What will the upcoming Deutsche Bank failure mean for gold?

derrybderryb Posts: 27,428 ✭✭✭✭✭
Merkel says no bailout, does this mean depositor bail-in?

DB for a while now has been a major threat to the euro landscape. Only a matter of time. What will it's demise mean to the euro?

When euro goes down, US dollar goes up.
When US dollar goes up gold goes down. . . normally. Will it be different this time as new safehavens are sought? We shall soon see.

“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

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Comments

  • Originally posted by: derryb

    Merkel says no bailout, does this mean depositor bail-in?



    DB for a while now has been a major threat to the euro landscape. Only a matter of time. What will it's demise mean to the euro?



    When euro goes down, US dollar goes up.

    When US dollar goes up gold goes down. . . normally. Will it be different this time as new safehavens are sought? We shall soon see.




    This is what I was talking about in my post, I agree European Banks are in trouble and I agree capital will move to the Dollar making a lot higher US markets and stronger dollar. Now if the Fed's hit the rate hike in December and the Dow or markets and the Dollar makes it move I think 2017 will be a super buying opportunity for metals but I think the markets and the Dollar will be short lived.
  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    Considering all the world's been through, the fright to safety might only last a couple of days.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • Gold needs fuel it is getting tired!!!
  • TwoSides2aCoinTwoSides2aCoin Posts: 40,833 ✭✭✭✭✭
    I don't think there is much correlation. The euro is in the same shape as all other currencies . Go figure. Banks grow too big to fail and when they do, a lot of poverty gets spread around.
  • oldstandardoldstandard Posts: 387 ✭✭✭
    Originally posted by: TwoSides2aCoin

    I don't think there is much correlation. The euro is in the same shape as all other currencies . Go figure. Banks grow too big to fail and when they do, a lot of poverty gets spread around.




    and repeat again
  • ranshdowranshdow Posts: 1,315 ✭✭✭✭
    If DB really does go down the Eurodollar & money mkts could dry up, cascading into a general liquidity crunch like in 2008.
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    When DB goes down, metals will initially drop (remember Lehman?). That will be your clue to back up the truck and maybe even rent another truck.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • OPAOPA Posts: 15,775 ✭✭✭✭✭
    Don't hold your breath waiting for DB to go down. Not gonna happen.
    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • dpooledpoole Posts: 5,341 ✭✭✭✭✭
    Don't hold your breath waiting for DB to go down. Not gonna happen.





    image
  • TwoSides2aCoinTwoSides2aCoin Posts: 40,833 ✭✭✭✭✭
    Buy DB, DB !
  • derrybderryb Posts: 27,428 ✭✭✭✭✭

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Originally posted by: OPA
    Don't hold your breath waiting for DB to go down. Not gonna happen.


    Yeah, you're right, its probably nothing... image

    image

    image

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • rickoricko Posts: 69,503 ✭✭✭✭✭
    This should be very interesting... Merkel says no plan to bail out DB....will definitely make waves. Cheers, RickO
  • roadrunnerroadrunner Posts: 27,766 ✭✭✭✭✭
    Originally posted by: OPA

    Don't hold your breath waiting for DB to go down. Not gonna happen.






    Lehman was like a boutique specialty store compared to DB. The King was able to cover the failed assets of Lehman and restore markets. For DB which probably has 10X to 100X the risk and leverage that Lehman had, it will takes all the world's Kings, and all the Kings' horses, and all the Kings' men to keep Humpty Dumpty on top of that wall. Turkey has been talking about taking over DB. They do need a bigger bank to keep their money laundering ops growing. But can they afford to assume the 42 TRILL Euro in derivative's risk? Even if only 3-5% of the debt/positions failed as so many models suggest, that's still a couple TRILL Euro to cover. The GDP of Germany is only 3 TRILL Euro.



