Deutsche Bank - They think its all over.....
Discussion
FredClogs said:
Right, well that's perfectly clear then. I'm sure the umpteen court cases involving companies duped by IRS and miss selling will just go away when you explain things to them so precisely... It's a flawed system, just like bundling up and slicing in sub prime mortgage lending and selling on collateralised debt was... I my not understand the biology of canine proctology but I know a dog s
t when I see one.
You seemingly understand so little on this subject it's genuinely embarrassing.t when I see one.fblm said:
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?
limpsfield said:
I don't believe the rumour that PH are working on an update to the NPE forum which will send out an email alert when the thread gets to the point where everyone gets their dicks out to compare.
This is a particularly festering sore of a thread. One hopes two or three of the main participants will take a walk from their keyboards for a bit. At least allow the mods to clean up the detritus.Adenauer said:
Well, I transferred €300K from the DB business account into a different bank yesterday just to be on the safe side, so if the DB does go titten hoch you can blame it on me.
There are some new rules for German banks that come in to force on 1st January which make certain senior unsecured debt subordinate to corporate deposits, which would provide a significant cushion in the structure to protect depositors.sidicks said:
Adenauer said:
Well, I transferred €300K from the DB business account into a different bank yesterday just to be on the safe side, so if the DB does go titten hoch you can blame it on me.
There are some new rules for German banks that come in to force on 1st January which make certain senior unsecured debt subordinate to corporate deposits, which would provide a significant cushion in the structure to protect depositors.Adenauer said:
I'm not closing our DB account, but what I am doing for my own piece of mind more than anything else is opening a few other accounts with different banks not affiliated with DB and spreading the money around a bit. That's got to be the safest realistic option for a business over here in Germany, surely?
Spreading your exposure is always good!sidicks said:
Adenauer said:
I'm not closing our DB account, but what I am doing for my own piece of mind more than anything else is opening a few other accounts with different banks not affiliated with DB and spreading the money around a bit. That's got to be the safest realistic option for a business over here in Germany, surely?
Spreading your exposure is always good!It's not 'my money', but it is money that I am responsible for and I'd hate to have to say 'you know that 300K we had, boss?'.
el stovey said:
Other sub forums are full of experts freely passing on their knowledge and experience, making them very pleasant places to visit.
So here we are. Against my better judgement I gave it a shot but the usual people have gone full retard. I can't figure out if they are wilfully ignorant or just thick. It's generally expected of matt/Fred but it's always nice when BORE crawls out from under his rock... the last time we heard from that clown was laughing at some IT bloke who'd killed himself. Business as usual. Oh goodieFredClogs said:
Mrr T said:
I understand your frustration but suggests it better to explain than just criticise ignorance.
Contracts For Difference (CFD's) are an important development of modern finance. The most common are Interest Rates swaps, which as others have pointed out swap fixed and flowing interest rates. They are used because various entities have access to different financing arrangements. For example if a company is looking to raise debt via a eurobond the demand for corporate floating rate debt is very limited. However, unless the issue is to fund a long term project most companies would rather borrow on a floating rate basis. The options are therefore either to issue the floating rate bond at a high enough rate to entice buyers or save money by issuing a fixed rate bond and swapping it into floating.
Assuming he company decided to enter into the swap it will do so with a bank. The bank will either hedge the position by having a customer on the other side or by using other instruments. There will be a difference between the rate charged to the corporate and the costs of the hedge. That's the banks profit. The hedging is relatively easy and so there should be no market risk only credit risk. To minimise the credit risk with the corporate the bank and the corporate will sign a market standard agreement with a collateral annex so the swap is MTM on a daily basis and margin (cash or maybe bonds) are passed between the parties so as to match the risk. The market standard documentation will be supported by legal opinions on the relevant jurisdictions.
Right, well that's perfectly clear then. I'm sure the umpteen court cases involving companies duped by IRS and miss selling will just go away when you explain things to them so precisely... It's a flawed system, just like bundling up and slicing in sub prime mortgage lending and selling on collateralised debt was... I my not understand the biology of canine proctology but I know a dog sContracts For Difference (CFD's) are an important development of modern finance. The most common are Interest Rates swaps, which as others have pointed out swap fixed and flowing interest rates. They are used because various entities have access to different financing arrangements. For example if a company is looking to raise debt via a eurobond the demand for corporate floating rate debt is very limited. However, unless the issue is to fund a long term project most companies would rather borrow on a floating rate basis. The options are therefore either to issue the floating rate bond at a high enough rate to entice buyers or save money by issuing a fixed rate bond and swapping it into floating.
