Deutsche Bank Collapse: The Most Important Bank In Europe Is Facing A Major ‘Liquidity Event’

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toilet-paper-stock-market-collapse-public-domainThe largest and most important bank in the largest and most important economy in Europe is imploding right in front of our eyes.  Deutsche Bank is the 11th biggest bank on the entire planet, and due to the enormous exposure to derivatives that it has, it has been called “the world’s most dangerous bank“.  Over the past year, I have repeatedly warned that Deutsche Bank is heading for disaster and is a likely candidate to be “the next Lehman Brothers”.  If you would like to review, you can do so here, here and here.  On September 16th, the Wall Street Journal reported that the U.S. Department of Justice wanted 14 billion dollars from Deutsche Bank to settle a case related to the mis-handling of mortgage-backed securities during the last financial crisis.  As a result of that announcement, confidence in the bank has been greatly shaken, the stock price has fallen to record lows, and analysts are warning that Deutsche Bank may be facing a “liquidity event” unlike anything that we have seen since the collapse of Lehman Brothers back in 2008.

At one point on Friday, Deutsche Bank stock fell below the 10 euro mark for the first time ever before bouncing back a bit.  A completely unverified rumor that was spreading on Twitter that claimed that Deutsche Bank would settle with the Department of Justice for only 5.4 billion dollars was the reason for the bounce.

But the size of the fine is not really the issue now.  Shares of Deutsche Bank have fallen by more than half so far in 2016, and this latest episode seems to have been the final straw for the deeply troubled financial institution.  Old sources of liquidity are being cut off, and nobody wants to be the idiot that offers Deutsche Bank a new source of liquidity at this point.

As a result, Deutsche Bank is potentially facing a “liquidity event” on a scale that we have not seen since the financial crisis of 2008.  The following comes from Zero Hedge

It is not solvency, or the lack of capital – a vague, synthetic, and usually quite arbitrary concept, determined by regulators – that kills a bank; it is – as Dick Fuld will tell anyone who bothers to listen – the loss of (access to) liquidity: cold, hard, fungible (something Jon Corzine knew all too well when he commingled and was caught) cash, that pushes a bank into its grave, usually quite rapidly: recall that it took Lehman just a few days for its stock to plunge from the high double digits to zero.

It is also liquidity, or rather concerns about it, that sent Deutsche Bank stock crashing to new all time lows earlier today: after all, the investing world already knew for nearly two weeks that its capitalization is insufficient. As we reported earlier this week, it was a report by Citigroup, among many other, that found how badly undercapitalized the German lender is, noting that DB’s “leverage ratio, at 3.4%, looks even worse relative to the 4.5% company target by 2018″ and calculated that while he only models €2.9bn in litigation charges over 2H16-2017 – far less than the $14 billion settlement figure proposed by the DOJ – and includes a successful disposal of a 70% stake in Postbank at end-2017 for 0.4x book he still only reaches a CET 1 ratio of 11.6% by end-2018, meaning the bank would have a Tier 1 capital €3bn shortfall to the company target of 12.5%, and a leverage ratio of 3.9%, resulting in an €8bn shortfall to the target of 4.5%.

The more the stock price drops, the faster other financial institutions, investors and regular banking clients are going to want to pull their money out of Deutsche Bank.  And every time there is news about people pulling money out of the bank, that is just going to drive the stock price even lower.

In other words, Deutsche Bank may be entering a death spiral that may be impossible to stop without a government bailout, and the German government has already stated that there will be no bailout for Deutsche Bank.

Banking customers have a total of approximately 566 billion euros deposited with the bank, and even if a small fraction of those clients start demanding their money back it is going to cause a major, major crunch.