    Bank linkages



    Would not be surprised to see DB's share price stop right here in the $9-$11 range. It's got a fairly advanced EW structure, looking to be in a final 5th wave of 5. And its 14 year log chart has an enormous wedge whose lower projection points to $11....right where it is now (or approx $5 on a linear chart). It peaked in price in May 2007....5 months before the US stock market. I guess DB never got its full share of QE to keep the charade going. One thing that 2008 taught these guys. A monster bank cannot be allowed to fail on its own....at least not without a daisy chain that would take most of them all down together. They will try to protect their own.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Deutsche Bank is currently a counter party to virtually every major bank in the world, in virtually all asset classes.

    image

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭
    So if there's no bail out, and DB isn't allowed to fail, that simply means that "someone" else other than taxpayers will get hit, and that someone is.............................................

    well, shoot......who else is there to take the hit, besides depositors?


    Deutsche Bank is currently a counter party to virtually every major bank in the world, in virtually all asset classes.

    The critical question seems to be which of DB's leveraged bets have gone bad, and who is on the other side?

    Didn't US taxpayers donate a big wad of QE to Europe last time around? Where does all that money actually go?

    Something tells me that there's some re-pricing going on as we speak.

    We plebs just aren't privy to exactly what it means. What it means to me is don't own bonds. Debt is cheap and it's probably going to get cheaper.

    Of course, the dollar is a debt instrument too.

    It could really get interesting. This is uncharted territory. I don't know which asset class is best to own although I still suspect that it's metals and cash. Weird goings-on.

    Who is John Galt?


    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • TwoSides2aCoinTwoSides2aCoin Posts: 40,833 ✭✭✭✭✭
    Dead cat bounce ?
  • johnny9434johnny9434 Posts: 19,992 ✭✭✭✭✭
    Originally posted by: OPA
    Don't hold your breath waiting for DB to go down. Not gonna happen.


    image
  • VanHalenVanHalen Posts: 3,180 ✭✭✭✭
    Nothing a few trillion Deutsche Marks and NIRP can't fix. Oh I almost forgot............
  • ShadyDaveShadyDave Posts: 1,685 ✭✭✭✭✭
    If anything happens soon, it'll be on December 6th or soon thereafter. 15+ billion dollars of bonds are maturing, so that will be a giant hurdle for the company to deal with and raise from new investors. Next up is to fight the 14 billion dollars the Justice department is throwing around. Will probably be between 2-4 billion after negotiations...



    http://quicktake.morningstar.c...t/bonds.aspx?symbol=db





    http://www.wsj.com/articles/de...-securities-1473975404
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Its the shady, unregulated derivatives casino between banks and DB is a major hub of the broken wheel. DB is about to rock the very foundation of the financial world and the words "counter party risk" will become headlines.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    apparently not any more

    news is saying the reduction in the fine will stave off any trouble

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • oldstandardoldstandard Posts: 387 ✭✭✭
    Just use the people's money to bail them out it is the American way. when this all moves over here I will hate to see how much we have to chip in.
  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    it won't.

    DB can manage the reduced fine with their reserve set aside for the fines
    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Originally posted by: MsMorrisine
    apparently not any more

    news is saying the reduction in the fine will stave off any trouble


    "rumor is saying."

    DB execs have not even arrived in the US yet to negotiate with regulators.

    Any "agreement" to reduce their fine will only confirm how dangerously close they are to bringing down the system. These fines don't get negotiated until there is no other choice. View any reduction as a strong indicator of how dangerous DB is to all things not DB.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • ShadyDaveShadyDave Posts: 1,685 ✭✭✭✭✭
    Originally posted by: derryb

    Originally posted by: MsMorrisine

    apparently not any more



    news is saying the reduction in the fine will stave off any trouble





    "rumor is saying."



    DB execs have not even arrived in the US yet to negotiate with regulators.



    Any "agreement" to reduce their fine will only confirm how dangerously close they are to bringing down the system. These fines don't get negotiated until there is no other choice. View any reduction as a strong indicator of how dangerous DB is to all things not DB.









