Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
US Overdosing on Debt - 19th Mar 19 -
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Deutsche Bank Could Be the Demise of Germany

Stock-Markets / Financial Crisis 2016 Oct 04, 2016 - 02:43 PM GMT

By: Harry_Dent

Stock-Markets The first bad news broke following the third quarter of 2015. Deutsche Bank reported a loss of $7 billion. The news just keeps coming with low or negative earnings thanks to bad loans in Germany and abroad.

In my February 19, 2016 edition of The Leading Edge, I issued a clear and stern warning about Deutsche Bank and about a second banking crisis looming. I explicitly said…


The Telegraph ran an article yesterday asking if Deutsche was the next Lehman. Is there an echo in the room?

Without a doubt, things are coming to a head at the bank. It's heavily exposed to the fracking industry in the U.S., which is sure to see continued rising defaults ahead. It has the largest derivatives exposure of any bank, at $54.7 trillion (and that's not a typo) out of the worldwide total of $550 trillion. And now, the U.S. Justice Department is slapping on a $14 billion fine for fraud in mortgage security sales.

Deutsche's market value is now only $16 billion. How can it afford to raise capital to pay this fine or to cover future large losses?

Even worse, the hard line that Merkel has taken against bailing out Italian banks (requiring bail-ins by larger depositors instead) has forced her into declaring that there can be no bail-out or assistance for Deutsche Bank, either.

She's obviously between a rock and a hard place. If she helps bail out Deutsche it would damage the euro. If she doesn't it could take the country down, and her along with it.

Evidence keeps mounting that Deutsche Bank could very well be the riskiest bank in the world (something I've been saying for months now).

The table below shows that Deutsche only has capital that is 2.68% of its assets - the worst of all major global banks. A healthy bank requires a level of 10% or more.

So much for how well capitalized the banks are after 2008!

The best bank of this risky bunch is Wells Fargo, with capital that is 8.01% of its assets. But it faces fraud problems of its own.

The riskiest top seven banks are all in Europe.

Unsurprisingly, Deutsche Bank's stock dropped another 6% on Monday, when Merkel declined aid. That puts it down 92% from its 2007, all-time high and 66% since August 2015!

How is it possible that Deutsche Bank - and most global banks for that matter - have seen stock prices decline massively in the last year, while the broader stock markets keep edging up?

Quite frankly, it isn't!

If the U.S. large-cap markets haven't already topped in early September, I say they'll do so before year-end… most likely in early December when the Fed comes back up against raising rates or losing all credibility.

And by then, Italy's 18% (and rising) non-performing loans and Deutsche Bank's $14 billion fraud fine will likely have come to a head.

Deutsche Bank and Italy look to be the most likely triggers for the next crash - one that will be far worse than the subprime crisis in the U.S. in 2008.

It won't be hard to bring down Germany given it has the worst demographic trends in the world into 2022! All we need is a trigger to reveal the underlying weakness created by the greatest debt bubble in history and the most irresponsible monetary policies ever, and this house of cards will collapse.

It looks to me like the fuse is lit…

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2016 Harry Dent- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules