If you have been waiting for “the next Lehman Brothers moment” which will cause the global financial system to descend into a state of mass panic, you might want to keep a close eye on German banking giant Deutsche Bank. It is approximately three times larger than Lehman Brothers was, and if the most important bank in the strongest economy in Europe were to implode, it would instantly send shockwaves rippling across the entire planet. Those that follow my work regularly know that I started sounding the alarm about Deutsche Bank beginning last September. Since that time, the bad news from Deutsche Bank has not stopped pouring in. They announced a loss of 6.8 billion euros for 2015, Moody’s just downgraded their debt to two levels above junk status, and they have been plagued by scandal after scandal. In recent months they have gotten into trouble for trying to rig precious metal prices, for committing “equity trading fraud” and for their dealings in mortgage-backed securities. The following comes from Zero Hedge…
A month after admitting to rigging precious metals markets, Deutsche Bank has been hit with a double-whammy of more alleged fraudulent behavior today and the stock is sliding. First, Reuters reports that the bank took a charge of 450 million euros for “equity trading fraud,” and then Bloomberg reports that The SEC is looking into Deutsche’s post-crisis mortgage positions.
This is a bank that is steadily bleeding money, and so the last thing that it needs is for government agencies to be putting immense pressure on it. Unfortunately for Deutsche Bank, the SEC seems determined to kick it while it is down…
Troubled Wall Street giant Deutsche Bank is under another investigation, this time by the Securities and Exchange Commission regarding the pricing and reporting of certain mortgage-backed securities.
The SEC wants to know whether the Frankfurt, Germany-based bank artificially raised the value of mortgage-backed securities in 2013 and later hid those losses for an extended period of time, Bloomberg first reported, citing people familiar with the matter.
But even if there were no scandals and no government investigations, the truth is that Deutsche Bank would be a deeply troubled bank anyway.
At one point, it was estimated that Deutsche Bank had 64 trillion dollars worth of exposure to derivatives contracts. That is an amount of money that is approximately 16 times the size of the GDP of the entire nation of Germany.
So nobody wants to see Deutsche Bank fail. It would be a financial disaster unlike anything the world has ever experienced before.
But right now things are not looking good. As you can see from this chart, the steady decline of Deutsche Bank’s stock price is eerily similar to what happened to Lehman Brothers during the months leading up to the time when it finally completely collapsed…
Deutsche Bank Lehman Brothers – Zero Hedge
Earlier this year, Deutsche Bank’s stock price set a new record low, and since that time it has been hovering just above that record low.
Clearly it is no secret that Deutsche Bank is having big problems, and the outlook for the immediate future is not good. I included the following quote from Berenberg analyst James Chappell in a previous article, but I think that it bears repeating…
Too many problems still: The biggest problem is that DBK has too much leverage. On our measures, we believe DBK is still over 40x levered. DBK can either reduce assets or increase capital to rectify this. On the first path, the markets do not exist in the size nor pricing to enable it to follow this route. Going down the second path also seems impossible at the moment, as the profitability of the core business is under pressure. Seeking outside capital is also likely to be difficult as management would likely find it hard to offer any type of return on new capital invested.
In the end, I believe that Deutsche Bank will ultimately implode, but it won’t be the only one.
Meanwhile, we just got some more very disturbing news out of Asia. According to Bloomberg, Japanese exports have now fallen for seven months in a row…
Japan’s exports fell for a seventh consecutive month in April as the yen strengthened, underscoring the growing challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth.
Overseas shipments declined 10.1 percent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 percent drop. Imports fell 23.3 percent, leaving a trade surplus of 823.5 billion yen ($7.5 billion), the highest since March 2010.
When your imports are 23 percent lower than they were a year earlier, that is a clear sign that consumer demand is way, way down and that your economy is in the process of imploding.
So I will repeat what I have said a number of times before…
Watch Germany and watch Japan.
I believe that they are going to be two of the biggest stories as this new global financial crisis begins to play out.
Author: Michael Snyder
Michael Snyder is a former Washington D.C. attorney who now publishes The Economic Collapse Blog and End of the American Dream. Michael and his wife Meranda believe that God is raising up a Remnant in these last days (Revelation 12:17; Revelation 14:12) that will bring in the greatest move of God the world has ever seen and the greatest harvest of souls the world has ever seen.
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Only thumbs up for you Michael ! Lines up with what David Wilkerson has stated.
