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Economic warning: Why everyone should be following Deutsche Bank

June 16, 2019
Wikimedia Commons
Jonathon Dunne

Contributor

Can you remember the economic crisis of 2008 and how you felt when the news broke that Lehman Brothers had collapsed? I have found an economic threat that everyone needs to be aware of, so you can prepare yourself in case we see another 2008 type collapse. I am going to present the evidence to you and I urge you to verify everything and to form your own opinion.

What is that threat?

It is a bank called Deutsche Bank. They are by far the most dominant bank in Germany which is the world's fourth-largest economy. In 2018 they had €2.08 Trillion worth of assets and the second-placed bank (DZ Bank) had €506 Billion worth of assets. To show you how dominant this bank is, they have more assets than the 2nd, 3rd, 4th, 5th and 6th sized banks combined.
When we review a business there are three key parts to analysis:

  • Market sentiment
  • Business numbers
  • Technical Analysis

Market Sentiment

Deutsche Bank has a long history of potential scandals including going all the way back to World War 2 and dealing in Nazi gold. Below are five recent stories which have increased the negative sentiment around Deutsche Bank.

  1. In 2007, they purchased a portfolio of loans worth $7.8 billion and purchased insurance from Warren Buffets Company. It was discovered they did not set aside enough capital to cover any potential losses. Over the course of the ten years, they lost $1.6 billion, and when they sold the loan they did not update their financial statements to include the big loss
  2. The Panama Papers are an ongoing investigation looking for many things including offshore tax havens. These investigations have resulted in several heads of state resigning including in Iceland and Pakistan. Last November, 170 police raided 6 different offices in Frankfurt looking for evidence of money laundering.
  3. Estonia is a small country in Eastern Europe. It has a population of 1.3 million people and a GDP of €26 billion. In January, it was discovered Deutsche Bank got involved with a Danish bank called Danke Bank and processed over $230 billion worth of cross country payments (including from Soviet Russia) through one bank in Estonia.
  4. There have been rumors of issues with Deutsche for a while now and one of the solutions put forth was a merger with a bank called CommerzBank. The leaders of both companies met and they even got support from politicians. In April, news broke that the merger talks had failed because over worries the risks and costs would be too great.
  5. Last week in France, Investment banking boss Garth Ritchie and others were arrested in France over illicit tax transactions.

Business Numbers

Deutsche Bank is already struggling as they are losing staff, losing market share, and bonuses are expected to be down at least 10% and further rounds of cost-cutting to come. Now imagine the impact if business costs start going up.

The banking industry works in a very simple way. They raise funds through large bonds at low-interest rates and then sell those funds to business and individuals thru products like loans and credit cards at a higher interest rate which results in a potential profit.

Earlier this year, Deutsche Bank tried raising money through several bonds. They paid 180bp (basis points) on a two-year bond and 230bp on a seven-year bond. Let me put this in context for you. There is a small bank in Spain called Caixabank which paid 225bp on a five-year bond and one of the larger banks in Spain, BBVA paid 130bp on a five-year bond.

  • How and why is a small bank in Spain getting a better deal on bonds than a huge bank in Germany?
  • Why is a large bank in Spain getting a bond 100bp cheaper than a German bank?
  • What does the market know that we do not?

Stock Price

Deutsche is also missing revenue projections which further hurt the business ability to survive and prosper. As you can imagine all of this news has a deep and lasting impact on its stock price which is in deep trouble. Before I share the stock price, I need to put this into the context of the market and the industry compared to the big economic crash of 2008. Below you will see a chart of some banking stocks from around the world with their peak price prior to the 2008 crash, the low of the 2008 recession and the price today:

As you can see from the above chart the banks in America have recovered from the 2008 recession by anywhere up 375% and JP Morgan has not only recovered its price in full but is constantly setting new high's. Ireland went bankrupt and had to be bailed out by the EU/IMF following the 2008 crash and even our national bank has more than doubled its price since 2008. The worst performing bank I could find was Societe Generale which has issues but is still hovering around its 2008 low price levels.

Now let's put that into the context of Deutsche Bank. Not only has the stock not rebounded but it is over 65% below its 2008 low at $6.75.

