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.

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Following the U.S. Supreme Court's decision to overturn Roe v. Wade, a transgender activist called for a "Supreme Court Assassination Challenge" on Twitter, according to screenshots captured of the now-deleted tweet.

Activist Eli Erlick, a founding member of Trans Student Educational Resources (TSER) and creator of the controversial "gender identity" teaching tool for children called the "Gender Unicorn," tweeted and later deleted the disturbing remark on Friday, according to the Washington Free Beacon.

Sen. Marsha Blackburn (R-TN) also caught a screenshot of the tweet before it was deleted.

"The unhinged radical left is calling for the assassination of our Supreme Court Justices. That's not the way to disagree with a decision in America. It is unacceptable, and Biden’s DOJ must immediately act," Blackburn responded on Twitter.

Erlich then tried to play off her call to assassinate Supreme Court justices as a hilarious joke only Gen Z and Millennials would understand, apparently not understanding the seriousness of the attempted assassination of Supreme Court Justice Brett Kavanaugh just three weeks ago.

Erlick isn't the only Left-winger to make incendiary calls since the Supreme Court's Roe v. Wade decision. Here are just a few examples:

  • Rep. Maxine Waters (D-Calif.) called on people to “defy" the Supreme Court.
  • Rep. Alexandria Ocasio-Cortez (D-N.Y.) called for people to get “into the streets” alongside radical communist leader who wants to 'overthrow' the American system.
  • Chicago Mayor Lori Lightfoot (D) yelled "F*** Clarence Thomas" on a public stage for all to see and hear.
  • House Speaker Nancy Pelosi (D-Calif.) suggested that Supreme Court Justices Neil Gorsuch and Brett Kavanaugh lied to Congress.
  • And of course, "TheView" host Whoopi Goldberg issued a disgusting racist threat toward Supreme Court Justice Clarence Thomas.
Filling in for Glenn Beck on the radio program, BlazeTV hosts Pat Gray and Stu Burguiere took a look at these and other stunning examples of leftist lunacy over the Supreme Court's decision to overturn Roe v. Wade.
Watch the video clip below. Can't watch? Download the podcast here.

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Many members of the far-left already are calling for a ‘Night of Rage’ after the Supreme Court’s 6-3 decision to overturn Roe v. Wade, and the White House has been discussing plans to defy the ruling too. In fact, one idea floated by Biden Administration officials, according to the New York Times, includes providing abortions on military bases. So, will America experience another summer of riots? Are YOUR taxpayer dollars at risk? And what does this mean for deep-blue states? Josh Hammer, legal expert and opinion editor for Newsweek, joins Glenn to discuss what may come next...

Transcript

Below is a rush transcript that may contain errors

GLENN: Josh Hammer, he's the opinion editor of Newsweek. He's the host of the Josh Hammer show. He is really quite brilliant. One of the leading minds in the conservative movement, I think. Josh Hammer joins us now.

To tell us, what did you find in this decision?

JOSH: Glenn, great to be back with you, on such a momentous, and really such an emotional day, honestly. So, you know, look, as you said, this dropped recently. Funny enough, I was in the middle of getting a guest lecture from an organization on the advisory board as to when it drops. So I barely had any time to kind of skim through, let alone guess the concerning dissenting opinions. But it looks like this looks very similar, to the draft opinion that was leaked, by the Politico story, a month and a half ago, in early May. And I think those of us who were praying that the five justices from this leaked draft opinion, would have the fortitude to stiffen their spines against this unprecedented assault. Now knows that our prayers were answered, Glenn. That's really my takeaway right now.

This looks a lot like the leaked opinion. Justice Thomas and Justice Kavanaugh have some reconcurring opinions.

But unbelievable. And really just holding aside the constitutional law stuff for a second hear. Just speaking as pro-lifers, on a day like today, I think we really just need to pause. And I tweeted this out earlier. We need to just be grateful for our half century of pro-life activist forbearers. You know, this -- Glenn, this issue could have gone away after 1973. That was a long time ago. 1973. I mean, this issue could have just gone away. We owe a tremendous debt of gratitude to the pro-life moral activist. Political activist. And, of course, yes. Legal activist. Who fought day in and day out, that makes sure this great injustice stayed front and center of our national, political conscience. And in many days, the culmination of a half century of fighting for truth and justice. But in many ways, it's also a new beginning for the pro-life fight as well, interestingly.

STU: How do you mean a new beginning for the fight? I just it's going to turn, I think we're going to see abortion turn even darker in those states that allow it. Is that -- is that what you're meaning by this?

JOSH: Well, look, for a half century now, Roe vs. Wade, and its project any, specifically, the Planned Parenthood versus Casey case of 1992.

They took away from the states obviously. They arrogated authority away from the states, the ability to attempt to nationally codify one view of the morality of abortion.

