Of the nearly 800 trillion in the derivatives markets, Deutsche Bank owns approximately 74 trillion!
This bank is doomed!
Even the IMF recently said that Deutsche Bank is the greatest risk to financial stability.
“Among the globally systemically important banks, Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse.” – IMF
This comes off the heels of the U.S. Federal Reserve “stress test” of how banks would fare during a financial crisis, a test where Deutsche Bank was one of only two that failed!
The bank is currently leverage 45-to-1. When Lehman Brothers failed in 2008, they were leveraged 31-to-1.
With the entire global economy interlocked, we believe this bank will soon fail. However, due to its size, we can’t even begin to imagine a scenario where it won’t be bailed out.
Bailout or not, when this ship sinks, it’s going to be like a Grand Canyon-sized meter hitting the Atlantic, and will have deep implications, especially in Europe and the U.S.
Depending on how events unfold, which we’re not going to attempt to predict, when Deutsch Bank finally goes, it could very well make the 2008 crisis look like a walk in the park.
No doubt, a systemic threat to the entire financial system looms over all of us.