Technical Analysis

When you are dealing with the stock market, you also have people who study pricing through technical analysis. Experts look at things like FIB sequences, trend lines, and support levels. Support levels are a key metric for a stock failing because are looking to find where it will find support and potentially bounce higher.

We are very close to a key support level ($6.40) and if the price goes below this level, there is no saying exactly how low the price could go. At least one company expects Deutsche to fall below this support level, as several weeks ago UBS downgraded the stock to a sell order. This news was compounded last Friday when rating agency Fitch, downgraded their credit rating to BBB or two levels above JUNK status.

Other Information

I know you are likely reading this and thinking "this bank must have smart people in charge and surely they have a plan, right?" I am sure there is a plan and while they have kept their cards close to their chest, they have spoken in the past about the areas they foresee having growth for the company – they include business in Saudi Arabia, UAE, and Egypt. Do they strike you as countries which are stable and will offer steady and reliable growth? Do you have to think really hard to imagine how this could go potentially very wrong?

Questions

I believe there is at least a solid case Deutsche is in a LOT of trouble. So what are possible scenarios for the future? I will lay out the key questions below but I must stress that it's impossible to say for sure what exactly will happen. One of the key numbers to remember here is they have roughly €50 billion worth of derivatives.

  • How likely is it that the bank can turn things around and survive?
  • How likely is it the bank continues to run into trouble, its stock price fails and eventually fails?
  • If you think it is likely it will fail, the question becomes what will the fallout be? Who will be affected?
  • Will they be bailed out?
  • If so, by whom? The German government, ECB, IMF, the Federal Reserve?
  • What will the German government think? Some members recently spoke out saying they would block public money for the proposed merger? Will they block funds if it failed?
  • Will other banks be exposed and affected? Will they have to take losses?
  • Will those losses be spread around or will one or more bank be mainly affect?
  • Will this affect the sentiment of the banking sector and cause a panic?
  • If there are issues and it starts affecting the stock prices, what will be the impact on other industries?

Last Question

The last question revolves solely around the banks and the regulators? How secure are the other banks? We all hear about how banks are now put through "stress tests" but how much trust do you put in those results? How much trust do you have in the regulators?

I know this may make me sound like a conspiracy theorist to some but it's an honest question. The Fed is on public record saying they want to keep this economy strong as long as possible. If a bank did not perform strongly in a stress test or even barely failed one, do you think they would report it?

Can you imagine the pressure that body would come under to stay silent? Can you imagine the rhetoric they would face with questions like, "Are you really going to fail one bank? Do you know how many people will lose their jobs if you do that?" Am I saying this is happening? No, but can you really rule it out 100% as a possibility?

I urge you to ponder on these questions, do your own research and find YOUR answers.

Update: The most freaquently asked question I have received from this column / show is how much time do we have to prepare. This is an impossible question to answer, as it could fail tomorrow, next week or might be next year. However I want to provide you a potential date for your diary – July 24th. That is when Deutsche will release their next earnings report and if it comes in below expectations, it could cause a further drop in price casting more doubt over the future viability of the bank.

Please support Jonathon's weekly podcast which is exclusive to the Blaze Media and available for FREE. He offers a unique perspective by promoting America's Founding Principles and brings every issue back to a set of core principles which are always based around the laws of nature. You can find links to his show by clicking here or by searching for Freedoms Disciple on your favorite audio platform.

Empty house, heavy heart: A father’s realization after his kids move out

The silence of an empty home reminds me that life’s outcomes are out of my control — what matters is showing up.

My son moved out of the house this spring. My daughter moves out in a couple of weeks, and my older kids are headed up north. Now, it’s just Tania and me — and it’s been quiet. Too quiet.

As I sit here in a house full of space and silence, my mind has been meditating on the reality of being a dad — and what that really means.

As a father, I’ve learned that sometimes the most important thing is simply showing up and doing the best I can — even when I’m not sure what that looks like.

