Thursday, October 27, 2016

Nomi Prins:
Deutsche Bank Is In The Dumps
"The problem is, Deutsche Bank does not have $14 billion dollars set aside. Its market cap is around $17 or $18 billion. It really does not have the funds… And now it is negotiating to get a better deal on its deal .. If you look at the derivatives positions of Deutsche Bank, which is around $47 trillion… You start to have contracts throughout the system, and banks have interactions with each other on all of these derivatives… They are all coordinated. They are all connected .. These things don’t just net out as the banks would like regulators and some in the media to believe. These things have tremendous risk .. It does not take a lot of domino effect derivative risk to bring down a financial system. We saw that in the subprime crisis. It was not like everyone had all their positions separated. All of the positions were interdependent .. They were in a market whose value, or lack thereof, depended on how interrelated these positions and toxic securities were. It is the same thing in the derivatives world. Deutsche has a significant amount of derivative exposure as well as not enough capital to support that .. If the United States is leading in terms of 'bigness' of financial systems and complexity but does not have regulation in place to control them, [then when they fail] the fall out changes the world. .. The fall out creates not just a crisis in the United States but creates a fall out throughout the globe. In which the world is still trying to recover and find alternatives to get away from that reckless regulatory system."
link here to the article

1 comment:

Anonymous said...

Just one among many. The chickens are coming home to roost in the banks as a result of STUPID financial management by all sorts of government. Yet the people concerned will no doubt retire well with government indexed pensions when in fact they deserve to be strung up on lamp posts.

People get what they deserve. Canada got Trudeau.