Deutsche Bank - They think its all over.....
Discussion
Thorodin said:
Strikes me it's no good blaming the internet for the gross bad manners of the few who resort to such antics. Either you are old enough to control yourself or not. If not, just don't read it. Unless of course you think you know all about everything. Which is what it sounds like. Trolls.
Oh, get over yourself. ETA if you want to know why I and others were annoyed, it's because the OP made a post and run of scaremongering crap and, when called on it, after throwing around insults, claimed years of financial sector experience and that he was involved in an exercise looking at splitting up UK banks, but then ran away from questions.
Edited by Zod on Tuesday 27th September 20:33
fblm said:
bucksmanuk said:
...how you can have $many trillion of derivatives on this?
No need to be sarky but it's a valid question. A derivative is a contract that derives its value from an underlying price of something. A very common derivative that will make up a significant chunk of DB's exposure is an IRS or interest rate swap. Lets say I am a bank and I agree to pay you a floating rate of interest every 6 months for 10 years in exchange for you to pay me a fixed rate of interest periodically every 6 months of say 5% for 10 years on say $100m. (I want rates to fall so I pay you less). The actual cashflows from this trade are the net interest payments on $100m every 6 months. The $100m might or might not exist somewhere, it doesn't matter. It's just a notional amount. Now lets assume I go out and hedge that trade with another person, that is to say do the exact opposite and agree to receive the floating rate for 10 years and pay the fixed... I have no net exposure to interest rates, i haven't leant any money to anyone and all my future cashflows cancel out but my gross notional derivatives exposure for the purposes of the daily mail are now $200m. IRS trades over $1bn are common, daily even, hourly if the duration is under 1 year, a busy IRS desk at a bank like Deutsche are buying and selling all day long and can easily rack up $50bn or more a day in 'gross exposure'. All it tells you is that they are a big bank. It's not unlike a bookie taking 200 bets for and against a horse; you don't need 200 underlying horses, you can bet on the same horse! If the bookie has 20,000 bets on the horse all it tells you is he is a big bookie, it doesn't tell you if he stands to win, lose or evens if the horse drops dead.Edited by fblm on Tuesday 27th September 17:44
What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bulls
t fancy gambling schemes designed to use massive capital to turn teeny profits?(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
FredClogs said:
Right... So people are using massive amounts of money (that presumably doesn't actually pysically exist) to make very small amounts of money by hedging their bets all over town in a seires of complex transactions... And the Whale at the table (possibly more like a giant squid) is juggling dozens of hands whilst playing Craps and Roullette at the same time all in the aim to reduce his exposure to any one particular loosing bet...
What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bullst fancy gambling schemes designed to use massive capital to turn teeny profits?
(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
No you're very wrong. This is a bank entering into derivative transactions to help other counterparts manage their risks.What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bulls
t fancy gambling schemes designed to use massive capital to turn teeny profits?(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
Edited by sidicks on Tuesday 27th September 21:08
sidicks said:
No you're very wrong. This is a bank entering into derivative transactions to help other counterparts manage their risks.
But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
You can dress it up how you like with added adhoms for distraction, people like me won't care because we're all too stupid to know what's what...But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
Edited by sidicks on Tuesday 27th September 21:08
Are you saying DB aren't doing the gambling, they're just lending to gamblers and vouching for their bets... Does that seem like a reasonable business to you? Unless you're some kind of Don Corleon figure, I'd say sooner or later when the music stops someone is going to be left holding the hot turd burger.
Edited by FredClogs on Tuesday 27th September 21:31
FredClogs said:
You can dress it up how you like with added adhoms for distraction,
The 'ad homs' seem to originate from your posts..FredClogs said:
people like me won't care because we're all too stupid to know what's what...
i'm sorry, I can only judge by what you post...FredClogs said:
Are you saying DB aren't doing the gambling, they're just lending to gamblers and vouching for their bets...
No, I'm saying nothing of the sort.FredClogs said:
Does that seem like a reasonable business to you? Unless you some kind of Don Corleon figure, I'd say sooner or later when the music stops someone is going to be left holding the hot turd burger.
I'm sure you would say that.Edited by sidicks on Tuesday 27th September 21:41
sidicks said:
FredClogs said:
Right... So people are using massive amounts of money (that presumably doesn't actually pysically exist) to make very small amounts of money by hedging their bets all over town in a seires of complex transactions... And the Whale at the table (possibly more like a giant squid) is juggling dozens of hands whilst playing Craps and Roullette at the same time all in the aim to reduce his exposure to any one particular loosing bet...
What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bullst fancy gambling schemes designed to use massive capital to turn teeny profits?