I didn’t grow up with the model of fatherhood that I now find myself trying to live out. My dad wasn’t present. He worked hard — harder than most people I’ve ever met — but he wasn’t there for me the way I needed him to be. My dad was passionate about his job, and that job was providing for the family. He taught me about hard work, but there wasn’t much emotional connection. We didn’t start developing any real relationship until I was 30.

I’m not complaining. That was just the reality. But such memories inevitably materialize as I reflect on my own experience as a father and try to navigate this new chapter in my life.When my kids were little, it was clear that I wasn’t home enough. And looking back, I knew that my work — this job — was costing me time with them. But we all talked about it as a family. When the opportunity to make this career change came in 2006, we discussed it openly because we knew it would change everything, for better or for worse. We made the decision as a team.

Now that they're moved out, I walk around in this big house filled with all this stuff, considering whether anything was worth it. In the end, it's just stuff. Everything in my home could be gone, and all I would miss are the kids.

The reality of fatherhood

Something I thought — and I think many others can relate — is that you think that your main job is to provide. You’re not needed in the same way mom is. You’re not the one the baby looks to in those early years. You watch your wife bond with the child, and you wonder where you fit in. It’s a strange feeling.

But as I’ve come to learn, you are needed in more ways than just a provider. You just don’t always get the immediate connection that mothers do.

A special season starts around age seven when dad becomes a little magical. You can feel it. The connection is there. It’s that sweet spot before the teenage years, when everything is awkward, when both dad and kid seem to be at odds. But in those years before, it’s golden.

Then, it all changes.

As kids hit the teen years, they start to pull away. The relationship with dad often becomes strained. They turn to mom when they need comfort, leaving dad in the background, unsure of where he stands. And that’s fine. That’s how it goes. But in this phase of life, as the kids start moving out and forging their own paths, I wish things were different.

I feel that loss deeply. As a father who wasn’t home all the time, I worked to provide. But now, I’m left with this ache in my chest, wondering, “Did I do enough?”

Releasing the outcome

The hardest part of fatherhood is when you stop expecting a certain outcome. My wife often tells me, “It’s going to happen. It will all work out.” And I believe her. But honestly, it’s hard not to be caught in the endless loop of second-guessing. Did I make the right decisions? Did I do enough? How can I fix this?

This struggle isn’t just about fatherhood. It’s about life. I’ve spent so much time looking ahead, planning, pointing to the horizon. I could always see the future and strive toward it. But in this season of life, I’m realizing that we also need to release our attachment to the outcome — whether it be over the injustices we see in the news cycle or the things we are wrestling with in our individual lives.

How strong fathers shatter a poisonous narrative about manhood one child at a time.Photo by Kelli McClintock via Unsplash

It doesn't mean we're not engaged. It just means we have to stop wanting a specific outcome. It’s a journey where the road is uncertain, and the destination might look different than what I expected.

I’ve always been someone who could picture the future and work relentlessly toward it. But it’s not just about getting to the destination — it’s about being present in the moment, doing the next right thing, and giving the end result to God.

Applying this to life

We live in a world obsessed with results, with winning, with reaching that end goal. But what if, just for a moment, we stopped obsessing over the outcome? What if we focused on doing the next right thing, one step at a time?

I don’t have all the answers. I’m still figuring it out. But what I do know is that there’s beauty in the process. There’s meaning in the moments, even if they don’t lead to the perfect outcome. As a father, I’ve learned that sometimes the most important thing is simply showing up and doing the best I can — even when I’m not sure what that looks like.

The house is quiet now, but the work isn’t over. There’s still plenty to do. And it’s time to focus on making each moment count.

This article originally appeared on TheBlaze.com.

The dangerous rise of foreign allegiances in Congress

ANDREW CABALLERO-REYNOLDS / Contributor, Jemal Countess / Stringer | Getty Images

The rise of dual loyalties in Congress is a dangerous trend. Rep. Ramirez's allegiance to Guatemala calls into question her commitment to America’s laws and sovereignty.

When an elected official swears an oath to uphold the Constitution and defend the United States, that pledge should mean something. But what happens when a member of Congress chooses to place her allegiance with another country over the United States? It’s a violation of that oath, plain and simple.