    I've never heard of a financial company agreeing to pay a "recommended fine". This is the game that regulators and large financial corporations play and it wouldn't show where DB stands one way or another. It has nothing to do with the position a company is in, it had to do with the issue and impact against customers, how the issue was created and what was done to resolve it after it was identified. It is the CEO's duty to shareholders and other interested parties to minimize any possible fines. Look how easy Wells Fargo got off after possibly ruining 2,000,000 customers credit scores and charging fees on products they never signed up for.



    PS: This is what I do for a living...
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Originally posted by: ShadyDave


    I've never heard of a financial company agreeing to pay a "recommended fine". This is the game that regulators and large financial corporations play and it wouldn't show where DB stands one way or another. It has nothing to do with the position a company is in, it had to do with the issue and impact against customers, how the issue was created and what was done to resolve it after it was identified. It is the CEO's duty to shareholders and other interested parties to minimize any possible fines. Look how easy Wells Fargo got off after possibly ruining 2,000,000 customers credit scores and charging fees on products they never signed up for.

    PS: This is what I do for a living...

    So, how many times in recent years have US regulators agreed to reduce a fine for a Too Big Too Fail bank? If they agree to reduce this one it will reflect just how close DB is to failing.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • ShadyDaveShadyDave Posts: 1,685 ✭✭✭✭✭
    Originally posted by: derryb

    Originally posted by: ShadyDave





    I've never heard of a financial company agreeing to pay a "recommended fine". This is the game that regulators and large financial corporations play and it wouldn't show where DB stands one way or another. It has nothing to do with the position a company is in, it had to do with the issue and impact against customers, how the issue was created and what was done to resolve it after it was identified. It is the CEO's duty to shareholders and other interested parties to minimize any possible fines. Look how easy Wells Fargo got off after possibly ruining 2,000,000 customers credit scores and charging fees on products they never signed up for.



    PS: This is what I do for a living...


    So, how many times in recent years have US regulators agreed to reduce a fine for a Too Big Too Fail bank? If they agree to reduce this one it will reflect just how close DB is to failing.









    To answer your question, I have no idea how many but it happens all the time with every company. Whether it is something huge like a LIBOR rigging or a fine could stem from a customer complaint. If you do a quick google, "bank negotiates fine", that search comes up with a bunch of different names of companies.



    Fines are no different than conducting any other business transaction. That is what fines are to financial services companies....part of business. image



    I'm not sure where you think negotiating fines has to do with the health of a company, because it has nothing to do with it. It has to do with a company trying to pay out as little as possible. It doesn't matter if it is Goldman, VW, Johnson & Johnson or negotiating an OSHA fine for a construction company... they will all do whatever they can to reduce the fine they have to pay. No different than you and I challenging a speeding ticket in court. We hope the cop doesn't show up or they didn't calibrate their radar in hopes of getting off or getting a reduced fine.







    Going back to the topic, I think DB will eventually become a mess. Whether it collapses or there is a bail out or a bail in, its future is not looking good. Uncertainty fuels metals, and these days a lot of what is going on and what the future holds is very uncertain. That is part of why I'm holding some shiny. image
  • oldstandardoldstandard Posts: 387 ✭✭✭
    Going back to the topic, I think DB will eventually become a mess. Whether it collapses or there is a bail out or a bail in, its future is not looking good. Uncertainty fuels metals, and these days a lot of what is going on and what the future holds is very uncertain. That is part of why I'm holding some shiny. image



    I think everyone can agree what you said the show has just began, we will join in 2018 when social security and the dept crisis began. Marco Rubio was the only one the brought up the coming social security problem and that died off quick, we need to talk about more important things like birth certificates and small hands.
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Originally posted by: ShadyDave

    I'm not sure where you think negotiating fines has to do with the health of a company, because it has nothing to do with it. It has to do with a company trying to pay out as little as possible. It doesn't matter if it is Goldman, VW, Johnson & Johnson or negotiating an OSHA fine for a construction company... they will all do whatever they can to reduce the fine they have to pay. No different than you and I challenging a speeding ticket in court. We hope the cop doesn't show up or they didn't calibrate their radar in hopes of getting off or getting a reduced fine.



