con ed explosionThe global financial system is close to going supernova…

Silver Eagle SD Bullion

Submitted by Dave Kranzler:

Both Credit Suisse and Deutsche Bank stocks are hitting all-time lows.  Both are collapsing despite billions in Central Bank – Fed, ECB, Bundesbank, Swiss National Bank – monetary support.

Deutsche Bank had been advertising a 5% interest rate to customers in Belgium on  90-day deposits of at least 50k euros .  Bank deposits are essentially “loans” to a bank from the depositor (creditor).  This implies that the rate that DB had to pay to attract deposits is equivalent to a triple-C rated credit (although the 10-yr junk bond rates for double-B  rated bonds are around 5.5%, keep in mind that DB is paying 5% for 3-month money).   This is the unmistakable sign of a company that is collapsing.

DB stock was down over 3% yesterday on a day when most big TBTF banks for down 1% or less. It’s down another 2.8% 3% as I write this today, trading below $15/share for the first time ever.   This bank is obviously collapsing and any money manager who holds onto this stock for clients is in serious breach of fiduciary duty.  This is the 2016 version of Enron.

But it won’t be a “Black Swan” event.  The Central Bank authorities knew DB was going to collapse when Anshu Jain was fired in June 2015, literally about  2 weeks after DB’s board had given Jain even more control over bank operations.  However, the Central Banks mentioned above collectively had a year to put a “ring” around the collateral damage – i.e. the derivative counter-party default risks – that occurs from DB collapsing.

The Credit Suisse problems have been far less visible but the behavior of the stock is signalling to us that CS’ problems are on par with DB’s.  I don’t know if both banks will ultimately end up being monetized by a combination of taxpayer bailiouts (including U.S. Taxpayers) and bail-ins.  I would suggest that bail-in capital available would not even remotely address the derivatives-related liabilities embedded in the Credit Suisse’s and DB’s balance  sheets.

My point here is that – unless there’s even bigger problems hidden from the Central Banks, which have had a year now to address the DB/CS situation – a DB collapse will likely cause a sell-off in the stock market, but would not be the “Black Swan” for which everyone is searching.

I don’t know what the Black Swan is or what it will look like.  Otherwise it wouldn’t be a Black Swan, right?  What I will suggest is that the day in which the “box” with Schrodinger’s cat appears and we look into to it to see a dead cat is quickly approaching.  I would also suggest that this is why those who have been calling for a short-term wipe-out in the price of gold have been proved wrong for over two months, despite the blatant daily attempts by the Fed/ECB/bullion banks to push the price of gold lower.

This is a development that no one is talking about – but I believe that is represents a hidden slow-motion financial collapse that will soon accelerate:

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Silver Eagle SD Bullion

  1. Very interesting market action today with gold down significantly against a surging increase in platinum and palladium. Usually the metal complex moves together. Someone(like a Sovereign) with deep pockets and no inclination to make a profit is pushing paper gold down against the upward current.

  2. DB is detonating?  Why would Gold be down?  The scare tactics and lies are neverending.  Gold will move higher when the supply dries up and the system collapses, none of these external games will matter.

  3. I’d guess that gold is down because BRexit is dead.  Brexit was a fear situation, causing major turmoil  in the paper markets, with gold as a recipient of the attention paid to PMs.  That and gross attempts to cap the price, have made gold volatile. Once BRexit is in the rear view mirror, the same old same old actions against PMs will continue until the next fear factor event is tossed in the midst of this morass of crap and sends precious metals into a up and down cycle.

  4. @AGIIK  Why do you say Brexit is a fear situation?…….as in only fear. I’d suggest it is a reasonably rational response to want genuine sovereignty again, at least technically, even if we do actually remain under the thumb of the usual suspects many of whom originate here, till the day we can deal with that too. I want out for reasons of self determination. The economy is a secondary consideration and is pretty much the only area of argument that people are steered to. The murky origins of the EU remain unknown and under wraps for most here. The British people have never been asked about whether they want a political, fiscal and military joining at the hip with the EU. The original referendum was about a common trade zone only. The scumbags in charge of the media and finance can pretty much get any picture created on a temporary basis. I had a bit of propaganda shoved through my letterbox with Obamas picture on the back telling us to vote to remain if we knew what was good for us. I’m sure arrangements could be made to get the pound to strengthen just at the right moment. as it is, just to support the thesis that the remain camp is growing stronger. I’m not so sure. It also rather depends who is counting the votes as always. You are probably correct that the “tactics” employed and subliminally persuasive events will corale the last dithering sheep in the “right” direction but I will wait to see what transpires. I have already voted via post and will have my fingers crossed right up until the moment my hopes are dashed and I have to resign myself to living in this vile, corrupt, blatantly undemocratic, bureaucratic controlling nut house for the rest of my life.

  5. @UKTramp  I used the word ‘fear’ because of the murder of the PM and all the propaganda laid about telling how bad it would be if UK exited the EU is set up to scare people of the low information sort as well as the markets that rely in certainty and stability.  There’s trillions at stake in disruptions to the status quo and march to the New World Order and Neo-feudalism.

    The EUroBUrocrats have not finished looting the UK. These packs of waffle eating puzzys will have you.  They’ve not finished shoving terribly undesireable people like the fuzlims  on a member of the EU or face $275,000 fine per refusal.  The regretful part of the UK and their enforced further frog march to the dung heap of the EU is that the UK is disarmed.

    I expect that we extremely well armed people in the US will be fighting a war with the undesirables.  We share a common language and a more or less common heritage so these undesireables will not find common cause with any of us.  There will be a war and it will not be of our making.

    They will live in their banueils and neighborhoods in the inner city, festering with their self created grievances, demanding Sharia law over the Constitution until we are forced to root them out.  It will get ugly. The crass and bold balderdash over the Orlando shootings is not wearing well with the informed person. Whether this was a false flag, a  US government sponsored terrorist attack, an incredible example of PC gone rogue in our law enforcement,  a real event with the consequences as we see presented in the MSM, similar to a car bombing in Fallujah,  this will get much worse before it gets better.

    I  see and existential threat here just the Europeans faced when the Califate tried to conquer that region 700-800 years ago.

    But I digress

    BRexit appears to be on life support and, as you know, I am all about people retaining their sovereignty and national identity.  The Europeans have 2,000 years of hating the UK.  the Euro union did not just sweep that away, thinking your country will go gently into that good night.

    You might end up fighting your own battles against the Mayor of Londonistan and his crew

  6. Vive le  fait accompli.  The progression of events moves at a pace which is accelerating daily towards its ultimate end.What matters which Mickey Mouse stroke is the proverbial one that breaks the camel’s back. I will declare with no reservation that the demise of Deutschebank and Credit Suisse are not the best news for the world I ever heard. As for Dave Kranzler s assertion that the Central Banks could ring fence the demise of these two banks I think he’s been reading too many comic books of Superman variety.  We are talking of defaults taking counter parties into account of quadrillions.  I want to see the fence they build to protect that!  I believe that fence would take a hell of a lot longer than one year to build.  My estimate is it,would take maybe 5 centuries or so of consummate human civilization effort to build that fence!  You see which counterparty could take the debt from Deutschebank?  They already have a boatload of counterparty risk to deal with themselves which goes when Deutschebank goes.  Don’t forget these credit defaults have first payment priority for these banks balance sheets.  The major banks of the world combined assets combined could not control this kind of indebtedness.  No Deustchebank alone will command amworld credit default of at least 1.5 quadrillion notational!

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