Deutsche Bank CEO John Cryan attempted to calm nerves on Friday by releasing a memo to employees that blamed “speculators” for the decline in the stock price

Instead of doing what many have correctly suggested he should be doing, namely focusing on ways to raise more capital for the undercapitalized Deutsche Bank in order to stem the slow (at first) liquidity leak, first thing this morning CEO John Cryan issued another morale-boosting note to employees of Deustche Bank who have been watching their stock price crash to another record low, dipping under €10 in early trading for the first time ever. In the memo the embattled CEO worryingly did what Dick Fuld and other chief executives did when they felt the situation slipping out of control, namely blaming evil “rumor-spreading” shorts, saying “our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. … Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.

Just as important, Cryan confirms the Bloomberg report that “a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns.” As we explained last night, the concerns are very much justified if they spread to the biggest risk-factor for the German bank: its depositors, which collectively hold over €550 billion in liquidity-providing instruments.

If you would like to ready the full memo, you can do so right here.

One of the reasons why Deutsche Bank is considered to be so systemically “dangerous” is because it has 42 trillion euros worth of exposure to derivatives.  That is an amount of money that is 14 times larger than the GDP of the entire nation of Germany.

Some firms that were derivatives clients of the bank have already gotten spooked and have moved their business to other institutions.  It was this report from Bloomberg that really helped drive down the stock price of Deutsche Bank earlier this week…

The funds, a small subset of the more than 800 clients in the bank’s hedge fund business, have shifted part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News. Among them are Izzy Englander’s $34 billion Millennium Partners, Chris Rokos’s $4 billion Rokos Capital Management, and the $14 billion Capula Investment Management, said a person with knowledge of the situation who declined to be identified talking about confidential client matters.

“The issue here is now one of confidence,” said Chris Wheeler, a financial analyst with Atlantic Equities LLP in London.

So what comes next?

Monday is a banking holiday for Germany, so we may not see anything major happen until Tuesday.

An announcement of a major reduction in the Department of Justice fine may buy Deutsche Bank some time, but any reprieve would likely only be temporary.

What appears to be more likely is the scenario that Jeffrey Gundlach is suggesting

But Jeffrey Gundlach, chief executive of DoubleLine Capital, said investors betting that Berlin would not rescue Deutsche could find themselves nursing big losses.

The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be,’ said Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine.

It will be very interesting to see how desperate things become before the German government finally gives in to the pressure.

The complete and total collapse of Deutsche Bank would be an event many times more significant for the global financial system than the collapse of Lehman Brothers was.  Global leaders simply cannot afford for such a thing to happen, but without serious intervention it appears that is precisely where we are heading.

Personally, I don’t know exactly what will happen next, but it will be fascinating to watch.

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Federal Premium Offers Vital-Shok Trophy Bonded Tip 223 Rem for Hunters

Federal Premium Offers Vital-Shok Trophy Bonded Tip 223 Rem for Hunters
Federal Premium Offers Vital-Shok Trophy Bonded Tip 223 Rem for Hunters

ANOKA, Minn.-(Ammoland.com)- Federal Premium offers hunters of its Vital-Shok Trophy Bonded Tip offering in 223 Rem, which has proven itself as one of the most effective cartridges available in this caliber. This ammunition is available at dealers world-wide.

The .223 Rem Trophy Bonded Tip bullet retains more than 90 percent of its weight, penetrates deep, and shoots flat and accurately thanks to its high ballistic coefficient. The solid copper shank crushes bone, and exterior skiving on the nickel-plated bullet ensures optimum expansion at any range. The tough, bonded construction makes the new 223 Rem. load a perfect choice for medium-size game like antelope and deer.

Features & Benefits

  • 62-grain, 223 Rem. load perfectly suited to medium-size game
  • Built on the Trophy Bonded Bear Claw platform
  • Neon polymer tip for flat trajectory and accuracy
  • Exterior skiving for optimum expansion
  • Nickel-plated case and bullet for easy extraction and corrosion protection

Part No. / Description / MSRP

  • P223TT3 / Trophy Bonded Tip, 223 Rem., 62 grains / $26.95

Federal Premium is a brand of Vista Outdoor Inc., an outdoor sports and recreation company. For more information on Federal Premium, go to www.federalpremium.com.