Rep. Delia Ramirez (D-Ill.), a sitting member of Congress, openly stated in Spanish during a political event in Mexico City, "I'm a proud Guatemalan before I'm an American."

If we don’t demand that our elected leaders place their loyalty to the United States above all else, then we risk the very foundation of this republic.

Ramirez didn’t have a casual slip of the tongue. Her statement was a declaration of her loyalty to another nation. And it’s not just her words that are troubling; her husband, according to Rolling Stone, is in the U.S. illegally. That’s a violation of our immigration laws — laws that Ramirez should be sworn to uphold.

Ramirez’s statement isn’t an isolated incident. This is part of a growing pattern where elected officials, like Rep. Ilhan Omar (D-Minn.), proudly identify with their country of origin before America. They claim cultural pride, but celebrating your heritage is distinctly different from putting your identity above the country that gives you the freedom and opportunity to express that identity.

Heritage vs. loyalty

I’m proud of my heritage, as many Americans are. My wife’s family is a great example. They’re Italian-Americans who are very proud of their roots. But they would never say they’re “Italian before American.” They are Americans who cherish their heritage.

This is what Theodore Roosevelt meant when he said, "There is no room in this country for hyphenated Americanism." This is not a swipe at immigrants. This is a call for unity under one flag, one national destiny. For too long, we’ve allowed dual loyalties to take root in the very institutions that are meant to protect our sovereignty. This is how nations crumble.

George Washington warned against foreign entanglements and divided loyalties in his Farewell Address. He understood the dangers of dual allegiances. He knew the republic couldn’t survive if its leaders pledged allegiance to foreign powers instead of the Constitution.

This isn’t about whether you love your country of origin. It’s about the fundamental principle of loyalty to the United States. You can’t serve in Congress, be part of the body that governs and protects America, if you’re more loyal to another country than to the sovereignty and integrity of the U.S.

National security at risk

This issue goes beyond politics. It goes to the very heart of our national identity. The growing influence of foreign allegiance among our elected officials poses a direct threat to national security. You can’t be trusted to defend America’s borders and enforce immigration laws if you’re willing to place another country above your sworn duty.

Anadolu / Contributor | Getty Images

Congress must hold these people accountable. Ramirez must be removed from any committees related to national security or immigration. She has shown that her loyalty lies elsewhere. Her position on the Homeland Security Committee is not only a conflict of interest, it’s a violation of the trust placed in her by the American people.

Her husband’s illegal status must be investigated thoroughly. If you or I were in the same situation, we’d be facing the consequences. There’s no reason why she and her family should be above the law.

Time to act

This issue is about loyalty, integrity, and national security. If we don’t demand that our elected leaders place their loyalty to the United States above all else, then we risk the very foundation of this republic. The time to act is now.

Will Congressional lawmakers listen to the American people and choose America, or will they continue to play politics with our sovereignty? We need to know, now more than ever, whom these leaders are really serving.

This article originally appeared on TheBlaze.com.

Horror on Park Avenue: Is America’s mental health crisis out of control?

New York Daily News / Contributor | Getty Images

The Park Avenue shooter wanted us to study his brain. But will we study our culture?

Late Monday afternoon in Midtown Manhattan, the summer heat clung to the glass and steel of Park Avenue, usually a quiet street save for the occasional honking horn or blaring siren. But as the sun dipped behind the towering skyscrapers, violence erupted.

A 27-year-old man, whose name I won't bother mentioning, stepped out of a black BMW he had double-parked near 51st and 52nd Streets. His movements were calm, deliberate. In his hands, he carried an AR-15 rifle. His target was 345 Park Avenue, a tower of wealth and power, housing the offices of Blackstone, the National Football League, and Rudin Management. The idea of chaos here, in this building, felt foreign — until it wasn’t.

If we don’t get back to the root causes of violence, we’re doomed to continue spiraling into chaos.

The shooter made his way into the building lobby, where he shot in the back 36-year-old New York City Police Officer Didarul Islam, whose wife was about to give birth to their third child. The gunman then gunned down a woman hiding behind a pillar, her life taken in an instant.

The footage shows him moving with a chilling calm, methodical and relentless. A guard behind a desk became his next victim. Then another man, an NFL employee, was shot and is still in critical condition.