It happened to be a profoundly immoral view. So these -- the fight now shifts to the states. And the pro-life activists. And all the 50 states. Especially, obviously in red states. Purple states. I mean, admittedly some blue states like New York and California, probably won't be able to touch them there.

But we have to make sure that our side is well positioned in the state Capitols for every red, purplish, probably even light blue state, to make sure we fight for successful, cogent, and morally consistent pro-life legislation. The state of Oklahoma, actually, just north of Texas. Right where you are now, Glenn. They have been leading on this actually. Governor Kevin Stitt signed into law, a fantastic pro-life bill there in Oklahoma. A few weeks ago. Maybe a month ago or so at this point, that basically just bans abortion straightforward from conception. And there are some -- you know, obviously, likable the mother. So forth. But we really need to start thinking about trying to craft legislation now, at the state level. But to your point, I do fear that the blue states will only double down in their radicalism. Unfortunately within that will only lead to an ever greater divide, in our country, that we have today. But obviously, at the end of the day. We're going to save at the end of the day, millions and millions of unborn children. We are going to save human beings who can grow up to cure cancer, who can win Nobel prices.

I mean, this is just a tremendous win for the human species. I don't know how to say it other than that.

GLENN: I will tell you, I saw the stat, that I think it was last year or the year before. 20 percent of all pregnancies ended in abortion. 20 percent.

JOSH: Wow.

GLENN: That is -- that is a shocking number. And we do have our -- our work cut out for us. Because I -- I think that these states are going to double down. But I think, you know -- God doesn't waste anything. You know, there is no waste with God. Even the -- even the worst things that could possibly happen, turn out to be something good. You know what I mean? You're like, holy cow, how did that just happen.

And I think that evil is going to fully come unmasked. I'm telling you, Josh. I don't know how you feel about this. I think this could be the day of America's Kristallnacht. I can see these pro-life centers being burned to the ground today. They're calling for a night of rage around the country. I think evil is going to show itself. And that will scare the American people, hopefully.

JOSH: You know, I've been thinking about this a lot this week, actually. Because I've been bracing for a new kind of George Floyd summer of love, happening this summer. Coming to a city or suburb near you. Unfortunately, myself. Look, I live in Florida. I know, Glenn, you live in Texas. It is in moments like this, where I do think that where you live matters. And who your mayor is. Who your governor is, matters.

Because law and order and rioting and anarchy is not really a federal issue. It is to a limited extent. June 2020, Tom Cotton wrote this op-ed that was pretty controversial at the time.

I happen to agree with it. Where he said, quote, unquote, send in the troops. And there is some federal legislation from the reconstruction era that would justify that.

But most kind of quelling and quashing of anarchy does happen. Constitutionally speaking, at the state and local level. So at a moment like this, where I fear that you're probably not wrong. I take some solace. That Governor DeSantis is my governor. I think Texans should take some solace, that they are represented by -- by a Republican governor. The legislature there as well. So I -- I fear that you are right. I pray obviously, that no one -- it's hard.

I fear that it's something -- that something bad is happening. At the end of the day, of course. It does not mean that justices cannot do what they are supposed to do. So thank God they did that.

GLENN: So, Josh, have you looked into what the White House has been saying? The White House yesterday. In fact, do we have a clip of -- of this?

What the White House said yesterday, about the guns. And then they were turned to the -- the Scott us ruling, for Roe vs. Wade. Do we have that, please?

JOSH: Will the president accept this decision, even if he disagrees with it?

VOICE: I think it's going to come from the Supreme Court. So it's a decision we certainly are going to respond to. I'll leave it at that. Just like any other Supreme Court decision. Just like the one they did today on guns.

GLENN: So the White House won't say that they're going to accept it.

Which I don't think they will. They're talking now about taking doctors and moving them into places like Oklahoma or Texas, where abortions will be outlawed. And putting doctors on our military bases to perform abortions.

I mean, where does this go, when you have a government, that is in defiance of -- of one branch of the government?

JOSH: So there's a lot to unpack here. So we should start from first principles. The idea of judicial supremacy, and this is a peculiar thing, to say on a day like today, where such a pro-life victory has happened in Italy. But if we're going to be consistent here, the idea of judicial supremacy. The idea that the justices, have the sole and exclusive ability to interpret the Constitution for themselves. And no other Constitutional actor, in article one or article two, let alone the state. Has the ability to tentatively interpret it. That is erroneous. In fact, actually it was really Abraham Lincoln actually, who in the Dred Scott case, famously opposed judicial supremacy and flouted the Dred Scott ruling, at least as it pertains to everybody other than Dred Scott himself. I have actually argued, a former legal scholarship, in a law review article actually, that the Laconian view of how each branch of government should interpret the Constitution for itself, is correct.

