Economic warning: Why everyone should be following Deutsche Bank

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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.

Glenn Beck: Adam Schiff is a LIAR — and we have the proof

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On the radio program Wednesday, Glenn Beck didn't hold back when discussing the latest in a long list of lies issued by House Intelligence Committee Chairman Adam Schiff (D-Calif.) during the Democrats' ongoing endeavor to remove President Donald Trump from office.

"I'm going to just come out and say, Adam Schiff is a liar. And he intentionally lied. And we have the proof. The media being his little lapdog, but I'll explain what's really going on, and call the man a liar to his face," Glenn asserted. "No, I'm not suggesting he's a liar. No, I'm telling you, he's a liar. ... Adam Schiff is a lying dirtbag."

A recent report in Politico claimed Schiff "mischaracterized" the content of a document sent to House Judiciary Chairman Jerry Nadler (D-N.Y.) as evidence against President Trump in the Senate impeachment trial. Read more on this here.

"Let me translate [for Politico]," Glenn said. "House Intelligence Chairman Adam Schiff lied about a text message exchange between two players in the Ukrainian saga. And we know it, because of the documents that were obtained by Politico."

A few of the other lies on Schiff's list include his repeated false claims that there was "significant evidence of collusion" between the Trump campaign and Russia leading up to the 2016 presidential election, his phony version of President Trump's phone call with the president of Ukraine, and his retracted claim that neither he nor his committee ever had contact with the Trump-Ukraine whistleblower. And the list just keeps getting longer.

Watch the video below for more details:

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On the radio program Tuesday, Glenn Beck and Stu Burguiere discussed recent reports that former Vice President Joe Biden's son, Hunter, wasn't the only family member to capitalize on his connections to land an unbelievably lucrative job even though he lacked qualifications or experience.

According to Peter Schweizer's new book, "Profiles in Corruption: Abuse of Power by America's Progressive Elite," Joe Biden's younger brother, Frank, enjoyed the benefit of $54 million in taxpayer loans during the Obama administration to try his hand at an international development venture.

A lawyer by training, Frank Biden teamed up with a developer named Craig Williamson to build a sprawling luxury resort in Costa Rica, which claimed to be on a mission to preserve the country's forests but actually resulted in the decimation of thousands of acres of wilderness.

The then-vice president's brother also reportedly earned hundreds of thousands of dollars as the front man of a for-profit charter school company called Mavericks in Education.

The charter schools, which focused on helping at-risk teens, eventually failed after allegations of mismanagement and a series of lawsuits derailed the dubious business venture.

Watch the video below to get Glenn's take on these latest revelations in the Biden family corruption saga:

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Ryan: Bernie at the disco

Photo by Sean Ryan

Saturday at El Malecón, we waited for the Democratic socialist. He had the wild white hair like a monk and the thick glasses and the booming voice full of hacks and no niceties.

Photo by Sean Ryan

The venue had been redecorated since we visited a few nights before when we chatted with Castro. It didn't even feel like the same place. No bouncy castle this time.

Photo by Sean Ryan

A black curtain blocked the stage, giving the room a much-needed depth.

Behind the podium, two rows of mostly young people, all holding Bernie signs, all so diverse and picturesque and strategic.

Photo by Sean Ryan

Lots of empty seats. Poor showing of Bernie fans for a Saturday afternoon. At one point, someone from Bernie's staff offered us seats in the audience, as if eager to fill up those seats however possible.

There were about 75 people in the dancehall, a place built for reunions and weddings and all those other festivities. But for a few hours on Saturday, August 10, 2019, it turned serious and wild for "Unidos Con Bernie."

Photo by Sean Ryan

People had been murmuring about Sanders' speech from the night before at Wing Ding. By all appearances, he had developed a raving lust to overthrow Trump. He had even promised, with his wife just out of view, that, were he elected, he'd end white nationalism in America. For good.

