise enough if you have to go back for more there's less credibility with that now they could beg the European Central Bank for a liquidity bridge you know just tide us over but that might signal counterparties to flee an institution that requires a central bank backstopping they could beg for a state bailout but there's no interest from Merkel so far i don't know maybe if all of Lehman goes across the Mediterranean and comes back on rafts she might open up her checkbook or they could implement what is called a bail-in which is where they eliminate billions and unsecured claims and deposits and their depositors are going to lose some money that's the bail-in when the bank just skims off of your deposits but that's going to lead people to want to withdraw their savings and that leads to a collapse of this fractional reserve banking mode right where there's only ten cents in physical deliverable cash for every dollar in depositor claims right they lend out far more or they invest far more than they actually have and that scheme is quickly unraveled if people want to get their actual money out of the bank and dance I mean dead is the foundation of this crumbling system is sovereign debt national debt corporate debt credit card debt school loan debt all record highs all across the world increasing every single day one option that is not on the table is doing nothing they have to do something because the markets are most likely going to keep dropping the price of Deutsche Bank stock lower and lower until either fails or as bailed out i'll find some other way to close this this gap i guess you gotta wonder how the UK currently feels about Brexit given the financial contagion that may be erupting in Europe for the next little while things are actually worse off now than they were in 2008 the whole global economic and financial system is is in worse and shaky of shape and basically because they have no there's been no serious efforts to fix any of these systemic problems that triggered the last great recession and so you know the infamous can has been kicked down the road now for eight more years and things tend to get worse there's a basic function that governments like to do and it's always disastrous in the long run so they'll take your tax money they'll use it as collateral to borrow a huge amount of money which then pull back into society and what that does is give people in society the idea that the government has money and it's adding value to society as a whole it's basic vote-buying and it doesn't work i mean government's all around the world have been taking money for it for decades from people so that there can be retirement benefits back the government's have generally spend all of that money and there's no money for retirement benefits and therefore you've got this inverted pyramid of baby boomers retiring and the government have to tax the young in order to pay for their retirement benefits of the old because there's nothing left in any retirement schemes other than dusty IOU notes and the young of course are going into school more they are get taking on more debt to complete often fairly useless educational degrees are actually worse than useless education degrees a lot of people come out dumber than they were before they went in so they're already in debt job opportunities are very few a lot of people are opting out of the workforce out of marriage out of all of the things like having kids that can generally tend to drive people's economic ambitions and so you have a declining tax base you have an expanding tax requirement base in the elderly in terms of healthcare and not working and consuming resources in terms of pensions so this equation can't continue it just can't continue government of course have been printing a lot of money they need excess population to soak up all of this additional money they're not getting it because of low birth rates that are importing a lot of migrants in order to soak up some of this money it's after the migrants are earning it I think in Germany of the million migrants who came in only 53 got jobs but they can at least funnel the money through the welfare state to the migrants which what's up some of this excess liquidity that is being created by the central bank's so what happens is these these Ponzi schemes these ever-escalating disasters of a debt and financial control manipulation and decaying productivity and outsourcing and productive jobs and increase useless education all of the general burning of human and social and economic capital that occurs towards the end of a particular civilization cycle all of this escalates to the point where things can't possibly continue and the bend the government's and the central bank's never say walks our fault we really made a lot of bad decisions so things need to change we need to relinquish power returned to power to the people return the power to create and control currency to the people which is an animal to socialist governments or or socialist heading government's governments want to do a whole bunch they need a whole bunch of money they can't raise the taxes to do it because then people understand the government generally subtract economic value rather than add to it so they need to borrow they need to print they need to create bonds and all of the atoms kick the can down the road so when all of this begins to unravel what normally happens his government's go to war I mean that the end result of this is war and we saw this after the central banking particular federal reserve was created 1913 there was a a boom and then about 4 30 years in the Great Depression which was the result of central bank failures and manipulation and control controls and just generally anybody who thinks that they can control the complex economy of tens of millions of people tens of millions of