About Vista Outdoor Inc.

Vista Outdoor is a leading global designer, manufacturer and marketer of consumer products in the growing outdoor sports and recreation markets. The company operates in two segments, Shooting Sports and Outdoor Products, and has a portfolio of well-recognized brands that provides consumers with a wide range of performance-driven, high-quality and innovative products for individual outdoor recreational pursuits. Vista Outdoor products are sold at leading retailers and distributors across North America and worldwide. Vista Outdoor is headquartered in Utah and has manufacturing operations and facilities in 13 U.S. States, Canada, Mexico and Puerto Rico along with international customer service, sales and sourcing operations in Asia, Australia, Canada, Europe and New Zealand. For news and information visit www.vistaoutdoor.com or follow us on Twitter @VistaOutdoorInc and Facebook at www.facebook.com/vistaoutdoor.

This post Federal Premium Offers Vital-Shok Trophy Bonded Tip 223 Rem for Hunters appeared first on AmmoLand.com Shooting Sports News .

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Springfield Armory Daily Digest: A Thoughtcrime in NJ, Going Hungry in Blacksburg, and Movement in D.C.

Double-plus un-good badthink in America’s armpit: NJ Highschooler Suspended for Anti-Gun Control Project – “A Manville, NJ student was suspended and ordered to go under a psychological evaluation after it was found…

The post Springfield Armory style=”color:#9C3822″> Daily Digest: A Thoughtcrime in NJ, Going Hungry in Blacksburg, and Movement in D.C. appeared first on The Truth About Guns.

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Donald Trump Jr. Talks Second Amendment

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SilencerCo. sat down with Donald Trump, Jr., son of Presidential candidate Donald Trump, to talk about firearms and firearms-related issues.

According to SilncerCo’s CEO Joshua Waldron, meeting with Trump Jr. is a risky move for his company but it’s something they felt compelled to do because of the need to protect the Second Amendment.

“The Second Amendment for us – for me, the Second Amendment isn’t just a passion and a hobby that I do every weekend,” Trump Jr. says. “It’s a lifestyle. It’s the thing that they thought of—that our Founding Fathers thought of—after Free Speech and religion… It’s a basic right of an American.”

Check out the full video:

 

The post Donald Trump Jr. Talks Second Amendment appeared first on Bearing Arms.

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Gun Writer Jorge Amselle Supports Hillary Clinton for President

According to his Amazon.com bio, “Jorge Amselle is an NRA certified firearms instructor, a military veteran, bullseye shooter, and full time professional firearms writer for various national gun magazines, including Combat Handguns, Guns and…

The post Gun Writer Jorge Amselle Supports Hillary Clinton for President appeared first on The Truth About Guns.

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TTAG Publisher to Defend Guns Rights at The New Yorker Festival

I don’t think I’ll ever forgive The New Yorker for firing Gun Guys writer and former TTAG contributor Dan Baum. While the left-leaning scribe makes prickly pears seem baby’s bottom smooth, and he’s…

The post TTAG Publisher to Defend Guns Rights at The New Yorker Festival appeared first on The Truth About Guns.

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The Myth of Chicago’s “Lax” Gun Laws

Reality vs. Myth
Reality vs. Myth
NRA - Institute for Legislative Action
NRA – Institute for Legislative Action

Fairfax, VA -(AmmoLand.com)- The escalating murder rate in Chicago has given rise to a new claim – that Chicago gun laws are lax, weak, and ineffective.

Chicago Police Superintendent Eddie Johnson recently argued that “[i]f we had the gun laws in Chicago that L.A. and New York have, we would see our violent crime cut in half.” New York Police Commissioner Bill Bratton repeated the remark, declaring that Chicago’s problem “has to do with gun laws that just don’t meet the reality of what’s going on the streets.”

Even Dwyane Wade of the Chicago Bulls recently stated that “[t]here’s other cities that have way tougher gun laws. We have weak gun laws and we have to do a better job of being leaders.”

