Deutsche Crashes, CommerzBank Burns and Wells Fargo’s Next
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.
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).
“Precautionary recapitalization” sounds like the table is being set for some type of restructuring of stocks. If that pacifies the shareholders DB may be able to continue operations for a while longer. It may be too little too late. If these banks blow apart and take the entire Western banking system with them, it is by design and the criminals at the very top have stolen all the wealth possible. If these banks blow apart it would transfer the remaining wealth of the many to the few. Remember, currency, wealth, stocks do not go “poof” when a bank fails or the stock market crashes. All of that currency, wealth and stocks have another bid on the other side waiting for just such an event. The mainstream media will make it sound like the items did go “poof”, however, that is part of the design and part of the mirage that is painted for people to remain ignorant and confused about a “specified event“. I say let them crash, burn and take Wells Fargo with them.
Next up is CommerzBank with an entire division of its holdings completely ablaze. This banking behemoth, who’s shares dropped 6.5% on Friday on top of 3.1% drop on Thursday. The plan is to “layoff” 20% of it’s work force and cut dividends. CommerzBank is cutting their workforce back to 2008 crash levels. Hmmmm, funny their job cuts are reflected by 2008 financial crash. It seems like joining the too big to jail club has not worked out for this particular member of the crime syndicate. Commerzbank is also going to “temporarily” stop paying dividends to their shareholders. Oh, wait, Commerzbank has only paid one dividend since 2008 and that was in 2015. So to the shareholders out there, good luck in seeing another dividend anytime soon.
We learn from Bloomberg that Commerzbank may lose the entire workforce of Dresdner Bank. Communities typically struggle when companies fire this volume of employees at one time. If you haven’t listened to the latest Shadow of Truth, Dave and I take a look at the implications all of these moves have on the larger economy and not just the German economy.
Commerzbank Chief Executive Officer Martin Zielke announced plans Thursday to eliminate 9,600 jobs, leaving it no bigger than it was before its 2008 acquisition of Dresdner Bank. The Frankfurt-based bank has lost about 39 percent of its market value this year.
“Germany is still overbanked, and it’s tough to have Germany as your home base when you want to compete with French, Spanish or American peers that operate in less fragmented home markets,” said Klaus Fleischer, a professor of finance at the University of Applied Sciences in Munich.
Last but certainly not least is this weeks mega crime by another member of the banking crime families. Wells Fargo CEO & Chair John Stumpf appeared before Congress to explain why his banking cabal, with corporate welfare king, Warren Buffet as the largest share holder, had been stealing and committing fraud on such an outrageous scale. Well, Stumpf did accept responsibility for the actions of his criminal enterprise, however, it is unlikely he will be imprisoned for grand larceny, fraud or out right theft any time soon. You see, he, like the other members of the too big to jail banking crime syndicate are immune from prison. Wells Fargo, “supports the troops” but only if they profit.
As RT reported on the trifecta of criminality just this week:
Lawmakers on Capitol Hill have accused Wells Fargo’s CEO of running a “criminal enterprise” as the bank faces a new $20 million fine for soldiers’ car loans and financially harming military families.
Wells Fargo CEO & Chair John Stumpf appeared before the House Financial Services Committee in what turned into more than four hours of hostile questioning.
Lawmakers did not hold back their harsh words, and passions ran high in the chamber.
Representative Gregory Meeks (D-New York) equated Wells Fargo to a “criminal enterprise” while dodging any accountability.
“Your bank, you, CEO, Chairman, for me was on top of what’s basically been a criminal enterprise because when I look at consistency, time after time after time and time again, you had to get fined,” Meeks said. “That must mean you are making a lot of money because it is easier to pay the fine. Because you know that nothing else is going happen to you. You pay the fine, you get away, you make a lot of money.”
Can someone in authority please add the following words to their vocabulary when a banking crime has been committed: fraud, theft, malfeasance, criminal, prison time, shut-down, thief, lawless, felonious, unethical, evil, vile. These are just for starters as there are a great many more words in the English language that would be appropriate. Maybe if the appropriate language were used we could move out of the “safe space” and get down to the business of prosecuting these criminals for the crimes against humanity that have been committed.
These three examples of banking malfeasance are merely the tip of the iceberg. The financial crisis that began in 2006, exploded onto the scene in 2008 has never been fixed. In fact, it has been made much worse and the three examples above merely demonstrate what happens when cancer is encouraged to grow or completely ignored by the “doctor” (regulators). When you allow someone to make up their on rules when handling other peoples money there is typically going to be serious problems. This is just the beginning. There will be more to come as the cancerous banking system around the world begins to implode on itself. Too big to jail may be the best thing to ever happen to these banksters.
How much more can the system take? How many more signs does a person need in order to understand the banking system, not only globally, but locally as well, is in very deep trouble.