people are more is a delusional megalomaniacal narcissist who is going to make terrible decisions in the long run because anyone who thinks they can do that is completely insane from a reality standpoint and so what happens is you get these kinds of disasters that escalate financially and the government cures at all by going to war that is really not going to be possible now that we have nuclear weapons throughout most of the Western countries so war is not really going to happen but you can create significant conflict by other methods such as mass emigration from question leakin questionably compatible cultures which creates enough chaos and destruction in people's lives that you can ask them to make sacrifices when the financial nonsense and delusions finally manifest themselves in massive losses and dislocations so I just really wanted to point this out there is this risk you need to keep your eye on it i would suggest and when things do start to unravel remember it is not the free market that caused all of these problems it is government controls government manipulations and most importantly we need to return the creation and control of currency back to the free market back to the people when you give the government the power to type whatever it once into its own bank account you get a short-term high and then a crash almost beyond description this is dependent on your freedom radio thank you so much for watching and listening please help us sir to continue to bring this kind of information to the world at freedomain radio com / tonight thank you so much have a good day banks come across hard times the day and they reach for the government pocketbook IE your pocketbook and the question of a bailout is a quite important Larry McDonald head of global strategy at ACG analytics said on CNBC's power lunch after being there i'm literally sitting here with chills coming down my spine because we're in a very similar dynamic Deutsche Bank is not leavin in terms of the overall global risk but the political situation is almost identical the politicians in Germany and in mounting position right now to do anything ahead of the election he added the beast in the market the serpent in the market knows this and the market will push and push and push until they break the politicians in Germany to come up with public funds to bail out the bank i would assume so let's compare Deutsche Bank to Lehman of course Lehman was one of the great triggers of the 2007-2008 financial crash this is the price of course of the stock Lehman and Deutsche Bank there's a little arrow here where the head of Lehman said how don't worry the worst is behind us where we're doing fine and yeah these aren't entirely opposite lines of course the outcome remains open to question so Deutsche Bank is at the center of the European financial system and what's happened is there's been a bunch of litigation hits that have raised over all levels of market anxiety the US Department of Justice has tabled a 14 billion dollar or 10.5 billion pounds settlement deal following a probe into the German lenders sale of mortgage-backed securities during the financial crisis so very very brief we've got some videos about this on this channel notably house md which i guess is becoming increasingly dated title but basically what happened was government's force banks to lend to minorities and other unqualified borrowers in order to push at the numbers of home ownership for minorities they were not qualified they could move right in whatever you wanted in some cases in your own income and the banks were forced to do this they didn't just go crazy the cabin can't force them to lend to people who were unqualified to pay back over time and then they wanted to bundle all of these highly risky loans into more complex financial instruments which they sold around the world and of course when math eventually hit as it always does then it all began to to unravel and so the Department of Justice has spent the last I don't know year after year after year investigating this and now they're saying 14 billion dollar us find now that was a report late last week that energy and Deutsche Bank and the US Department of Justice were close to agreeing on a settlement of 5.4 billion that bumped up the stock a little bit that report has not been confirmed in a statement Deutsche Bank argues that it is financially stable quote are trading clients are among the world's most sophisticated investors we are confident that the vast majority of them have a full understanding of a stable financial position the current macroeconomic environment the litigation process in the US and the progress we are making with our strategy so that's that's what that's what they say in some sectors or some environments there are practice questions being asked is there a risk of a financial crisis repeat in in Europe can large can enlarge European bank or large European banks face a liquidity event and that is a problem there's a lot of financial resistance in Europe two bailouts we'll get to that more in a little bit but it's a lot of them have suffered from harsh penalties as a result of bailouts a lot of the European Union partners and of course the fact that the amount of the fine has yet to be finally set has remains a question for people now five banks have already reached settlements with the Justice Department over similar issues and problems latest was Morgan Stanley that was 2.6 billion in February Goldman Sachs Group 5.1 billion in April early September the German magazine said the Deutsche Bank might pay more than 2.4 billion they were using Goldman settlement as a sort of standard but that has not occurred of course if there's a significantly high Department of Justice penalty 14 billion seems very high but if that is the case that's kind of alarming for other