(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
No you're very wrong. This is a bank entering into derivative transactions to help other counterparts manage their risks.What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bulls
t fancy gambling schemes designed to use massive capital to turn teeny profits?(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
Edited by sidicks on Tuesday 27th September 21:08
BigLion said:
sidicks said:
FredClogs said:
Right... So people are using massive amounts of money (that presumably doesn't actually pysically exist) to make very small amounts of money by hedging their bets all over town in a seires of complex transactions... And the Whale at the table (possibly more like a giant squid) is juggling dozens of hands whilst playing Craps and Roullette at the same time all in the aim to reduce his exposure to any one particular loosing bet...
What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bullst fancy gambling schemes designed to use massive capital to turn teeny profits?
(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
No you're very wrong. This is a bank entering into derivative transactions to help other counterparts manage their risks.What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bulls
t fancy gambling schemes designed to use massive capital to turn teeny profits?(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
Edited by sidicks on Tuesday 27th September 21:08
BigLion said:
Derivatives are all very well, but when the market starts to operate outside of the risk model parameters that's when problems occur and Lehman type scenarios develop. Investment banking will support in-house treasury and corporate divisions to mitigate risk for their own parent retail business and their larger external corporate clients, but the bit where the investment bank takes punts on the market is where issues arise.
Surely one of the main conclusions of the banking crisis was that the banks were operating within their risk model parameters, but those parameters were wrong i.e. didn't align to the real world?!sidicks said:
BigLion said:
Derivatives are all very well, but when the market starts to operate outside of the risk model parameters that's when problems occur and Lehman type scenarios develop. Investment banking will support in-house treasury and corporate divisions to mitigate risk for their own parent retail business and their larger external corporate clients, but the bit where the investment bank takes punts on the market is where issues arise.
Surely one of the main conclusions of the banking crisis was that the banks were operating within their risk model parameters, but those parameters were wrong i.e. didn't align to the real world?!Derek Chevalier said:
BigLion said:
sidicks said:
FredClogs said:
Right... So people are using massive amounts of money (that presumably doesn't actually pysically exist) to make very small amounts of money by hedging their bets all over town in a seires of complex transactions... And the Whale at the table (possibly more like a giant squid) is juggling dozens of hands whilst playing Craps and Roullette at the same time all in the aim to reduce his exposure to any one particular loosing bet...
What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bullst fancy gambling schemes designed to use massive capital to turn teeny profits?
(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
No you're very wrong. This is a bank entering into derivative transactions to help other counterparts manage their risks.What could possibly go wrong?
Why is this even a thing?
Wouldn't investing directly in companies, industry and infrastructure be a more constructive way of risking your money than bulls
t fancy gambling schemes designed to use massive capital to turn teeny profits?(I realise this may be somewhat outside the scope of the thread OP - but I do wonder)
But as usual, your tone suggests that you don't actually want a sensible discussion, you just want to demonstrate how little you understand about the subject under discussion.
And people wonder why people like you get short shrift on this forum.
Edited by sidicks on Tuesday 27th September 21:08
Top line on pistonheads there are too many people trying to re-write the 2008 scenario and also trying to explain away why we shouldn't worry now...the same noise we heard when Northern Rock was doing 125% mortgages.
I work in Investment Banking product control so I have no axe to grind, but I do believe as a society we forget our mistakes too readily, hence the constant boom and bust we experience economically !
PS Worth reading up on how Sachs and co used derivatives to help Greece and Italy hide their sovereign debt - I think we'll see that with DB too
I work in Investment Banking product control so I have no axe to grind, but I do believe as a society we forget our mistakes too readily, hence the constant boom and bust we experience economically !
PS Worth reading up on how Sachs and co used derivatives to help Greece and Italy hide their sovereign debt - I think we'll see that with DB too
Edited by BigLion on Tuesday 27th September 21:55
BigLion said:
I said when the MARKET operates outside the risk model parameters i.e. RBS has a risk model, shock scenario occurs and the RBS risk model parameters in no way reflect such a scenario
Ok, understood. I thought you were referring to the banks when you were referring to the 'market' rather than the 'economy'!sidicks said:
BigLion said:
I said when the MARKET operates outside the risk model parameters i.e. RBS has a risk model, shock scenario occurs and the RBS risk model parameters in no way reflect such a scenario
Ok, understood. I thought you were referring to the banks when you were referring to the 'market' rather than the 'economy'!
Adenauer said:
I don't understand this and I shan't even pretend to, however. My business account is with the DB and it has quite a tidy sum in it.
Is it safe, or could it potentially vanish if the bank went tits up?
EU rules mein Freund, bail ins (of depositors) before bailouts by the tax payer. Your lot insisted on it. Seems unlikely it will come to it though and if it did I doubt any bank would be much safer!Is it safe, or could it potentially vanish if the bank went tits up?
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