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Help me understand what the hell is going on with Deutsche Bank.
Posted on 9/29/16 at 8:48 pm
Posted on 9/29/16 at 8:48 pm
So, the DOJ is trying to reach a settlement with Deutsche Bank for $14 Billion, which would put one of the world's most important banks dangerously close to insolvency. Do I have that right? Is this not utter extortion on the part of the DOJ? Why is DB seemingly going along with it? Is this the point we are at in the world economy where the German government is probably going to bail out DB so they can turn around and pay the DOJ? Can someone who is much more educated than I am explain WTF is going on?
4
Posted on 9/29/16 at 9:33 pm to LSUTigersVCURams
Deutsche bank basically has $16B of equity and $160b+ of debt, they also have a gigantic derivatives book like $75 trillion dollars. Merkel has been a total beeyotch about bailing out the other banks in europe in italy and greece so if she bails out deutsche bank shes a giant hypocrite, if she doesnt then it could fail and bring down global markets. The bank says theyre fine, but of course they would. It will be interesting to watch unfold but they are a ticking time bomb and proof that banks should not be allowed to achieve that size without even more oversight. Today some big hedge funds bailed on them so thats why the sudden big dip today. Personally Id love to see them fail, im tired of this notion of too big to fail.
Also id like to throw in a side piece that europe in general is a complete POS and i personally think the muslim migrants ruin it and turn it into a 3rd world continent in the next 20-30 years.
Also id like to throw in a side piece that europe in general is a complete POS and i personally think the muslim migrants ruin it and turn it into a 3rd world continent in the next 20-30 years.
This post was edited on 9/29/16 at 9:35 pm
Posted on 9/30/16 at 7:25 am to dabigfella
quote:
Also id like to throw in a side piece that europe in general is a complete POS and i personally think the muslim migrants ruin it and turn it into a 3rd world continent in the next 20-30 years
Honestly, this makes you look like a huge bigot and devaulues info you post.
Posted on 9/30/16 at 7:28 am to LSUTigersVCURams
You'd probably get a better, more detailed answer from Doc in his thread, but basically the DOJ says DB owes $14 billion for selling bad mortgage backed securities before the financial crisis. They can't afford to pay that much, and they've been having some rough times these past two years. They'll either have to heavily dilute their shareholders or need a bailout (both will likely happen). That's a problem because Germany has been reluctant about bailing out other EU member's banks, instead preferring debt negotiations and dilution of shareholders. Now the shoe is on the other foot, and while she may have said she won't bail out DB, she most likely will.
There's also speculation that this is a response to the EU claiming thay AAPL owes about the same amount in taxes to Ireland. Our Treasury secretary advised them not to do it, but they ignored him and Ireland's protest of the decision. So we hit the biggest EU member in their biggest weakness. If this happened, I'm honestly quite impressed with our government for pimp slapping the EU.
There's also speculation that this is a response to the EU claiming thay AAPL owes about the same amount in taxes to Ireland. Our Treasury secretary advised them not to do it, but they ignored him and Ireland's protest of the decision. So we hit the biggest EU member in their biggest weakness. If this happened, I'm honestly quite impressed with our government for pimp slapping the EU.
Posted on 9/30/16 at 9:03 am to tlsu15
quote:
Honestly, this makes you look like a huge bigot and devaulues info you post.
Looks like we've got an SJW up in here!
Posted on 9/30/16 at 9:06 am to tlsu15
the muslim migrants are ruining europe if you cant see that youre ignorant, I read one study that predicted sweden would indeed be a third world nation within a mere 15 years. These people do not assimilate, I was in paris not that long ago, they're everywhere, they're homeless, its incredibly sad. Europe in general is full of socialism so they will support these people, the problem is where will the money come from? Their tax bases are dwindling as people with money flee so I just realistically dont see a solution long term as more and more come in while more and more attacks happen. How many attacks have happened in europe these past 18 months?
