Deutsche Bank toxic derivative losses

AG47

pop_gun wrote: »

Back in 07 very few people were talking about a market crash and those who did, were thought of as part of the tin foiled hat brigade.
The problems are even worse than they were during the 08 crash, yet many are acting as though everything is fine.

The stress test is the equivalent of putting a feather on the back of an elephant and seeing if it buckles under the additional weight. There's no mark to market. So an asset price is whatever the holder says it's worth. It's a wonder any bank fails those tests. But some do. Which leads me to believe there's an ulterior motive for why the stress tester said they did.

The $10trn could've been repackaged as CDOs and sold on. DB has an obligation, but doesn't realise the losses.
Hedge funds, banks and other financial institutions could hold all of that $10trn and the mainstream media would be none the wiser.

Excellent post Pop-gun

theEnd

pop_gun wrote: »

Back in 07 very few people were talking about a market crash and those who did, were thought of as part of the tin foiled hat brigade.
The problems are even worse than they were during the 08 crash, yet many are acting as though everything is fine.

The stress test is the equivalent of putting a feather on the back of an elephant and seeing if it buckles under the additional weight. There's no mark to market. So an asset price is whatever the holder says it's worth. It's a wonder any bank fails those tests. But some do. Which leads me to believe there's an ulterior motive for why the stress tester said they did.

The $10trn could've been repackaged as CDOs and sold on. DB has an obligation, but doesn't realise the losses.
Hedge funds, banks and other financial institutions could hold all of that $10trn and the mainstream media would be none the wiser.

The global CDO market is tiny. The premiums charged on them absolutely minute.

Are you really suggesting that DB have lost $10trn and can somehow hide it by selling CDOs.

I'm out. I give up.

Thrugelmir

pop_gun wrote: »

The stress test is the equivalent of putting a feather on the back of an elephant and seeing if it buckles under the additional weight.

The stress tests are progressively tightening the screw on the banks. Forcing the banks to reduce leverage and improve capital adequacy. While the job is far from complete. Far beyond what you are suggesting. More than one way to skin a cat.

pop_gun

theEnd wrote: »

The global CDO market is tiny. The premiums charged on them absolutely minute.

Are you really suggesting that DB have lost $10trn and can somehow hide it by selling CDOs.

I'm out. I give up.

When losing an argument, try not to lose your head as well.
You've, purposefully, misrepresent my last post, so as to justify your hissy fit.

DB hasn't lost anything because no one is calling in those losses. Think of it as a form of forbearance from those instititions DB is obligated to. Now those institutions could use that debt as CDOs and sell it to third parties. These CDOs could be further manipulated through rehypothecation.
There's any number of financial instruments the banks could use.
They dream half this stuff up and agree to play by the new practices.
There's a reason why it's called the shadow banking system.

If everything was above board would it be given that name?

Another thing, you say the Euro swaps used on Greek debt was an inconsequential amount. But you fail to see $10trn is just as insignificant to the derivatives market it's in.

AG47

pop_gun wrote: »

When losing an argument, try not to lose your head as well.
You've, purposefully, misrepresent my last post, so as to justify your hissy fit.

DB hasn't lost anything because no one is calling in those losses. Think of it as a form of forbearance from those instititions DB is obligated to. Now those institutions could use that debt as CDOs and sell it to third parties. These CDOs could be further manipulated through rehypothecation.
There's any number of financial instruments the banks could use.
They dream half this stuff up and agree to play by the new practices.
There's a reason why it's called the shadow banking system.

If everything was above board would it be given that name?

Another thing, you say the Euro swaps used on Greek debt was an inconsequential amount. But you fail to see $10trn is just as insignificant to the derivatives market it's in.

If everything was above board, they would not have to lay off tens of thousand of staff, and the people at the top would not be getting thrown out of windows, ahem sorry 'jump' backwards out of windows.

AG47

pop_gun wrote: »

Back in 07 very few people were talking about a market crash and those who did, were thought of as part of the tin foiled hat brigade.
The problems are even worse than they were during the 08 crash, yet many are acting as though everything is fine.

The stress test is the equivalent of putting a feather on the back of an elephant and seeing if it buckles under the additional weight. There's no mark to market. So an asset price is whatever the holder says it's worth. It's a wonder any bank fails those tests. But some do. Which leads me to believe there's an ulterior motive for why the stress tester said they did.

The $10trn could've been repackaged as CDOs and sold on. DB has an obligation, but doesn't realise the losses.
Hedge funds, banks and other financial institutions could hold all of that $10trn and the mainstream media would be none the wiser.

Reports are that the entire toxic derivative losses are in the region of €75. They lost bets on oil going down so much, then on Brexit they bet the wrong way, then they made huge bets on pounds sterling, and guess what it went against them.

AG47

ag47 wrote: »

reports are that the entire toxic derivative losses are in the region of €75. They lost bets on oil going down so much, then on brexit they bet the wrong way, then they made huge bets on pounds sterling, and guess what it went against them.

€75 trillion with a 't'

not billion with a 'b'

wotsthat

AG47 wrote: »

€75 trillion with a 't'

not billion with a 'b'

Their losses are of the order of planet Earth's GDP and they've managed to keep it on the QT?

AG47

wotsthat wrote: »

Their losses are of the order of planet Earth's GDP and they've managed to keep it on the QT?

That's what is so stupid about the derivatives WMDs, they outnumber the amount of currency units in existing supply. It's going to end very inflationary one way or another.

AG47

Why hasn't massive derivatives exposures at banks already led to disaster?


I recently heard that Deutsche Bank had $72trillion of "derivatives exposure", which is many times greater then the entire German GDP.

http://economics.stackexchange.com/questions/10649/why-hasnt-massive-derivatives-exposures-at-banks-already-led-to-disaster