The reality is that Illinois has some of the toughest gun laws in the nation. Indeed, even the Law Center to Prevent Gun Violence ranks Illinois 8th among the ten states with the strongest gun laws and awarded it a B+ rating in 2015.

Under Illinois’ universal background check law, residents must show a state-issued Firearm Owners Identification (FOID) card or concealed carry permit for all purchases of firearms or ammunition, whether from a licensed dealers or private seller. Lost or stolen guns must be reported to the police within 72 hours.

Illinois is also one of only four states that imposes a waiting period on the purchase of all firearms – 72 hours for a handgun and 24 hours for a rifle or shotgun. Automatic firearms, short-barreled shotguns, and suppressors are prohibited entirely. Even muzzleloaders and black powder guns are considered firearms and subject to the background check requirement.

Illinois concealed carry laws are also among the most stringent in the country. Applicants are required to take a 16-hour training course – the longest in the nation. While technically a “shall issue” state, law enforcement agencies still have limited discretion to object to an individual being granted a license. Illinois also refuses to recognize any other state’s concealed carry license.

While local restrictions on handguns are preempted under state law, Illinois state law recognizes any local “assault weapons” ban adopted before July 20, 2013. The result is a patchwork of laws in 23 jurisdictions where a gun otherwise legal to own in some parts of the state is prohibited. Any person traveling through the Chicago area with a firearm must carefully consider their route, especially if their trip takes them through a jurisdiction where Chicago, Cook County, or municipal restrictions have them unintentionally violating one of the local ordinances.

In light of the above, there are many words that can be used to describe Illinois gun laws, but “lax” and “weak” are not among them.

This argument has everything to do with getting the public to focus on an irrelevant, but convenient, “answer” to Chicago’s ever-present and growing violent crime, and nothing to do with actually solving the problem.

About the NRA-ILA:

Established in 1975, the Institute for Legislative Action (ILA) is the “lobbying” arm of the National Rifle Association of America. ILA is responsible for preserving the right of all law-abiding individuals in the legislative, political, and legal arenas, to purchase, possess and use firearms for legitimate purposes as guaranteed by the Second Amendment to the U.S. Constitution.

For more information, please visit: www.nra.org. Be sure to follow the NRA on Facebook at NRA on Facebook and Twitter @NRA.

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This post The Myth of Chicago’s “Lax” Gun Laws appeared first on AmmoLand.com Shooting Sports News .

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Thoughts About Prepping from an Ole Fart

Written by Guest Contributor on The Prepper Journal.

4.1/5 (167)

Editor’s Note: This post is another entry in the Prepper Writing Contest from Paul S.  If you have information for Preppers that you would like to share and possibly win a $300 Amazon Gift Card to purchase your own prepping supplies, enter today!


First: I want to thank, “The Prepper Journal,” for allowing me to enter their writing contest. This gives me a chance to put some thoughts I have been thinking for a long time on paper. This is not going to be a long treatise on how we had to walk to school through the snow up hill both ways.

Next, let me earn the right to have you read my article, by telling you a little about myself.

I am a 75-year-old grandpa of five Wonderful Grandkids. Born, January 17, 1941 as a great-grandson and grandson of pioneers who came west by covered wagon in 1875. I was raised on the family homestead, located on the Palouse Plateau, just north of Moscow, Idaho. The Palouse has some of the richest farmland in the U.S.

My parents and grandparents lived through the Great Depression as people of the soil, meaning we were essentially early grid joiners who used the land for our livelihood. Electricity was established in 1936, phone service, (crank phones.) approximately 1938. No refrigerators or ice boxes or super markets or, or. The closest town, Garfield, Washington, was 6 miles away over twisty, curvy, muddy or dusty dirt roads; with huge mud holes in spring and fall. We were often snowed in for weeks at a time in winter.