Posted on 9/30/16 at 9:16 am to dabigfella
quote:
the muslim migrants are ruining europe if you cant see that youre ignorant
Problems with properly handling migration have been a historical issue all through history. The a major contributor to the fall of the Western Roman Empire can easily be traced to their system breakdown of assimilating migrants.
quote:
These people do not assimilate,
This is the fault of the European migration policy. Breaking down former community ties by separating communities and dividing groups of people into different areas is always important. Almost every succesful migration in history did this "divide & conquer" approach to forcing assimilation
Posted on 9/30/16 at 9:20 am to dabigfella
Basic point is, this large of a migration was always going to be hard and have issues, but it didn't need to fail. There is nothing to suggest that being muslim precludes you from assimilating into Western culture.
Heck just look at our president, he is the perfect example of a Muslim migration success story #Jokes
Heck just look at our president, he is the perfect example of a Muslim migration success story #Jokes
Posted on 9/30/16 at 9:25 am to GenesChin
We get it some of y'all don't like muslims because they are different than you.
Can we get back to talking about DB? Looks like a major bounce back this morning. Anybody know why
? I figured the 8% down lows of yesterday would not last, but I didn't realize the correction would go back to a net gain from the close two days ago.
Can we get back to talking about DB? Looks like a major bounce back this morning. Anybody know why
? I figured the 8% down lows of yesterday would not last, but I didn't realize the correction would go back to a net gain from the close two days ago.
Posted on 9/30/16 at 9:46 am to LSUTigersVCURams
Just out of curiosity, does this mean much for National Bank of Greece?
Posted on 9/30/16 at 9:53 am to HYDRebs
quote:
"The catalyst for the DB spike is again a rumor. There has been trader unsubstantiated speculation - launched on Twitter - that the bank may reach a lower RMBS settlement with the U.S. DoJ than feared. As Bloomberg seriously notes: "unverified handles on Twitter speculate the DoJ fine may be $5.4b, vs reports earlier this month the DoJ had sought $14b. Unverified handles including @fiatcurrency, @Fxmacro Tweet or retweet the speculation."
Posted on 9/30/16 at 10:04 am to LSUTigersVCURams
quote:
Can someone who is much more educated than I am explain WTF is going on?
DB did some bad stuff with the MBS and other stuff back in the middle part of the last decade. Other banks did as well. Many of the other banks including all of the US HQ banks have either gone under or taken their medicine and paid their fines. DB has not... they still have a huge potential fine hanging over them.
In addition, DB has has been hurt by the general economic malaise in the Euro Zone.
Those two things have led to a point where they are potentially very undercapitalized. Like most things economic... the threat of bad news can send things tumbling, not necessairly waiting for the bad news to happen. People are starting to get anxious about their overexposure to EU issues and this pending fine, and you can start to see a run. Financially, they are OK today, but just barely... if a run happens, it won't take long for things to get from bad to really bad.
Doc's thread is awesome but it's pretty high level.
Posted on 9/30/16 at 10:17 am to HYDRebs
quote:
We get it some of y'all don't like muslims because they are different than you.
Can we get back to talking about DB?
fricking this
Posted on 9/30/16 at 10:26 am to Porker Face
Can someone tell me where the $14B number came from?
eta: I mean, why $14B, not who came up with the number.
eta: I mean, why $14B, not who came up with the number.
This post was edited on 9/30/16 at 10:27 am
Posted on 9/30/16 at 11:30 am to Kingpenm3
Deutsche Bank now up over $13 or ~13.5% today based on the rumored deal with the doj
Posted on 9/30/16 at 6:50 pm to Kingpenm3
To be honest, I haven't seen the summation of damages calculated for Deutsche Bank in detail anywhere. All I can really tell you is that the numbers the DOJ decides upon are highly political and arbitrary, and that it's often a game of chicken between the bank and the government as they haggle over what the final figure will be.
Legally speaking, the DOJ has the ability to raise the sums to such ludicrous levels due to opportunistic class action lawsuits that get filed for alleged "fraud" by counterparties in every mortgage or derivative transaction.
To give you an idea of how the calculations might proceed, take the $16.65 billion figure levied against BOA in 2014 as an example ( LINK):
Legally speaking, the DOJ has the ability to raise the sums to such ludicrous levels due to opportunistic class action lawsuits that get filed for alleged "fraud" by counterparties in every mortgage or derivative transaction.
To give you an idea of how the calculations might proceed, take the $16.65 billion figure levied against BOA in 2014 as an example ( LINK):
quote:
Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.
Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.
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