banks that are facing similar probes and don't bank is so central to the German in the European economy it employs a hundred thousand people get that number is going down so some officials have reported through back channels that it cannot be allowed to fail so Citigroup a teetered let's go back to 2008 and early 2009 Citigroup teetered upholstery every stepped in the two big cash injections to keep financial losses from spreading after Lehman Brothers failed in September 15th 2007 so that of course is possible possible to repeat that in Germany the European corporate state culture is different particularly in banking bailouts are considered just and natha and German officials in recent days of signals and unwillingness to step in but we don't know if that spring which brinkmanship or for real so in August to our 2016 a Deutsche Bank and credit Swiss were removed from Europe blue-chip stocks Europe 50 index because shocked clients in the market value of both stocks so what's going on well the central bank's employ this radical monetary policies to try and juice or stimulate growth in Europe negative interest rates have emerged now that is truly mad interest rates of course basically because we're mortal beings we prefer to have things now rather than later and interest rates of the price of consuming now rather than later and when you have negative interest rates you're saying well I'd really like to get more staff but I'd really really preferred and i'll pay for the privilege of consuming it a couple of years from now then now that is completely mad that's like taking out a mortgage and paying the bank to withhold the house from you for 20 years by which time you load it it just makes no sense but in the mad world of central government bank planning whatever that means is that it's the kind of stuff that emerges so when you get negative interest rates the Eurozone banks have a tough time making money because negative interest rates erode profits between the short-term borrowing costs and what banks can charge for long-term loans the German 10-year government bond called the blonde was yielding negative zero point one five percent recently and across bond yields fall as prices rise now in 2009 Deutsche Bank CEO us if Ackerman said the domain had plenty of capital and that it was whether in the financial crisis better than its competitors I'm although there is a significant implications that the bank was hiding 12 billion dollars in losses to avoid a government bailout because of course when you run up to the government and ask for money well let's just say your depositors get a little nervous your stockholders and stakeholders get a little bit nervous and you do risk a a bit of a bank run which is what takes down these banks and can do it very very quickly now a lot of the money that Deutsche Bank did make in the sort of early to mid-2000s stemmed from a manipulation of libor rates and I talked about this on Peter ship's radio show a while back ago we can link to that show below so these winds these big profits for Deutsche Bank kind of short-lived the eventual fine imposed at the end of the LIBOR probe was a record-setting 2.5 billion dollars so they made a little money i guess it's like being at a casino you making money and then you don't now Bloomberg has recently alleged that Deutsche Bank had knowingly miss value dozens of transactions between 2008 and 2010 including one transaction currently central to a criminal case against it leaves a bank or monte dei paschi dcn the sienna and that is that is a big problem so almost four years after his first revealed the Deutsche Bank had engaged in some fairly shady deals at the height of the financial crisis that was designed to mask this banks financial woes on October the first Italy finally challenged the German lender and six of its current and former managers for for the alleged crime of colluding to falsify the accounts of Italy's third largest bank and this third largest bank it is in fact the oldest bank in the world this Italian bank and its value has dropped ninety-nine percent so kind of kind of on the ropes as a whole italy as a whole we can't have a whole other discussion about the horror show that is Italian banking these days but the IMF recently noted Italy as does not look like it's going to recover until the mid-2020s by which time it would have enjoyed two decades of recession so they're they're going for the Japanese I guess style model of stimulation through exhaustion could this be blowback there is some theorizing along those lines so many weeks after the European Union slapped apple with a 14 billion dollar tax bill for back taxes the US hit Deutsche Bank of course with a 14 billion dollar fine of their own right regarding this probe into the companies trading mortgage-backed securities during the financial crisis it seems like a similar number to me and it could be a warning shot from the US to the EU according to The Wall Street Journal the proposed settlement is 14 billion dollars for Deutsche Bank would be the largest fine paid by any of the bank's related to similar charges as we mentioned bad news for other European banks that remain under investigation by the Department of Justice includes Barclays grade so its ups and RBS could be a precedent for what other euro banks might be expected to pay and since it is a kind of depth charge against Deutsche Bank is 14 billion dollar fine well if you're holding the stocks of other banks in Europe were also being invested by the DOJ and the finest many times more than what people expected and still has not been negotiated down with any clarity might you think about hanging onto or not hanging onto your stock in those European banks so the bank of course I don't bank has about 16 billion dollars in equities like less and about a hundred and