‘Will Deutsche Be the Next Lehman Brothers?’, Financial Column Asks
May 29, 2016 (EIRNS)—On May 24, Michael Snyder, writing for Seeking Alpha, raised in its headline the question, "Will Deutsche Bank Survive This Wave of Trouble Or Will It Be the Next Lehman Brothers?" Deutsche is a €1.69 trillion ($1.81 trillion) in assets bank, that has a derivatives exposure of between $55 to $70 trillion (the officially released figure is constantly changed), an amount that is more than 12 times the GDP of Germany.
On May 23, Moody’s rating service took the step of downgrading Deutsche. According to the Moody’s press release,
"Moody’s Investors Service has today downgraded the ratings of Deutsche Bank AG and affiliates, including the bank’s long-term deposit rating to A3 from A2, [and] its unsecured debt rating to Baa2 from Baa1."
In most cases, Deutsche’s debt is now just two grades above junk.
On the same day, Deutsche was compelled to report a €450 million ($500 million) charge that it took in 2015 for equity trading fraud (without disclosing further details; part of Deutsche’s €6.8 billion/$7.7 billion loss for 2015). On top of this, the May 23 Fortune magazine reports that the U.S. Securities and Exchange Commission is reportedly investigating the bank regarding the false pricing and reporting of mortgage backed securities.
The Seeking Alpha article on Deutsche Bank, which is reflected in parallel articles in Zero Hedge etc., is reflective of the fact that the entire Trans-Atlantic financial system is irredeemably, systemically bankrupt. It must be cancelled and replaced by a revolutionary new system vectored on Hamiltonian directed credit.
The danger for Deutsche Bank is that it has used so many frauds, that one cannot support the others, and any incident can cause its worthless derivatives contracts to unfold. The same is true of JP Morgan Chase, Royal Bank of Scotland, Goldman Sachs, and the $1.7 quadrillion derivatives market.