Deutsche Crashes, CommerzBank Burns and Wells Fargo’s Next…(Get Out Of The Banks!)
TheDailyCoin.org
September 30, 2016
This has been a week for the too big to jail banks. We see Deutsche Bank and Commerz Bank, both out of Germany, begin the early stages of collapse. Wells Fargo is not far behind with the revelation of the massive fraud that has surfaced in the past few weeks.
Deutsche Bank (DB) is leading the way to the fire pit of systemic collapse. As CNBC reported just a few hours ago DB’s problems are continuing to grow. At this point it is merely a question of how long before the ECB, BoE or the Federal Reserve fire up their balance sheet to cool down this raging fire.
Shares of Deutsche Bank fell 7 percent at the start of the European trading session Friday, amid capital concerns following a proposed settlement by the U.S. Department of Justice and a report that some hedge funds were reducing their exposure to the embattled bank.
The German lender’s stock has been on wild ride in recent weeks and dipped below 10 euros a share on Friday morning, a new record low for its European-listed shares. By midday London time the stock had pared some losses to trade around 5 percent lower.
The German DAX was down 1.7 percent and the banking sector as a whole in Europe was down 3 percent.
CommerzBank is showing signs of collapse in similar fashion as Deutsche Bank. With shares of CommerzBank plunging by 6.5% earlier today one has to ask, what’s next for theses banking behemoths? Would it be possible to contain their derivatives books?
DB’s derivatives book is estimated to be in the neighborhood of $47 TRILLION which is down from close to $70 TRILLION. Brother, can you spare a trillion? The fact that one company has $47 trillion of anything on their books shows just how far from reality the entire derivatives market has become.
Where are the regulators? Where are the laws to force these criminal banking operations to avoid this type of exposure? Well, those are good questions and one needs look no further than the profits being generated and who benefits from these massive, gargantuan, out of this world profits being generated by the toxic waste known as derivatives. Warren Buffet didn’t call derivatives financial weapons of mass destruction because these “financial instruments” are safe, sound investment vehicles. No, he described the toxic waste properly.
Who, how will this mess be cleaned up? Who is going to pay for this failure of epic proportions? You, me and the other citizens around the world? If you don’t think the people running the show are concerned and giving this serious consideration then why would CNBC be planting seeds?
The cost of insuring Deutsche Bank’s debt against default jumped by 21 basis points on Friday, according to data from Markit, and trading in Deutsche Bank’s so-called “CoCo” bonds – widely-watched contingent convertible bonds – set a new record low, according to Dow Jones. These bonds are converted into equity once a specified event has occurred (if the bank were to undergo a precautionary recapitalization, for instance).
The Rest…HERE