Everything we ate had to be grown and preserved off the farm, during the summer. All repairs had to be done on sight, using material at hand, because a trip to town was a half day affair. The closest farm machinery dealer was 9 miles away in Palouse, Washington. I have a degree in Architecture from the University of Idaho; although I spent all of my work life as a test technician in research and development, working for a major truck manufacturer.

When You think of prepping, what is Your mind-set? Do You think of something that might happen maybe in the future? Is the, “Boogeyman,” going to come and steal all of Your stuff?

Prepping is a state of mind

Woman admiring sunset from mountain top

For me Prepping is a state of mind: being prepared for today and tomorrow, and maybe for the future. Look at Your situation right where You are right now and ask Yourself a few questions. You could maybe divide the questions into categories: Man-caused; economic or maybe war – or Natural; earthquake or weather or even cosmic.

If I couldn’t work, how would I live? Do I have enough set aside to get through until I could work? How and what will I eat? Drink? Keep warm? Is my living situation secure? My cousin sells used trailers and motor homes. He sells 3 to 4 units a week to homeless people. My Bride and I just returned from a trip, traveling up the California coast. I didn’t count, but I bet we must have seen 50 to 75 vehicles parked off out-of-the-way, dusty, covered windows; people living in them. Since 2008, millions have lost their work and can’t find a replacement job.

What skills do I have? Can I repair a broken whatever? Can I find out how to repair a broken whatever? How do I find out? Where do I look? I am not suggesting You become a brain surgeon, but I do think spending a little time sitting at the dining room table maybe disassembling a simple hair dryer you purchased or picked up at a garage sale is a great practice. Maybe going on to Google and seeing if You can find information on the process. Learning what tools are needed.

man-on-ladder-fixing-shingles

Ask Yourself any question about any situation.. Am I ready? If not, how can I get ready??

You see, it is a mindset.. It is putting Yourself mentally in a situation and seeing if You measure up. It is deciding to spend some time in research, study and practice, instead of whatever society deems necessary for Your attention; whether it’s sports, entertainment or politics, or, or.. If You tell Yourself, I don’t do that, or I can’t do that;; then You will probably become part of the problem instead of part of the solution.

We live in the age of information, but that information is only useful, if You internalize it to the point to where You can call on it and use it if necessary.

The next big earthquake might hit right in the middle of the 3rd quarter… are You ready?

If you liked this article, please rate it.

The post Thoughts About Prepping from an Ole Fart appeared first on The Prepper Journal.

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What Is Going On In Charlotte Is Far More Important Than Brad Pitt And Angelina Jolie’s Divorce

Brad-Pitt-And-Angelina-Jolie-Photo-by-Georges-Biard-460x342

brad-pitt-and-angelina-jolie-photo-by-georges-biardWhile one of America’s largest cities is being ripped in two, most Americans appear to be far more interested in the drama surrounding Brad Pitt and Angelina Jolie’s divorce.  As Charlotte braces for a third night of rioting and violence, the mainstream media is full of headlines such as “Welp, the Jolie-Pitt Divorce Got Real Depressing Real Fast” and “Even the Dalai Lama has something to say about Brangelina’s divorce“.  Yes, the “Brangelina divorce” is an important cultural moment that illustrates our ongoing moral and social decay, but what is going on in Charlotte is far more important.  Trust in our most important institutions is deeply broken, and Americans are increasingly choosing chaos and violence over peaceful discourse.  For a very long time I have been warning that these kinds of riots were coming, and the thin veneer of civilization that we all take for granted every day is starting to rapidly disappear.

There had been hope that things would settle down after the first couple of nights of chaos in Charlotte, but as I write this article protesters have already massed downtown despite a midnight curfew imposed by Mayor Jennifer Roberts…

Demonstrators chanted “release the tape” while briefly blocking an intersection near Bank of America headquarters in the heart of the city’s business district. They then continued marching as police officers watched. Members of the National Guard carrying rifles were also deployed in front of office buildings to head off another night of violence in this city on edge.