El Malecón lacked its previous air of celebration. It had undertaken a brooding yet defiant spirit. Media were sparse. Four cameras faced the podium. Three photographers, one of whom had been at nearly all the same events as us. A few of the staffers frowned at an empty row of chairs, because there weren't that many chairs to begin with.

At the entrance, Bernie staff handed out headsets that translated English to Spanish or Spanish to English, depending on who the speaker was. The translators stood behind the bar, 20 feet from the podium, and spoke into a lip-ribbon microphone.

Bernie's staff was probably the coolest, by far. As in, they looked cool and acted stylishly. Jeans. Sandals. Careworn blazers. Tattoos. One lad had a black Levi's shirt with lush crimson roses even though he wasn't a cowboy or a ranch-hand. Mustaches. Quirky hats. A plain green sundress. Some of them wore glasses, big clunking frames.

Photo by Sean Ryan

The outfits were distinctly Bernie. As Bernie as the tie-dyed "BERNIE" shirts for sale outside the club. Or later, at the Hilton, like a Grateful Dead cassette stand.

Immigration was the theme, and everyone in the audience bore some proof of a journey. Because America offers life, freedom, and hope.

Sanders' own father emigrated from Poland to America at 17, a high school dropout who could barely speak English. As a Jew, he'd faced religious persecution.

Within one generation, Bernie Sanders' father contributed to the highest stratum of American society. In one generation, near hopelessness had transformed into Democracy, his son a congressman with a serious chance at the presidency.

Photo by Sean Ryan

That's the beauty of America. Come here broken and empty and gutted and voiceless. And, within your lifetime, you can mend yourself then become a pillar of society. Then, your son can become the President of the United States of America!

Four people gave speeches before Sanders. They took their time, excited and nervous. They putzed. Because how often do you get to introduce a presidential frontrunner?

All the native English speakers jammed their earpieces when the woman with the kind and dark energy took the stage.

Photo by Sean Ryan

She mumbled in Spanish and did not look up and said that, when her parents died, she couldn't go home for the funeral. She fought back tears. She swallowed hard to shock herself calm. And the room engulfed each silence between every word.

It felt more like a therapy session than a political rally. A grueling therapy session at that. Was that what drew people to Bernie Sanders, that deep anguish? That brisk hope? Or, rather, the cessation of it, through Sanders? And, of course, the resultant freedom? Was it what gave Sanders a saintlike ability to lead people into the realm of the confessional? Did he have enough strength to lead a revolution?

Photo by Sean Ryan

While other frontrunners hocked out money for appearances, like the studio lights, Sanders spent money on translators and ear-pieces. The impression I got was that he would gladly speak anywhere. To anyone. He had the transitory energy you can capture in the writings of Gandhi.

Photo by Sean Ryan

I'm not saying he's right or wrong — I will never make that claim, about any of the candidates, because that's not the point of this, not the point of journalism, amen — what I'm saying is he has the brutal energy of someone who can take the subway after a soiree or rant about life by a tractor or chuck it up with Sarah Silverman, surrounded wherever he goes.

Without the slightest fanfare, Sanders emerged from behind the black curtain. The woman at the podium gasped a little. The room suctioned forward when he entered. In part because he was so nonchalant. And, again. That magnetism to a room when a famous or powerful or charming person enters. Not many people have it. Not many can keep it. Even fewer know how to brace it, to cull it on demand. But several of the candidates did. One or two even had something greater.

Photo by Sean Ryan

I'll only say that Bernie had it with a bohemian fervor, like he was a monk stranded in a big city that he slowly brings to God.

"We have a President who, for the first time in my lifetime, who is a President who is a racist," he shouted. "Who is a xenophobe and anti-immigrant. Who is a sexist. Who is a religious bigot. And who, is a homophobe. And, what is very disappointing is that, when we have a President, we do not necessarily expect to agree with him, or her, on every issue. But we do believe that one of the obligations is to bring people to-geth-ah. As Americans."