Assuming he company decided to enter into the swap it will do so with a bank. The bank will either hedge the position by having a customer on the other side or by using other instruments. There will be a difference between the rate charged to the corporate and the costs of the hedge. That's the banks profit. The hedging is relatively easy and so there should be no market risk only credit risk. To minimise the credit risk with the corporate the bank and the corporate will sign a market standard agreement with a collateral annex so the swap is MTM on a daily basis and margin (cash or maybe bonds) are passed between the parties so as to match the risk. The market standard documentation will be supported by legal opinions on the relevant jurisdictions.
t when I see one.I have not seen any court cases about IRS since the Fulham and Hammersmith case many years ago. Your link seemed to suggest these where being sold to small business. If you have more links if you send them I will comment if I can. In my experience IRS are only transacted with wholesale counter parties who will all have there own specialist treasury departments who know exactly what they are doing.
As for CDO again you seem to lack any knowledge. I am not sure but some US CDO may have defaulted but I do not know. As for CDO issued in the UK none of them have defaulted in terms of loss, Not even on the high risk slice. The only default I know of was Granite, the NR CDO issue names, and that was a technical default because of the government take over of NR. All payments are current and there is no indication that will change.
As for the poster above who suggests banks take a punt, I suggest he becomes familiar with the Volker rules.
loafer123 said:
jsf said:
Probably because RBS was only fined 1/5th of what they expected they were going to be, by the USA last night.
Different case, I think?They said they had substantially set aside the capital for this one, but not that they were releasing a huge amount back into the accounts.
I've spent over 2 decades in what the banking industry calls "front office" across a variety of asset classes (different types of financial instrument) but recognise the frustrations of guys like Fred. In a sense he represents the views of the 99%. Even though the nature of my job means I sit on the other side, the lack of willingness to engage in meaningful dialogue between the financial services industry and the general public leads to conversations like the car crash that this thread has turned into.
Partly this is caused by a reluctance by bankers to speak plain English. We invent our own language and jargon to create a barrier, like priests speaking Latin. If we truly took an objective look at what our industry does, a reasonable person might reach the conclusion - as Adair Turner, the former head of the FSA did - that much of what the industry does is "socially useless".
So when Fred rages against casino bankers, I think what he is really raging against is the disconnect that exists between what we might call the real economy and the financial economy. And fundamentally this boils down to the nature of money itself: the whole world now views money as a commodity to be traded, something that itself has value, rather than viewing money as merely a medium of exchange or something that measures the value of real goods and services. As a result, not only can we create value out of intangibility (other people's debts can be bought and sold, derivative contracts can be created with the loosest of relationships with real underlying assets), but we have also created an economic system that allows banks to lend out multiples of what they have on deposit - something referred to as the fractional reserve banking system (since banks must keep on deposit a certain minimum fraction of money versus how much they lend out).
This has the bizarre effect of a private sector banking system that literally creates money. The odd thing is very few people seem to recognise this as fundamentally unnatural. Even our own MPs incorrectly believe money can legally be created by the government alone (according to a poll conducted in 2014, 71% of them believed this - in actual fact 97% of money in the economy today is created by the banks, only 3% by the government). Only one in 10 MPs correctly understood that banks create new money when they make a loan. And 2 years ago, the House of Commons debated money creation for the first time in 170 years - and yet only around 30 MPs turned up. (There must have been a couple of hundred when they debated their own expenses!)
If MPs lack basic knowledge or interest in this subject, what hope is there of them preventing another house price boom or a second credit bubble?
I guess what I am saying is rather than attack Fred and others for "stupidity", far more sensible to recognise there is merit in his questioning the validity of our economic system.
Partly this is caused by a reluctance by bankers to speak plain English. We invent our own language and jargon to create a barrier, like priests speaking Latin. If we truly took an objective look at what our industry does, a reasonable person might reach the conclusion - as Adair Turner, the former head of the FSA did - that much of what the industry does is "socially useless".