    If the fine will take down a Too Big Too Fail Bank and in turn take down the economy then regulators will think very hard about the size of the fine. TBTF banks are in a different category than your run of the mill company that cannot take down an economy. US regulatory agencies do not want to be viewed as the cause of economic depression. Ironically their failure to do their jobs since 2008 is why we are where we are today.

    DB failure is a serious threat to the economy. Regulators will not let their regulating be the reason DB goes down. A reduction of their initial fine will indicate just how close to the edge DB is.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • oldstandardoldstandard Posts: 387 ✭✭✭
    Originally posted by: derryb









    So, how many times in recent years have US regulators agreed to reduce a fine for a Too Big Too Fail bank? If they agree to reduce this one it will reflect just how close DB is to failing.







    Nice call derryd on the fines looks like they will reduce it from 14 Billion to a few million over 5 billion.
  • MilesWaitsMilesWaits Posts: 3,601 ✭✭✭✭✭
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    Look out below
    Waiting for the swell in PM's and surf.
  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭
    back to the topic, I think DB will eventually become a mess. Whether it collapses or there is a bail out or a bail in, its future is not looking good. Uncertainty fuels metals, and these days a lot of what is going on and what the future holds is very uncertain. That is part of why I'm holding some shiny. image

    Nice call derryd on the fines looks like they will reduce it from 14 Billion to a few million over 5 billion.

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    Gold down $35.80 now. This happened in 2008 as well. Does anyone think these are normal market movements?

    Bill Gross has a good writeup on zerohedge about the Fed's policies. Italy just issued some 50 year bonds. Anyone interested? Good yields?

    If you think that DB is simply responding as a normal business does to proposed fines, you are not sufficiently jaded yet. But, you're getting there.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    NUGT went DUST

    hate it as we all have gold. the chart ran to 137x or so then pulled back and only ran to 134x or so. that was a danger sign.

    But where does it go from here? I don't know
    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    as far as DB. the germans are infuriated and indignant.

    they'll be pressing for that rumoured 5.4Bil fine

    that looks like it is panic averted.

    DB was up on the German stock exchange today.

    Perhaps this good news on the banks also contributed to the gold slide??
    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Imminent invasion or imminent bank failure?

    obviously a panic is being expected.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • HATTRICKHATTRICK Posts: 1,160 ✭✭✭
    Originally posted by: OPA

    Don't hold your breath waiting for DB to go down. Not gonna happen.




    "If you push something hard enough, it will fall over"image



    It's only a matter of time before the next big bang !



    " If you push something hard enough, it will fall over. "
  • MsMorrisineMsMorrisine Posts: 23,353 ✭✭✭✭✭
    Originally posted by: derryb
    Imminent invasion or imminent bank failure?

    obviously a panic is being expected.



    Panic yes. Banking? Possibly. It can be claimed the terror excuse in the article. They could know something about the likelihood of a dirty bomb threat. On another front, the easiest land pass into Western Europe from Russia is through Germany.

    Possibilities.
    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭
    ECB is going to taper their QE contributions to the European banks? With a reduced fine, maybe they think that they've got DB stabilized now.

    What a crock.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • TwoSides2aCoinTwoSides2aCoin Posts: 40,833 ✭✭✭✭✭
    It means the price of corn must go up, as golden harvests go. image
  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭
    It means the price of corn must go up, as golden harvests go.image

    If corn goes up, is that a good omen for the Cornhuskers? They seem to be on a roll this year.image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • ShadyDaveShadyDave Posts: 1,685 ✭✭✭✭✭
    Originally posted by: jmski52

    back to the topic, I think DB will eventually become a mess. Whether it collapses or there is a bail out or a bail in, its future is not looking good. Uncertainty fuels metals, and these days a lot of what is going on and what the future holds is very uncertain. That is part of why I'm holding some shiny. image



    Nice call derryd on the fines looks like they will reduce it from 14 Billion to a few million over 5 billion.