Photo by Sean Ryan

After listening silently for several minutes, the audience clapped. Their sweet response felt cultish. But, then again, what doesn't feel cultish these days? So this was cultish like memes are cultish, in a striving-to-understand kind of way.

"The essence of our campaign is in fact to bring people together," he said. "Whether they're black, or white, or latino, or Native American, or Asian-American. We understand that we are Americans."

At times, this meant sharing a common humanity. Others, it had a slightly more disruptive feel. Which worked. Sometimes all we want is revolution. To be wild without recourse. To overthrow. To pass through the constraints of each day. To survive. The kind of rowdy stuff that makes for good poetry but destroys credit lines. Sanders radiated with this intensity, like a reclusive philosopher returning to society, from his cave to homes and beds and fences and maybe electricity.

Photo by Sean Ryan

But, as he says, his revolution would involve healthcare and wages and tuition, not beheadings and purges and starvation.

Seeing the Presidential candidates improvise was amazing. They did it constantly. They would turn any of their beliefs into a universal statement. And Sanders did this without trying. So he avoided doing the unbearably arrogant thing of pretending to speak like a native Guatemalan, and he looked at the group of people, and he mumbled in his cloudy accent:

"My Spanish — is not so good."

Photo by Sean Ryan

This is the same and the opposite of President Trump's Everyman way of speaking English like an American. Of speaking American.

Often, you know what Sanders will say next. You can feel it. And, anytime this happened, it brought comfort to the room.

Like, it surprised no one when he said that he would reinstate DACA on his first day in office. It still drew applause.

But other times, he expressed wild ideas with poetic clarity. And his conclusions arrived at unusual junctures. Not just in comparison to Republicans. To all of them. Bernie was the Tupac of the 2020 election. And, to him, President Trump was Suge Knight, the evil force behind it all.

"Donald Trump is an idiot," he shouted.

Photo by Sean Ryan

Everybody loved that. Everybody clapped and whooped and some even whistled like they were outside and not in a linoleum-floor dancehall.

"Go get 'em, Bernie," someone in the back shouted.

This was the only Sanders appearance with no protestors.

"Let me say this about the border," he shouted. And everybody listened to every thunking syllable. He probably could have spoken without a mic. Booming voice. Loud and clear. Huddling into that heavy Vermont slug accent.

They'll say many many things about Bernie. One being, you never had to lean forward to hear him. In person, even more so. He's less frail. More dynamic.

Photo by Sean Ryan

Despite the shoddiness of the venue, there was a sign language interpreter. Most of the rallies had a designated interpreter.

"If you work 40 hours a week you shouldn't be living in poverty," he shouted, provoking chants and applause from the audience, as if he were talking about them. Maybe he was.

An anecdote about the people at an emergency food shelf blended into the livable wage of $15 an hour. He shifted into his spiel about tuition-free college and pointed at the audience, "You're not doing well," then at the kids behind him, "they are." He craned his head sideways and back. "Do your homework," he told said.

Laughter.

Half of the kids looked like they hadn't eaten in days. Maybe it was their unusual situation, a few feet from Bernie Sanders at a stucco community center.

Before the room could settle, Sanders wove through a plan for how to cancel debt.

Did he have a solution?

Tax Wall Street, he shouted.

Photo by Sean Ryan

And he made it sound easy. "Uno dos trey," he said. "That's my Spanish for today."

A serious man, he shoved through his speech like a tank hurtling into dense jungle. He avoided many of the typical politician gimmicks. Proof that he did not practice every expression in front of a mirror. That he did not hide his accent. That he did not preen his hair. That he did not smile for a precise amount of time, depending on the audience. That he did not pretend to laugh.

Photo by Sean Ryan

He laughed when humor overtook him. But it was genuine. With none of the throaty recoil you hear in forced laughter.

"I want everyone to take a deep breath," he said. And a palpable lightness spread through the room, because a deep breath can solve a lot of problems.