sixty billion dollars in debt so so that's a lot but if that's a lot oh there's more Deutsche Bank's outstanding derivatives exposure is 20 times the German GDP and five times the entire Eurozone GDP so derivative is a security with the price depends upon hours drive from one or more underlying assets one of the most common is is so futures trading and so on so there's not a lot of equity in my opinion that's quite a lot of death there's a lot of litigation exposure and there's a huge derivative exposure you know 20 times the European sorry 20 times the German GDP five times the Eurozone GDP I no expert but that seems seems like a lot to be now if Deutsche Bank does have to go hat-in-hand for central bank's liquidity assistance the outcome may be truly catastrophic because Deutsche Bank unlikely minh has nearly 600 billion euros and deposits which are susceptible to a retail deposits run soul even failed lastly because its corporate counterparties rapidly yanked their liquidity lines but at least Lehman didn't have retail depositors deutsche bank is fire rescue if the institutional panic spreads to the depositor base in other words of people think that they might not be getting every penny on the dollar of their parts back well that amounts to some 566 billion euros in total and 307 billion euros in retail deposits if Angela Merkel does not hold the planting stock price dr. banks retail clients will take the stock price as a sign of cratering viability right so what had two vicious circle we've all seen this before the lower the stock price drops the faster they pulled their deposits which drives a strike price even further down the quicker that Deutsche Bank's liquidity could hit zero and that self-fulfilling prophecy I think the bank's going to fail so i'm going to put my money which causes the bank to fail well then that's what could be the end Association there was a significant stigma during the financial crisis in the US when they started using the feds when US bank started using the feds discount window their shareholders noticed it so are four options that are possible maybe there's more I'm certainly no expert but there are four options so don't you could try and raise capital right to to find whatever is going to pay with this litigation ongoing litigation issues but that might drop the stock price because of dilution or fears that the capital raised may not be enough because you know you don't want to raise a huge amount of capital because that signaling that you have a huge amount of liabilities you want to raise just enough but not too much and that's always a bit of a gray zone and people are concerned that you didn't raise enough if you have to go back for more there's less credibility with that now they could beg the European Central Bank for a liquidity bridge you know just tide us over but that might signal counterparties to flee an institution that requires a central bank backstopping they could beg for a state bailout but there's no interest from Merkel so far i don't know maybe if all of Lehman goes across the Mediterranean and comes back on rafts she might open up her checkbook or they could implement what is called a bail-in which is where they eliminate billions and unsecured claims and deposits and their depositors are going to lose some money that's the bail-in when the bank just skims off of your deposits but that's going to lead people to want to withdraw their savings and that leads to a collapse of this fractional reserve banking mode right where there's only ten cents in physical deliverable cash for every dollar in depositor claims right they lend out far more or they invest far more than they actually have and that scheme is quickly unraveled if people want to get their actual money out of the bank and dance I mean dead is the foundation of this crumbling system is sovereign debt national debt corporate debt credit card debt school loan debt all record highs all across the world increasing every single day one option that is not on the table is doing nothing they have to do something because the markets are most likely going to keep dropping the price of Deutsche Bank stock lower and lower until either fails or as bailed out i'll find some other way to close this this gap i guess you gotta wonder how the UK currently feels about Brexit given the financial contagion that may be erupting in Europe for the next little while things are actually worse off now than they were in 2008 the whole global economic and financial system is is in worse and shaky of shape and basically because they have no there's been no serious efforts to fix any of these systemic problems that triggered the last great recession and so you know the infamous can has been kicked down the road now for eight more years and things tend to get worse there's a basic function that governments like to do and it's always disastrous in the long run so they'll take your tax money they'll use it as collateral to borrow a huge amount of money which then pull back into society and what that does is give people in society the idea that the government has money and it's adding value to society as a whole it's basic vote-buying and it doesn't work i mean government's all around the world have been taking money for it for decades from people so that there can be retirement benefits back the government's have generally spend all of that money and there's no money for retirement benefits and therefore you've got this inverted pyramid of baby boomers retiring and the government have to tax the young in order to pay for their retirement benefits of the old because there's nothing left in any retirement schemes other than dusty IOU notes and the young of course are going into school more they are get taking on more debt to complete often fairly useless educational degrees are actually