Michael–love your zeal and passion for what the Lord has you share. You have been a guest in our living room many mornings on the Jim Bakker Show. You get a lot said in a period of time and speak in a language that I can understand.
Will be buying your new book, “The Rapture Verdict” and reading it to our Pastor. When do you think we might see the dreaded “Bail-Ins”? After Memorial Day?
Hello Brother Snyder;
My next door neighbor is a conductor who works for Burlington Northern Railroad up here in Northwest Montana. He has been laid off for many months and recently told me it looks like he may NEVER return to work; as only those with much seniority above him have any hopes of future employment with B.N. due to many factors such as coal, lumber, and oil production etc..
i make no claims of having any savvy in the financial sector, and I don’t know for sure what’s ahead for the world; but I DO know where MY provision will come from!
Matthew 6:31-33 Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed? 32 (For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things. :33 But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.
What a wonderful peace to know we are in his hands, and that although there is persecution, trials, and tribulation coming our way, we can trust him to always be faithful to his Holy Word.
Congratulations again on your enlightening and informative new book “The Rapture Verdict”. Anyone who could read it and still cling to the notion of a pre-trib rapture would have to be dangerously hardened against the voice of God’s Spirit.
Excellent job Michael!
Blessings;
Paul
http://www.paulbenson.me
I enjoy reading Michael Snyder’s, “End of the American Dream”. Where David Wilkerson said in his 1992 prophecy, ” Indeed, if America rejects God’s call to turn back to Him, we’ll face the same judgments Israel faced.”, God has also led me to understand the same. God Bless
Michael, great article. I am short on DB and several other large banks. thankyou for sounding the alarm and helping others see things more clearly. God bless you and your wife.
Ed or James or anyone: Are you buying put options on DB or is there an ETF that tracks inverse to DB stock? I didn’t see DB in FAZ that tracks the Russell 1000 index. What are some other ways to short DB and BOA? Thx
I avoided Deutsche Bank puts because the prices are already jacked up way too high to get decent leverage. I bought BAC puts very cheap. You can get them right now for about 2 cents per share.
Ole,
I have put on DB July 15 for strike at 55.
Right now they are cheap. But I think July might be too early some seem to think sept. When the markets go down on this first slide. I think these will go up. Then I will sell and buy back when the market starts going up again for sept. I also have BAC for July at $11. Same advice on that one. I hope this has helped. The banks have gone opposite of what I thought the timing would be. Just last week I was up almost 50% should have sold. Now I’m down about 60%.
Thx Ed.
Thx.
I’m looking at these:
BAC, Bank of America Corp;
DB, Deutsche Bank;
JPM, JP Morgan Chase
Ole those are the three I have. I bought a few more today . BAC is only .03 cents. JPM is about .22 and JPM is .25 that’s about half what they were last week.
http://www.zerohedge.com/news/2016-06-03/deutsche-bank-atms-block-cash-withdrawal-due-technical-glitch
Michael I just watched your powerful message on the Jim Baker show this morning.
can anyone find more credible source of info : paris is currently under chaos
https://www.superstation95.com/index.php/world/1369
Amen Paul Morgan;
Brother Wilkerson was a true man of God if there ever was one. I love his vision of the end-time Church. I have it posted on my site if you would like to read it. It’s called The Last Revival; and it is an awesome word!
http://www.paulbenson.me/prophetic-words1.html
Blessings
Paul
Is something pointing to this date, today May 25th?
As I stated on another thread, this is the 1-2-3 financial implosion prophecy by David Wilkerson…
Germany…Japan…USA
Thanks, Michael. I always like reading your articles.
Wayne, actually, if you listen to multiple Wilkerson messages on the economy and read his books, it looks like the sequence is roughly:
1. Germany
2. Japan + at about the same time, at least one large South American country along with Mexico
3. The U.S.
What Wilkerson has said also is that as SOON as Germany falls, immediately get your money out of paper and, I believe, into physical goods (metals, food, etc.) He said a lot of Americans will falsely believe that the U.S. will be able to withstand the fall of the first European country (which in an audio message he identifies as Germany). Wrong. He said this will be the beginning of what he calls “economic confusion.”
Frank,
I remember listening to audio recordings of David Wilkerson. I haven’t read any of his books, but I’m sure they would be interesting.
Thanks
Read “The Vision.” Wilkerson talks all about the coming economic collapse, along with other prophetic events the Lord showed him would happen in the future.