Deutsche Bank: How long before it crashes now?

[Cassius]

Deutsche Bank is systemically important and 'too big to fail', so it will get done. The only question is how, and what problems the solution creates. When you get this far down the track, 'fixing' something like DB's problems is like pushing bubbles down under the wallpaper. They have limited options.
You can raise money by issuing stock, which will dilute existing shareholders' stakes and be politically unpopular. Bye bye Merkel in all likelihood.
You can't bailout the bank under EU rules, unless you bail in creditors first to the tune of 8%, which I think is something like EUR 140 billion. Enough to send some shockwaves through the financial system and make Merkel even more unpopular.
Or you can ignore the rules, which after all are treated like guidelines anyway, and have a state-backed bailout. Except that you lose the moral high ground in that case, and Germany can no longer stand over the likes of Italy with a stick and tell them to sort out their own banking sector. So Italy bails out its banks against EU rules, followed by other nations with banks in crisis, and at that point the wheels really start to come off.
Fixing DB is like the old joke, 'If you want to get there, you don't start from here.' Pain will be involved somewhere as losses have to be imposed somewhere. Very curious to see how this one will end. And even if the US does reduce its fine to $5bn, there are still big problems buried in DB's books.

[1714004432]

1714004432

[Carlsen]

From all I know they made a profit in Q3 2016 of 300 millions.
In Q1 and Q2 they made profit as well. I don't see these are numbers from a crashing bank.
Even hedgefonds have reduced their bets aginst this bank in the last weeks again. And they are usually the first who take advantage of crashing companies.

[starmman]

From all I know they made a profit in Q3 2016 of 300 millions.
In Q1 and Q2 they made profit as well. I don't see these are numbers from a crashing bank.
Even hedgefonds have reduced their bets aginst this bank in the last weeks again. And they are usually the first who take advantage of crashing companies.

I guess the big thing is the $14bn fine from the US authorities, if they can reneg the fine like most of the other banks did it will increase the investment levels back in the bank. The IMF have labelled DB as the most at risk bank in the western world right now.

[Carlsen]

From all I know they made a profit in Q3 2016 of 300 millions.
In Q1 and Q2 they made profit as well. I don't see these are numbers from a crashing bank.
Even hedgefonds have reduced their bets aginst this bank in the last weeks again. And they are usually the first who take advantage of crashing companies.

I guess the big thing is the $14bn fine from the US authorities, if they can reneg the fine like most of the other banks did it will increase the investment levels back in the bank. The IMF have labelled DB as the most at risk bank in the western world right now.

I have read recently that punishment from US side has been reduced to something between 5 and 5.5 billions.
That's still a huge amount, but something the bank can handle.
And there still is that chance that this is not the end of the line. Their lawyers think they can continue to negotiate and reduce the amount even further.

[mindrust]

Peter Schiff says, "Everybody wants to go to Heaven, but nobody wants to die!"

That's exactly the case with Deutsche Bank. One way or another somebody is going to pay for this mess. If you want to pay lesser, it is time to abandon ship!

[tubehand]

It's a matter of time Deutsche Bank collapses, starting a new 2008 event, just worse. Bitcoin will obviously skyrocket as a result, the question is when is it going to face it's inevitable collapse? I reckon it's going to happen anywhere next year.

I hope you're right & bitcoin does prosper from a potential Deutsch Bank crash but how do we know there won't be somebody or something to save their ass?

I know the EU is fucked & will eventually crumble but we all got excited over Cyprus & Greece & they got away with it, bitcoin didn't get anything out of their misfortune.

There will be another bail out


Banks receive money from individuals.

They use this money, loan it out on interest.

Thus cresting more money.

They only reserve .02 cents for every dollar deposited in said bank.

Financial turmoil happens.

Bank has no money

Bank meets with goverment and says were to big to fail, the world can't handle it

Goverment goes to central banks, prints more money on interest gives the money to government

Government gives money to banks in a form of bail out.

The tax payer is the signature on the loan, that the government will pay the central bank back.

The game of bail outs.

The question is how long will the game last?

[Cassius]

^^^ This is not how it works. It's not like in It's A Wonderful Life any more (incidentally one of the worst films ever made). Banks don't lend out customer deposits. They create money when they make loans. Which is totally worse than fractional reserve banking.
And like I wrote above, it's not whether it will be fixed, but how. Someone is in for some pain, that much is unavoidable. I'm intrigued to see what creative solution they come up with.

[LisaLee555]

I still consider the EU is the most stable union, the standart of living there is still very high. It is the whole world who is experiencing financial difficulties at the moment, at least according to http://planetaryproject.com/global_problems/economic/ , not the EU only. I think Brexit was a big mistake, at least now.

[bitbunnny]

I don't agree that Deutsche Bank can crash just like that and that this would significantly affect the Bitcoin price.
No matter the problems this is very big, strong and influenced bank and they will find the solution for ut. With the hepl of establishment if necessary.
And I can't see how this could influence Bitcoin price, especialy not on longterm.

[spazzdla]

^^^ This is not how it works. It's not like in It's A Wonderful Life any more (incidentally one of the worst films ever made). Banks don't lend out customer deposits. They create money when they make loans. Which is totally worse than fractional reserve banking.
And like I wrote above, it's not whether it will be fixed, but how. Someone is in for some pain, that much is unavoidable. I'm intrigued to see what creative solution they come up with.

No one I know accepts this reality... Everyone thinks we can have exponential expansion on finite resources forever :S.. I have a bad feeling a war is brewing to "fix" the ecom.. if Hilary wins WW3 will happen..

[Cassius]

^^^ This is not how it works. It's not like in It's A Wonderful Life any more (incidentally one of the worst films ever made). Banks don't lend out customer deposits. They create money when they make loans. Which is totally worse than fractional reserve banking.
And like I wrote above, it's not whether it will be fixed, but how. Someone is in for some pain, that much is unavoidable. I'm intrigued to see what creative solution they come up with.

No one I know accepts this reality... Everyone thinks we can have exponential expansion on finite resources forever :S.. I have a bad feeling a war is brewing to "fix" the ecom.. if Hilary wins WW3 will happen..

It's odd that you post this after the result of the election is known

I'm assuming you mean the bit about fixing it, not fractional reserve. It's fixable, but it will require pain to be inflicted somewhere. That's the question, who gets the pain, not whether there will be pain. And of course whether the pain causes other problems. It's quite possible the financial shockwave of a bail-in, for example, would create real damage.