THE “Lehman of Europe” on The Verge of Collapse

• THE “Lehman of Europe” on The Verge of Collapse
  by Andrew Hoffman, http://blog.milesfranklin.com/  
  Four months ago, amidst the U.S. stock markets’ worst – and Precious Metals’ best – ever start to a year, I opined that a swirling confluence of devastating political, economic, and monetary events made it unlikely the world would escape 2016 without a catastrophic financial market event.  Fast forward to today, and I feel stronger than ever about this outlook, now that “the powers that be’s” best efforts to manipulate worldwide markets and economic data have fallen flat on their face.  Not to mention, the Cartel’s last ditch gambit to put Precious Metals “back in their box”; as following the past week’s spirited, albeit blatantly capped, rallies, gold and silver have recouped three-quarters of their post “FOMC minutes attack” losses; just as I predicted in May 18^th’s epic, 42-minute, must listen Audioblog, titled “the Fed’s desperately pathetic FOMC minutes attack will miserably fail.”
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  To that end, late yesterday afternoon’s COT report (I’m writing this Saturday morning) revealed that the Cartel “went for broke” last week, in shorting 29,000 more gold contracts – worth $3.6 billion – through Tuesday afternoon; putting its historic (naked) short position not far from last months’ all-time high level, just before prices surged $30/oz on Wednesday, Thursday, and Friday.  In other words, they yet again lost a major battle, putting the date of their inevitable Waterloo that much closer.  And heck, it’s not even gold, but silver where the biggest potential fireworks lie, in light of the fact that COMEX registered inventories last week plunged to anall-time low.  Which is probably why Indian silver imports hit an all-time high last year; U.S. silver imports, an all-time high last month; and silver bullion sales an all-time high in the first quarter.  And why, to that end, I penned, just two days ago, the “upcoming, historic silver shortage.”
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  As for today’s principal topic, how apropos could it be that two days ago, German Bundesbank President Jens Weidmann and Financial Minister Wolfgang Schauble warned of a “sudden surge” in European risk premiums, care of the ECB’s unfathomably dangerous forays into mega-negative interest rates and limitless, broad-sweeping quantitative easing?  I mean, not 24 hours later, Germany’s – and Europe’s – largest bank, Deutschebank, which has been the subject of liquidity fears for years now, saw its stock plunge 6% to $15.74/share; 89% below 2007’s all-time high of $138/share; 17% below its 2008 low of $19/share; and mere pennies above its $15.51/share low this February, one day before – LOL – it supposedly bought back $5 billion of bonds, catalyzing a “dead cat” bounce to $20.50/share.  To that end, the reason I mock the supposed February 12^th bond buyback, is that most likely, DB either 1) didn’t buy back anything, but simply lied about it; 2) they bought the bonds back, but compromised their teetering liquidity further by doing so; or 3) bought the bonds back with newly – covertly – borrowed funds, making its debt burden even worse.  I mean, buying back $5 billion of bonds when you have $700 billion of on balance sheet debt and the world’s largest derivatives book, has about the same practical efficacy as the Titanic bailing out a few buckets of water.  Not to mention, demonstrating just howdesperate your management is, to “kick the can” a few more months, in the – subsequently failed – “hope” of a government or Central bank bailout.  Or, to put it squarely in Titanic terms, an “absolution that would never come.”
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  Since February’s stock plunge, I have deemed Deuschebank the “Lehman of Europe”  – most recently, at last month’s Miles Franklin Q&A Rap Session in Houston.  I mean, DB’s stock plunge – amidst an environment of cascading bank stock prices across Europe – sticks out like a sore thumb; as clearly something is very, very wrong there.  In my view, the “powers that be” are for some as yet unknown reason, distancing themselves from DB – just as was the case with Lehman in the States, as its competitors were serially deemed “too big to fail.”
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