Deutsche Bank toxic derivative losses

AG47

Thrugelmir wrote: »

RBS was in the same category as DB. Would have caused global financial distress on a major scale.

Lloyds shareholders paid the price for the shot gun marriage with HBOS not the taxpayer. If the PPI issue had been foreseen I suspect HBOS would have been nationalised. Would be in the same boat as RBS today. Slowly contracting in size back to it's regional roots as a bit player.

RBS didn't have tens of trillions in toxic derivative losses. It's nowhere near on the same scale.

DB used to be 8x Lehman now it's 12x and by he next quarter it could be 15x as big as the Lehman shock.

The big problem that nobody can answer is with derivatives there should always be a winner and a loser, but what if the loser has mounted up uch losses that the winner can't be paid? Then everybody loses.

And the losses and tens of trillions and going up at an exponential rate.

Thrugelmir

AG47 wrote: »

RBS didn't have tens of trillions in toxic derivative losses. It's nowhere near on the same scale.

RBS was the largest bank in the world at the time and owned the largest banking operations in 55 countries around the world. The implosion of the RBS group would have had a devastating financial impact. Let alone the damage to the reputation of the City of London. That why Brown and Darling hatched a plan to save the bank in 48 hours.

Thrugelmir

AG47 wrote: »

DB used to be 8x Lehman now it's 12x and by he next quarter it could be 15x as big as the Lehman shock.

Barclays are trading Lehmans UK books out at a profit. Not always as bad as it may seem.

AG47

Thrugelmir wrote: »

RBS was in the same category as DB. Would have caused global financial distress on a major scale.

Lloyds shareholders paid the price for the shot gun marriage with HBOS not the taxpayer. If the PPI issue had been foreseen I suspect HBOS would have been nationalised. Would be in the same boat as RBS today. Slowly contracting in size back to it's regional roots as a bit player.

RBS didn't have tens of trillions in toxic derivative losses. It's nowhere near on the same scale.

DB used to be 8x Lehman now it's 12x and by he next quarter it could be 15x as big as the Lehman shock.

The big problem that nobody can answer is with derivatives there should always be a winner and a loser, but what if the loser has mounted up uch losses that the winner can't be paid? Then everybody loses.

And the losses and tens of trillions and going up at an exponential rate.

AG47

Thrugelmir wrote: »

RBS was the largest bank in the world at the time and owned the largest banking operations in 55 countries around the world. The implosion of the RBS group would have had a devastating financial impact. Let alone the damage to the reputation of the City of London. That why Brown and Darling hatched a plan to save the bank in 48 hours.

Yes that was many billions, same as Lehman it was hundreds of billions in toxic losses.

This time, with DB and the Italian banks, and the Portuguese banks we are now talking about TRILLIANS IN TOXIC LOSSES.

AG47

I feel sorry for the Italian banking system, all the loses and now this earthquake, not looking good for Italy right now.

Thrugelmir

AG47 wrote: »

Yes that was many billions, same as Lehman it was hundreds of billions in toxic losses.

This time, with DB and the Italian banks, and the Portuguese banks we are now talking about TRILLIANS IN TOXIC LOSSES.

The music hasn't stopped yet. Until it does...........

AG47

Thrugelmir wrote: »

The music hasn't stopped yet. Until it does...........

I wonder if the music can still be playing when the toxic derivative losses are over a hundred trillion? And the losers can't pay the winners and everybody loses?

My question is, how on earth has the music not stopped yet?

theEnd

AG47 wrote: »

RBS didn't have tens of trillions in toxic derivative losses. It's nowhere near on the same scale.

DB used to be 8x Lehman now it's 12x and by he next quarter it could be 15x as big as the Lehman shock.

The big problem that nobody can answer is with derivatives there should always be a winner and a loser, but what if the loser has mounted up uch losses that the winner can't be paid? Then everybody loses.

And the losses and tens of trillions and going up at an exponential rate.

DB do not have tens of trillions of derivative losses.

They have exposure to derivatives where the sum of the notionals are in the trillions (they are not anywhere near the same thing).

Doesn't mean they're not in trouble.

Thrugelmir

AG47 wrote: »

I wonder if the music can still be playing when the toxic derivative losses are over a hundred trillion? And the losers can't pay the winners and everybody loses?

My question is, how on earth has the music not stopped yet?

Profits aren't booked until realised. So no one has lost anything. The ultimate loss when all the trades unwind will hit someones pocket but net down to a far far smaller figure.

Be a large number of redundancies in investment banks though. Which wouldn't go amiss anyway.

Meanwhile the Central Banks will continue to shore up the financial system.