worse than useless education degrees a lot of people come out dumber than they were before they went in so they're already in debt job opportunities are very few a lot of people are opting out of the workforce out of marriage out of all of the things like having kids that can generally tend to drive people's economic ambitions and so you have a declining tax base you have an expanding tax requirement base in the elderly in terms of healthcare and not working and consuming resources in terms of pensions so this equation can't continue it just can't continue government of course have been printing a lot of money they need excess population to soak up all of this additional money they're not getting it because of low birth rates that are importing a lot of migrants in order to soak up some of this money it's after the migrants are earning it I think in Germany of the million migrants who came in only 53 got jobs but they can at least funnel the money through the welfare state to the migrants which what's up some of this excess liquidity that is being created by the central bank's so what happens is these these Ponzi schemes these ever-escalating disasters of a debt and financial control manipulation and decaying productivity and outsourcing and productive jobs and increase useless education all of the general burning of human and social and economic capital that occurs towards the end of a particular civilization cycle all of this escalates to the point where things can't possibly continue and the bend the government's and the central bank's never say walks our fault we really made a lot of bad decisions so things need to change we need to relinquish power returned to power to the people return the power to create and control currency to the people which is an animal to socialist governments or or socialist heading government's governments want to do a whole bunch they need a whole bunch of money they can't raise the taxes to do it because then people understand the government generally subtract economic value rather than add to it so they need to borrow they need to print they need to create bonds and all of the atoms kick the can down the road so when all of this begins to unravel what normally happens his government's go to war I mean that the end result of this is war and we saw this after the central banking particular federal reserve was created 1913 there was a a boom and then about 4 30 years in the Great Depression which was the result of central bank failures and manipulation and control controls and just generally anybody who thinks that they can control the complex economy of tens of millions of people tens of millions of people are more is a delusional megalomaniacal narcissist who is going to make terrible decisions in the long run because anyone who thinks they can do that is completely insane from a reality standpoint and so what happens is you get these kinds of disasters that escalate financially and the government cures at all by going to war that is really not going to be possible now that we have nuclear weapons throughout most of the Western countries so war is not really going to happen but you can create significant conflict by other methods such as mass emigration from question leakin questionably compatible cultures which creates enough chaos and destruction in people's lives that you can ask them to make sacrifices when the financial nonsense and delusions finally manifest themselves in massive losses and dislocations so I just really wanted to point this out there is this risk you need to keep your eye on it i would 1suggest and when things do start to unravel remember it is not the free market that caused all of these problems it is government controls government manipulations and most importantly we need to return the creation and control of currency back to the free market back to the people when you give the government the power to type whatever it once into its own bank account you get a short-term high and then a crash almost beyond description this is dependent on your freedom radio thank you so much for watching and listening please help us sir to continue to bring this kind of information to the world at freedomain radio com / tonight thank you so much have a good day Published on Oct 7, 2016 Twitter: http://www.twitter.com/StefanMolyneux MP3: http://www.fdrpodcasts.com/#/3441/the... Soundcloud: https://soundcloud.com/stefan-molyneu... After a slow-motion disaster of almost 10 years, the fate of one of Europe’s most important financial institutions appears to be sealed. Deutsche Bank started the year by announcing a record-setting loss in 2015 of €6.8 billion. Scandals, bad decisions, and unfortunate events – now Frankfurt-based Deutsche Bank shares are down -48% on the year to $12.60, a record-setting low. With only $15.8 billion in market capitalization, shares of the 147-year-old company now trade for only 8% of its peak price in May 2007. The bank is currently cutting 9,000 employees and shuttering operations in 10 countries. The International Monetary Fund has stated that DBK is now the most dangerous bank in the world. House, MD - The Real Cause of the Current Financial Crisis https://www.youtube.com/watch?v=pHIlr... The LIBOR Sandal https://www.youtube.com/watch?v=sBd7N... Sources: http://www.fdrurl.com/deutschebank Freedomain Radio is 100% funded by viewers like you. Please support the show by signing up for a monthly subscription or making a one time donation at: http://www.freedomainradio.com/donate Get more from Stefan Molyneux and Freedomain Radio including books, podcasts and other info at: http://www.freedomainradio.com Amazon Affiliate Links US: http://www.fdrurl.com/Amazon Canada: http://www.fdrurl.com/AmazonCanada UK: http://www.fdrurl.com/AmazonUK SHOW MORE COMMENTS • 890 Peter Burgess Add a public comment...