Mayor Jennifer Roberts has signed a curfew order from midnight until 6 a.m., despite Charlotte-Mecklenburg Police Chief Kerr Putney saying he saw no need for a curfew.

Personally, I can definitely understand why a curfew was imposed.  Nobody should want to see a repeat of the senseless violence of the past two nights.  At one point on Wednesday night, enraged protesters actually attempted to toss a news photographer into a roaring fire

Among the many reports of violence from the Charlotte, North Carolina unrest Wednesday night was one particular shocking example: rioters tried to throw a news photographer into a burning fire.

Local CW affiliate WCCB was on the scene and tweeted out images of the fire and their initial report.

If you are protesting for justice, you sure aren’t going to get it by trying to burn people alive.  I don’t know how anyone out there can possibly justify the kinds of things that we have been seeing in Charlotte.

#WCCB witnessed protesters try to throw still photographer into fire in Uptown #Charlotte. https://t.co/T6i8AH5iGu #CharlotteProtest #news pic.twitter.com/t26WgIlwOh

— WCCB, Charlotte’s CW (@WCCBCharlotte) September 22, 2016

In addition to trying to throw an innocent photographer into a fire, the “protesters” have also engaged in other forms of violence that are extremely alarming.  The following summary originally comes from Paul Joseph Watson

  • Stealing and looting cash registers from local businesses is not a legitimate form of protest
  • A “protester” shooting another “protester” is not a legitimate form of protest.
  • Physically attacking reporters is not a legitimate form of protest.
  • Throwing rocks off bridges at passing vehicles full of families is not a legitimate form of protest
  • Beating up innocent people in parking lots because they’re white is not a legitimate form of protest.
  • Smashing up apartment windows where black people live to “protest” in favor of ‘Black Lives Matter’ is not a legitimate form of protest.
  • Trashing your own neighborhood is not a legitimate form of protest.
  • Looting the Charlotte Hornets team store so you can steal basketball merchandise is not a legitimate form of protest
  • Attempting to hijack cars and terrify their innocent occupants is not a legitimate form of protest.

These sorts of things are not supposed to happen in Charlotte.

We have already seen major rioting in impoverished cities such as Baltimore, Ferguson, Milwaukee and Baton Rouge.  But Charlotte is supposed to be different.  Over the past decade, Charlotte has been one of the more prosperous major cities in America.  Just check out this excerpt from an NBC News editorial

Charlotte isn’t a crumbling urban ghetto. Charlotte is the place you move when you want sunshine, and a shiny new house in a sparkling new subdivision. Charlotte is a prosperous city where you not only can get a job in the bustling and very clean Uptown area, but that job affords you wonderful weekend getaways to a cozy cabin in the Appalachian mountains but an hour away, or to the sandy shores of the Atlantic, also an easy drive from the Queen City. Charlotte is a magnet for the young and old alike and it’s growth is the envy of not a few urban mayors.

It matters that Charlotte has been celebrated by U.S. News and World Reports as one of the best places to live in the entire nation. It filled Charlotte’s residents with pride when other media outlets heralded their city as one of the very best places to raise a family in the entire state of North Carolina.

If rioting like this could happen in Charlotte, then it could happen just about anywhere.

Now is a time when we need to forgive, come together and learn to work with one another again.  I really like what Donald Trump had to say about this…

We all have to walk a mile in someone else’s shoes and see things through their eyes, and then get to work fixing our very wounded country,” Trump said.

Pointing to the violent protests over a police-involved shooting in Charlotte, N.C., Trump said, “Our country looks bad to the world, especially when we are supposed to be the world’s leader. How can we lead when we can’t even control our own cities?” he asked.

Unfortunately, there aren’t a lot of calls for love and forgiveness.

Instead, most of the discussion is focused on anger, hatred, strife and discord.

A house divided cannot stand, and America is more divided today than I have ever seen it in my entire lifetime.

As I stated yesterday, a lot more chaos and violence are coming.  As a society we have been going down the wrong road for decades, and now we are reaping a very bitter harvest.

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