Request any song you want for FREE! All songs requested will be tuned to a 432 Hz frequency.

Request Now

TETELESTAI | 1-800 Numbers

This is where the 800#'s will be listed which will be included in the TETELESTAI post once published.

(Note: The TETELESTAI post is the official "Go" for redemption/exchange. Despite Yosef's departure, it will still be sent out for publication when the time comes.)

Guest Posting Now Available

Dinar Chronicles is now allowing viewers to guest post. If you wish to speak your mind and write a post/article about the current situation relating to Iraq, the RV, the GCR and so on. You may now send in an entry.

All you need to do is send your entry to KillerZetzz.guestpost@blogger.com with these following rules.

The subject of your email entry should be: "(Title of your post)" - Guest Post by (name) OR Anonymous Guest Post

- Proper grammar
- No foul language (not strictly followed)
- No bashing of others
- Solely write intel, rumors, news, thoughts regarding Dinarland, Iraq, the RV, the GCR and anything that is relating
- Your signature/name/username at the end

If your guest post fails to send to the above email address due to a "captcha" error -- that means the daily limit has not reset yet. It resets every 24 hours. If this is the case then please send it to UniversalOm432Hz@gmail.com so that it will be posted manually.

Send your entry and speak out today!

Follow Dinar Chronicles by Email

Monday, September 19, 2016

Italy's PM Unloads On Deutsche Bank's Unfixable Problem

Italy's PM Unloads On Deutsche Bank's Unfixable Problem: "Hundreds And Hundreds Of Billions Of Derivatives"

Sep 19, 2016 9:18 PM | Zero Hedge

After a tumultuous week for Deutsche Bank which saw the DOJ demand a $14 billion settlement for the bank's past RMBS transgressions, it was another bad day for the giant German lender, whose stock and contingent converts tumbled after the investing community realized that even a modest $5.5 billion final settlement would leave it perilously undercapitalized and likely scrambling to raise more cash.



As SocGen's Andrew Lim calculated, Germany’s biggest bank would be “significantly undercapitalized” even if an eventual settlement with the DoJ can be covered by the bank’s reserves. Any settlement above €5.4 billion would imply a capital increase is needed just to pay the fine, he wrote.

Taking prompt remedial action, news leaked over the afternoon that Deutsche Bank was hoping to bolster its balance sheet and boost its capitalization, when The Street first reported that it was trying to securitize at least some $5.5 billions of corporate loans to offload risk. The problem for Deutsche Bank, already ranked among the worst-capitalized lenders in European stress tests before the DOJ's $14 billion demand, is that by admitting it is in balance sheet "recovery" mode it would make shareholders even more nervous: what if the bank failed to securitize those loans? Or what happens if yet another legal settlement arrives? Or, worst of all, what if Mario Draghi cuts rates again and pressures the bank's inceome statement even more? There is little the bank can cut as is: CEO John Cryan already suspended the bank's dividend to preserve capital and has repeatedly ruled out tapping investors for more; but if he has to, he surely will.

But not even that is the biggest problem facing Deutsche Bank.

Recall that several years ago, we were the first to point out the true "elephant in the room", namely Deutsche Bank's $75 trillion at the time in gross notional derivatives which as we said then was about 20 times bigger than Germany's GDP, and 5 times bigger than the entire economic output of the Eurozone." Much to the chagrin of those who did (and still do) accuse of being conspiratorial something or another, since then Deutsche Bank stocks has plunged, reaching all time lows as recently as a few months ago.

Still, Deutsche Bank's "derivative problem" was largely ignored by the "experts" because why bring attention to something which is fundamentally a devastating break in the narrative that "Europe is fine" and the financial crisis is contained.

Fast forward to today when Europe is once again not fine, only this time one can't blame Europe's problems on Greece or Brexit, when in a surprising admission of reality, none other than Italy's prime minister Matteo Renzi, "went there" and slammed Deutsche Bank as the true "derivative problem" facing Europe.

To be sure, Renzi has his own problems, chief among which is how to conclude the latest and greatest bail out of Italy's third largest and most insolvent bank, Monte Paschi, a process which we hear is not going well at all, without resorting to a government-funded rescue - a plan which the Germans have repeatedly frowned upon.

So it is not surprising that when faced with stiff resistance from the Germans, Renzi decided to call a spade a spade when, as Reuters reports, he said that the difficulties facing Italian banks over their bad loans are miniscule by comparison with the problems some European banks face over their derivatives.

As Reuters reports, Renzi once again broke with the fine European tradition of ignoring the massively overlevered elephant in the roon, and said on Monday that Germany's central bank chief Jens Weidmann should concentrate on fixing the problems of his own country's banks, after Weidmann had urged Italy to cut its huge public debt.

Specifically, Renzi told reporters in New York that Weidmann needed to solve the problem of German banks which had "hundreds and hundreds and hundreds of billions of euros of derivatives" on their books.

He was, of course, referring to Deutsche Bank.

Renzi, who has staked his career on a referendum on constitutional reform this autumn, has repeatedly criticized other European leaders in the last few days over what he sees as an inadequate European Union response to the problems of his country's economy and Europe's immigration crisis, which in 2016 has slammed Italy most acutely, largely bypassing Germany for the time being. In this particular case, Renzi was responding to an interview Jens Weidmann gave to daily La Stampa on Monday, in which the German said Italy needed to consolidate its budget to avoid doubts emerging about the sustainability of its public debt.

Renzi's angry response was predictable: stop worrying about Italy's debt problem, after all that's what the ECB is for, to monetize it and keep rates artificially low indefinitely. Instead worry about your own mega bank, which judging by its stock price, is something the market has been doing for quite a few months now.

And while Renzi may be wrong about almost everything else, he is right about Deutsche Bank's "hundreds and hundreds and hundreds of billions of euros of derivatives."

€42 trillion to be precise.



Then again, it's more than just Deutsche Bank's problem; more than just Germany's problem. If something bad happens to DB, it is Europe's problem.



So while DB may or may not find a few billion under the rug to plug its latest leaking hole, the real question is what happens when, not if, another crisis flares up and one or more counterparties to the bank's trillions in various derivatives suddenly is unable to post margin, as its obligation becomes a pre-petition claim, sticking DB with the entire gross notional derivative amount and forcing the German giant to foot the gross, not net. Something tells us that like in 2013, nobody will acknowledge the biggest elephant in the room: after all, at this point financial liabilities are now a political issue (especially when one can blame Putin). The only difference with 2013 is that as Europe continues to splinter, more disenchanted political leaders (because the "enemy of my enemy is my friend") will join Renzi in admitting that Europe' emperor - Germany - and its mega bank, is not only naked but one needs scientific notation to express just how big its financial problems truly are.


Disclamer:

We are in compliance with, "Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use."

All rights reserved go to their respective holders. We do not own the intellectual property shown on this website, the respective holders own that privilege unless stated otherwise.

We do not endorse any opinions expressed on the Dinar Chronicles website. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on Dinar Chronicles.

Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not intend to and are not providing financial, legal, tax, political or any other advice to any reader of the website. This website is...Read More