The shooter made his way to the elevators, and, strangely, as one opened, a woman stepped out. He let her pass. Why? We’ll never know. But she will likely ask herself that question for the rest of her life.

He continued to the 33rd floor, where Rudin is located. There, in the quiet hum of fluorescent lights and the soft chatter of cubicles, he began “to walk the floor, firing as he traveled.” Another victim fell, another family destroyed.

And then, in a final act, he turned the rifle on himself.

NYPD Commissioner Jessica Tisch confirmed that the scene was contained. But the damage was done. Four people were dead: one officer, one security guard, and two civilians. Several more were wounded.

The root issue: Mental illness

As details emerged, we learned more about the gunman’s background. He had driven cross-country from Las Vegas to New York. By trade, he was a security guard at a Las Vegas casino, and he held a concealed carry permit. Yet his history of mental illness, coupled with a backpack full of ammunition, medication, and his clear intent, painted a grim picture.

We also learned that his real target was the NFL, not Rudin. The shooter, suffering from chronic traumatic encephalopathy, a neurodegenerative disease common in high-contact sports caused by repeated head collisions, blamed the NFL for his condition.

He had played football in his youth, but never at the professional level. His note, found on his body after he shot himself, said he wanted his brain studied, to contribute to the understanding of his condition.

This wasn’t just an ordinary act of violence; it was a tragic collision of a mentally unstable man and a gun.

A growing crisis

America is in the midst of an unprecedented mental health crisis. As I walk through cities like New York, I am confronted by the increasing number of unstable individuals teetering on the brink of violence. Not long ago, my wife and I were walking through Manhattan when a man on a bike circled us, looking me directly in the eye, saying, “I’m going to kill me a white man today. Today is the day.”

Michael M. Santiago / Staff | Getty Images

The man was clearly unhinged. Fortunately, he noticed the armed security behind us, and he quickly rode away. But what if they hadn’t been there? What if he had been someone who wasn’t aware of the people around him?

The world we live in today is one where violence is erupting in public spaces, fueled by mental illness, societal breakdown, and a lack of accountability — and it’s becoming a national trend. This isn’t just about guns or laws — it’s about what’s happening inside the minds of those who perpetrate these acts.

A wake-up call

It’s easy for people to point fingers. To blame social media, to blame the media itself, to call for more laws. But this crisis is about much more than that. It’s about a loss of morality, family, social cohesion, transcendent purpose, genuine human connection, and so much more that comes with a society whose values are rooted in God’s truth.

I’m not a mental health expert, but surely the degeneration of these social goods and the historic rise in mental disorders, especially among young people, are not coincidental. We can’t keep turning a blind eye to such things and pretend that new laws or more regulations will fix it.

This isn’t just about changing laws; it’s about changing hearts. If we don’t, we’ll keep losing those we hold dear.

This article originally appeared on TheBlaze.com.

The DARK truth behind the Macrons' absurd lawsuit

WPA Pool / Pool | Getty Images

While the media obsesses over elite scandals, Glenn is having a field day exposing the Macron lawsuit farce—and the twisted truth it tries to bury.

The era of unchecked narratives is coming to an end. We're reclaiming reality, one scandal at a time.

On his show, Glenn couldn't hide his glee over French President Emmanuel Macron and his wife Brigitte suing Candace Owens for claiming she's really a man named Jean-Michel Trogneux. Glenn called Brigitte the "Jeffrey Epstein of France" for grooming a 15-year-old Emmanuel when she was his 40-year-old teacher, and speculated that she is pressuring her husband to silence the rumors. Glenn also mocked the blatant overkill, which included childhood photos, birth announcements, and a desperate proclamation that Brigitte is "a woman."

But it goes deeper: The liberal elites have long proclaimed that transitioning is "wonderful," so why sue over the insinuation? It's hypocrisy—elites demanding silence on grooming while forcing conformity. This isn't about truth; it's control, proving no one's above scrutiny.

Want to see the absurd lawsuit firsthand? Download the Macron v. Owens lawsuit PDF here and see the evidence for yourself.

Download the PDF here.