Photo by Sean Ryan

Then he roused some more. "Healthcare is a human right," he shouted. "A human privilege," he shouted. He told them that he lives 50 miles from the Canadian border in Burlington, Vermont, and healthcare works better up north.

Each candidate had a bad word, and Sanders' was "corporate."

Photo by Sean Ryan

At every speech, he mentioned "corporate media" with the same distrust and unpleasantness that conservatives derive from the term "mainstream media." Another would be "fake news," as popularized by Sanders' sworn enemy. Either way it's the same media. Just different motivations that irk different people.

But the discrepancies varied. Meaning two opposing political movements disliked the same thing, but for opposite reasons.
It sounded odd, Sanders' accusation that the media were against him. The media love Bernie. I can confirm this both anecdotally and judiciously. Yes, okay, in 2016, the media appeared to have sided with Hillary Clinton. As a result, Sanders was publicly humiliated. Because Clinton took a mafioso approach to dealing with opponents, and Sanders was her only roadblock.

Imagine if a major political organization devoted part of each day to agitating your downfall. And then you fail. And who's fault is it?

Sanders wanted to know: those negative ads targeting him, who paid for them?

Photo by Sean Ryan

Corporations, of course. Corporations that hated radicals like him. And really was he so radical? He listed off the possibilities: Big pharma, insurance companies, oil companies.

Because he had become a revolutionary, to them. To many.

He said it with certainty, although he often didn't have to say it at all. This spirit of rebellion had become his brand. He would lead the wild Americans into a utopia.

But just as quickly, he would attack. Trump, as always, was the target.

He called Trump the worst president in American history.

"The fates are Yuge," he shouted.

The speech ended as informally as it had begun. And Sanders' trance over the audience evaporated, replaced by that suction energy. Everyone rushed closer and closer to the man as Neil Young's "Keep on Rockin in the Free World" blared. Sanders leaned into the podium and said, "If anyone wants to form a line, we can do some selfies."

Photo by Sean Ryan

It was like meeting Jesus for some of the people.

There he was, at El Malecón. No stage lights, no makeup, no stylist behind the curtain. Just him and his ideas and his erratic hand commotion.

Then a man holding a baby leaned in for a photo. He and Sanders chatted. And, I kid you not, the whole time the baby is staring at Bernie Sanders like he's the image of God, looking right up at him, with this glow, this understanding.

Bernie, if you're reading this, I'd like to suggest that — if this election doesn't work for you — you could be the next Pope.

New installments come Mondays and Thursdays. Check out my Twitter. Email me at kryan@blazemedia.com

On the "Glenn Beck Radio Program" Monday, Harvard Law professor and lawyer on President Donald Trump's impeachment defense team Alan Dershowitz explains the history of impeachment and its process, why the framers did not include abuse of power as criteria for a Constitutional impeachment, why the Democrats are framing their case the way they are, and what to look for in the upcoming Senate trial.

Dershowitz argued that "abuse of power" -- one of two articles of impeachment against Trump approved by House Democrats last month -- is not an impeachable act.

"There are two articles of impeachment. The second is 'obstruction of Congress.' That's just a false accusation," said Dershowitz. "But they also charge him, in the Ukraine matter, with abuse of power. But abuse of power was discussed by the framers (of the U.S. Constitution) ... the framers refused to include abuse of power because it was too broad, too open-ended.

"In the words of James Madison, the father of our Constitution, it would lead presidents to serve at the will of Congress. And that's exactly what the framers didn't want, which is why they were very specific and said a president can be impeached only for treason, bribery, or other high crimes and misdemeanors," he added.

"What's alleged against President Trump is not criminal," added Dershowitz. "If they had criminal issues to allege, you can be sure they would have done it. If they could establish bribery or treason, they would have done it already. But they didn't do it. They instead used this concept of abuse of power, which is so broad and general ... any president could be charged with it."

Watch the video below to hear more details:



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