PANIC As Margin Calls Begin: Deutsche Bank Has Financial System On The Cusp Of Collapse
SilverDoctors.com
September 29, 2016
THIS is how the run begins…
From PM Fund Manager Dave Kranzler:
DB stock is now in a full panic sell-off as I write this. It just hit another new all-time NYSE low on by the heaviest volume ever in the stock since its 2001 NYSE listing. It’s currently down almost 10%. No doubt the Central Banks will try to bounce it.
2016 Silver Eagles SaleDeutsche Bank may well be the scapegoat this time around just like Lehman was the scapegoat in 2008. Central Banks in collusion can prevent just one bank from collapsing. It was the co-collapsing of AIG and Goldman Sachs that prompted then-Secretary of Treasury, ex-Goldman CEO Henry Paulson, to put in motion the bailout of the U.S. and European banking system.
Yesterday it was reported that the rate the Fed charges the banks to borrow collateral surged to its highest rate in 7 years – LINK. The rush to borrow collateral was no doubt prompted by OTC derivatives-related counter-party collateral calls. A collateral call is like a margin call in a stock account.
This occurs when a derivatives trade goes south for an entity that is on the long side of the derivatives bet – a bet that Deutsche Bank won’t default, for instance – and the counter-party to that trade demands more collateral to be posted in order to insure that the bet can be paid off if the “long side” loses.
Now multiply that concept across thousands of derivatives trades involving hundreds of hedge fund and bank counter-parties totaling $100’s of trillions. It does not take too many collateral calls before counter-parties and Central Banks run out of collateral that can posted against these OTC derivatives margin calls. That’s happening now.
This is 2008 redux – only this time the damage inflicted by derivatives counter-parties collapsing will be much worse because the size and scale of the problem is much larger.
The Rest…HERE