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    Look out below







    Gold down $35.80 now. This happened in 2008 as well. Does anyone think these are normal market movements?



    Bill Gross has a good writeup on zerohedge about the Fed's policies. Italy just issued some 50 year bonds. Anyone interested? Good yields?



    If you think that DB is simply responding as a normal business does to proposed fines, you are not sufficiently jaded yet. But, you're getting there.









    So with Wal-Mart fighting their $600,000,000 fine, does this mean that they are about to collapse too? http://finance.yahoo.com/news/wal-mart-balks-paying-600-161953058.html





    If you want, I can post probably 50 other links to articles where large companies are fighting fines from THIS YEAR, but what do I know...

  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭
    DB's proposed fines only exacerbate their liquidity problems, and even if the regulators and IMF find ways to scoot them money under the rug, the numbers are still daunting for DB.

    The problem is that the central bankers are addicted to doing business in a way that isn't sustainable and they keep trying to sustain poor policies. Sooner or later you run out of other people's money.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    Originally posted by: ShadyDave

    So with Wal-Mart fighting their $600,000,000 fine, does this mean that they are about to collapse too? http://finance.yahoo.com/news/wal-mart-balks-paying-600-161953058.html


    If you want, I can post probably 50 other links to articles where large companies are fighting fines from THIS YEAR, but what do I know...




    DB's problem is not in being fined. It is a problem of having the money (liquidity) to pay the fine. DB is highly leveraged in derivatives (bets) with other banks, many of whom will heavily share DB's pain.

    Highly leveraged banks cannot afford the need for billions of quick cash to pay a fine. The difference between DB and the Walmarts is in their business models. Walmart has cash, inventory and real estate - it has real assets. DB has receipts from the bookie who may or may not be able to pay up if DB ruins the game. DB, like most all highly leveraged banks (most all banks), doesn't even have 90% of the cash that depositors trusted them with. The Wall Street led repeal of the Glass-Steagall Act empowered them to gamble with it.

    Regulatory agencies that impose fines on financial institutions surely have to consider the consequences of the amount of their fine. This is why the final amount will tell us everything we need to know about the health of DB. A lowered fine will confirm what the IMF has said about DB being the largest threat to the world economy.

    The biggest failure is the fact that the lessons from bad banking practices in 2008 still elude those controlling the economy while those ruining it continue to rack up massive personal profit. Wells Fargo is a prime example of how bankers are allowed to personally profit while shearing the customers and never having to face a jury made up of those customers.

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • TwoSides2aCoinTwoSides2aCoin Posts: 40,833 ✭✭✭✭✭
    If bankers got a trial with a jury, it would have to be a jury of their peers. And we know all the fines are paid by the consumers anyway... in the form of higher fees.
  • derrybderryb Posts: 27,428 ✭✭✭✭✭

    Good eight part series on DB:

    How a Pillar of German Banking Lost Its Way

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • derrybderryb Posts: 27,428 ✭✭✭✭✭
    edited May 31, 2018 9:10AM

    “We can ignore reality, but we cannot ignore the consequences of ignoring reality.” – Ayn Rand

  • jmski52jmski52 Posts: 19,828 ✭✭✭✭✭

    They're talking now about loosening the restrictions on liquidity requirements and leveraged trades by the banks that were enacted in the watered-down 2010 Dodd-Frank Bill.

    https://heritage.org/markets-and-finance/report/financial-regulatory-reform-the-house-and-senate-brief-comparison

    More fun 'n games for banking.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • oldstandardoldstandard Posts: 387 ✭✭✭

    @derryb said:
    Merkel says no bailout, does this mean depositor bail-in?

    Well it is obvious the trouble will start ( in the process) there this time then head here, I agree there will be no bail outs this time just bail-in. The Governments are so broke what other option is there.

  • KkathylKkathyl Posts: 3,264 ✭✭✭✭✭

    I am pretty sure its already baked in the numbers, been watching the demise for the past 10 years. Death by a thousand pin pricks

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