Having said that. Having said that, there is a thing called prudence. And there is a thing called comedy. And in a moment like today, when it really does look like -- and I agree with you, that we are now bracing for riots through the streets. When the political rhetoric is at DEFCON one. When people are trying to assassinate Supreme Court justices. I think it would be -- at its bare minimum, a profoundly imprudent act. For the Biden administration, to try to undermine this ruling.

Now, what they might do, is they might try to kind of issue some kind of executive orders, or issue some regulations, that might try to kind of undermine it, at the edges here. But at the end of the day, the idea that this returns to the state. There's not really a whole lot they can do about that. Basically, at this point, throughout the country. Kentucky within West Virginia. Kansas. Whatever. If they want to go ahead and ban abortion, what can the Biden administration literally do about that? I mean, short of sending in the National Guard, to protect Planned Parenthood, if the state legislature of Kentucky goes ahead and bans it. There's not a whole lot they can do. And it's very difficult to envision a world, in which the Biden administration literally sends in troops to red states, to protect Planned Parenthood, if that state legislature goes ahead and bans it. So for practically speaking. This is a lot of tough talk and rhetoric. Obviously the campaign here in 2022. There's not really a whole lot that practically speaking, they can do to actually prevent red and purple states from enacting pro-life legislation.

GLENN: I'm glad to -- I'm glad to hear that. I know that they have been working on things. I mean, he has said, you know, there's executive orders, that I can employ. There are things that I can do. He's talked about a national public health emergency. Which I think is just -- is crazy. But I would hope, that the president would come out and say, we strongly disagree with this. And you're right. The court is not the end all. But the court did not end abortion. It just said, the people should decide. I think that's the best kind of court ruling, on any of it. The people should decide what this is. And send it back to the states. Josh, I thank you very much. Appreciate your time. Was there -- there was another ruling, that came out today. Was it important?

JOSH: Oh, no. In comparison to this. A total nothing burger. A 5-4 decision on Medicare reimbursement related. So nothing, honestly.

GLENN: Great. Thank you very much. Appreciate it, Josh. Josh Hammer, opinion editor for Newsweek. And the host of the Josh Hammer show.

GLENN: There are two things trending on twitter right now.

Number one is praise God.

Number two trend is Night of Rage.

Good verses evil.

Build up or tear down.

'Lord, we are SORRY it has taken us this long': BlazeTV hosts react to historic Roe v. Wade decision

Photo by Yasin Ozturk/Anadolu Agency via Getty Images

The Supreme Court of the United States officially overturned Roe V. Wade, and the debate over abortion rights has been given back to the states. On this historic day, BlazeTV hosts celebrate the Supreme Court's incredible decision and take a look at some of the insane reactions as the left comes completely undone.

Jason Whitlock: Today will forever stand as a pivotal moment in our nation’s history

The Supreme Court of the United States overturned Roe v. Wade. The decision and the reaction to it have already revealed a lot about our people and politics. Pro-life groups celebrate, pro-choice groups call for “a night of rage,” and Nancy Pelosi just seems completely confused by the United States Constitution.

Glenn Beck reacts LIVE to Roe v. Wade ruling: 'Lord, we are SORRY it has taken us this long'

I never thought that in my lifetime, I would see Roe v. Wade be overturned. But today, that day has come. The Supreme Court has voted 6 to 3 to return decisions about abortion to the states. But this fight isn't over. We are about to see good versus evil side by side. Many states will stand with the unborn. But others will become abortion mills. It's your turn to choose now, America!

Allie Beth Stuckey: 'Praise God, Roe v. Wade is overturned!'

I don't know about you, but I just had the most euphoric feelings. It almost seems too good to be true. I didn't think there was any way that this would actually happen, especially with all the backlash, intimidation, and violence toward the Supreme Court justices. And yet, here we are. Roe v. Wade has been overturned. This is an amazing day!

Dave Rubin: Big disagreement on what happens next now that Roe v. Wade is overturned

Dave Rubin, Libby Emmons, Jeffrey A. Tucker, and David Reaboi debate what will happen in the wake of the Supreme Court’s breaking decision on Roe v. Wade. Now that abortion rights have been pushed back to the states, will there be a summer of massive riots or not? Will the Roe v. Wade ruling make America’s political polarization significantly worse?

Stu Burguiere: Here are the reasons SCOTUS overturned Roe v. Wade

I never thought this would happen. I never thought I would see this day. I just never ever ever ever never ever believed that Roe v. Wade would actually be overturned. I really didn't. But let's take a look at the reasons this day has finally come ...

The Rick & Bubba Show: 'This is history! Unfortunately we're 60 million lives too late'

We were live on the air when news broke of the Supreme Court decision to overturn Roe v. Wade.