Deutsche Bank toxic derivative losses

merlingrey

Thrugelmir wrote: »

Good piece yesterday.

Deutsche Bank: World's most dangerous bank?



http://www.bbc.co.uk/news/business-36723034

Yep, that's the power of derivatives, you only need them things to go the wrong way by 5% and everything is wiped out.

I'm not sure i understand how it all works but i think of it like a roulette table where the punter has chips cover every number except for one so they are gaining from every spin. And basically the banking system failed last time because the ball landed on the one number they didn't have covered so all the chips down get raked back but at that point they put their whole bankroll on the table.

Thrugelmir

merlingrey wrote: »

I'm not sure i understand how it all works but i think of it like a roulette table where the punter has chips cover every number except for one so they are gaining from every spin. And basically the banking system failed last time because the ball landed on the one number they didn't have covered so all the chips down get raked back but at that point they put their whole bankroll on the table.

Like the days of when the hedge funds employed rocket scientists to compute complex trading algorithms. Everything was rosy until the ball one day landed in zero. No one had thought of the unthinkable.

AG47

They arrested another hsbc banker who was in on the fraud yesterday

How long before the banking system is taken down because of all this

mwpt

AG47 wrote: »

They arrested another hsbc banker who was in on the fraud yesterday

How long before the banking system is taken down because of all this

What do you mean "taken down"?

The-Joker

merlingrey wrote: »

Yep, that's the power of derivatives, you only need them things to go the wrong way by 5% and everything is wiped out.

I'm not sure i understand how it all works but i think of it like a roulette table where the punter has chips cover every number except for one so they are gaining from every spin. And basically the banking system failed last time because the ball landed on the one number they didn't have covered so all the chips down get raked back but at that point they put their whole bankroll on the table.

nobody understands how it all works.

But it doesn't take much to understand that when one domino falls it knocks over a larger one and a larger one and so on........

Thrugelmir

The-Joker wrote: »

nobody understands how it all works.

But it doesn't take much to understand that when one domino falls it knocks over a larger one and a larger one and so on........

The game is wind down mode with dominoes being removed. Whose going to be left with some at the end of the game.

sann420

DEUTSCHE BANK IS TOO BIG TO FAIL THEREFORE IT WOULDNT BE ALLOWED TO. MARK MY WORDS IT WILL NOT FAIL LIKE LEHMAN.

There might actually be a time when DB stocks become good value investment

Thrugelmir

sann420 wrote: »

DEUTSCHE BANK IS TOO BIG TO FAIL THEREFORE IT WOULDNT BE ALLOWED TO. MARK MY WORDS IT WILL NOT FAIL LIKE LEHMAN.

There might actually be a time when DB stocks become good value investment

Or like RBS it simply withers on the vine as it contracts in size to become a bit part player again.

System

New Banking Regulations + Financial Crisis (derivatives ???) = Sovereign Debt Crisis

System

https://www.armstrongeconomics.com/world-news/taxes/german-pension-crisis-the-same-as-japan-usa/

The Pension Crisis continues to spiral out of control and the central banks are incapable to reversing their policy. Raising rates now will cause budgets to explode and all the bonds they bought would collapse in price no less become totally unsalable. Now in Germany, the Bundesbank has addressed this crisis advising that the population must now work long term before receiving a pension and they must endure significantly higher pension contributions. In its monthly report published this week, the German central bank recommended increasing the retirement age to 69 years until 2060. They bluntly said that the federal government should not hide the fact that “further adjustments are inevitable.”

They pointed out that the projections until 2030 for pensions were based on calculations from the year 1989 when interest rates were substantially higher. The pension projections were never extended beyond that 2030 calculation. Currently, the retirement age will be gradually increased from 65 to 67 years. The projections of the federal government by 2030 will also limit the pension contribution to a maximum of 22% of gross earnings of workers. The Bundesbank says that this will need to rise significantly. They further point out the because of rising life expectancy and the low birth rate in the long term, the system will not be sustainable at current levels. The Bundesbank has stated the retirement age must rise to 69 and the current contribution of 18.7% must rise to 22% minimum.

Welcome to the collapse in socialism. Government is great and promising everything, and incapable of managing anything.