So when Fred rages against casino bankers, I think what he is really raging against is the disconnect that exists between what we might call the real economy and the financial economy. And fundamentally this boils down to the nature of money itself: the whole world now views money as a commodity to be traded, something that itself has value, rather than viewing money as merely a medium of exchange or something that measures the value of real goods and services. As a result, not only can we create value out of intangibility (other people's debts can be bought and sold, derivative contracts can be created with the loosest of relationships with real underlying assets), but we have also created an economic system that allows banks to lend out multiples of what they have on deposit - something referred to as the fractional reserve banking system (since banks must keep on deposit a certain minimum fraction of money versus how much they lend out).
This has the bizarre effect of a private sector banking system that literally creates money. The odd thing is very few people seem to recognise this as fundamentally unnatural. Even our own MPs incorrectly believe money can legally be created by the government alone (according to a poll conducted in 2014, 71% of them believed this - in actual fact 97% of money in the economy today is created by the banks, only 3% by the government). Only one in 10 MPs correctly understood that banks create new money when they make a loan. And 2 years ago, the House of Commons debated money creation for the first time in 170 years - and yet only around 30 MPs turned up. (There must have been a couple of hundred when they debated their own expenses!)
If MPs lack basic knowledge or interest in this subject, what hope is there of them preventing another house price boom or a second credit bubble?
I guess what I am saying is rather than attack Fred and others for "stupidity", far more sensible to recognise there is merit in his questioning the validity of our economic system.
I don't have the time to translate this at the moment, but things are afoot.
http://www.zeit.de/wirtschaft/2016-09/deutsche-ban...
http://www.zeit.de/wirtschaft/2016-09/deutsche-ban...
Harris_I said:
This has the bizarre effect of a private sector banking system that literally creates money. The odd thing is very few people seem to recognise this as fundamentally unnatural. Even our own MPs incorrectly believe money can legally be created by the government alone (according to a poll conducted in 2014, 71% of them believed this - in actual fact 97% of money in the economy today is created by the banks, only 3% by the government). Only one in 10 MPs correctly understood that banks create new money when they make a loan. And 2 years ago, the House of Commons debated money creation for the first time in 170 years - and yet only around 30 MPs turned up. (There must have been a couple of hundred when they debated their own expenses!)
You may have worked in the front office of a bank but I am sorry you do not seem seem to know much about accounting. Maybe you just use terminology loosely. If you mean a bank can lend several times its capital, then yes you are correct. If you mean a bank can lend serval times the amount deposited with it by account holders, the yes you are correct. If you are saying a bank can lend money it has not received from share holders (capital) borrowed from account holders, and borrowed from other banks or corporates, then you are wrong.The accounting principal Assets = Capital + Liabilities still applies to banks.
Mrr T said:
Harris_I said:
This has the bizarre effect of a private sector banking system that literally creates money. The odd thing is very few people seem to recognise this as fundamentally unnatural. Even our own MPs incorrectly believe money can legally be created by the government alone (according to a poll conducted in 2014, 71% of them believed this - in actual fact 97% of money in the economy today is created by the banks, only 3% by the government). Only one in 10 MPs correctly understood that banks create new money when they make a loan. And 2 years ago, the House of Commons debated money creation for the first time in 170 years - and yet only around 30 MPs turned up. (There must have been a couple of hundred when they debated their own expenses!)
You may have worked in the front office of a bank but I am sorry you do not seem seem to know much about accounting. Maybe you just use terminology loosely. If you mean a bank can lend several times its capital, then yes you are correct. If you mean a bank can lend serval times the amount deposited with it by account holders, the yes you are correct. If you are saying a bank can lend money it has not received from share holders (capital) borrowed from account holders, and borrowed from other banks or corporates, then you are wrong.The accounting principal Assets = Capital + Liabilities still applies to banks.
Isn't he?
Harris_I said:
Mrr T said:
You may have worked in the front office of a bank but I am sorry you do not seem seem to know much about accounting.
Why be polite when passive aggression is so much more PH?And yes, basherX is correct.
Harris_I said:
I've spent over 2 decades in what the banking industry calls "front office" across a variety of asset classes (different types of financial instrument) but recognise the frustrations of guys like Fred. In a sense he represents the views of the 99%. Even though the nature of my job means I sit on the other side, the lack of willingness to engage in meaningful dialogue between the financial services industry and the general public leads to conversations like the car crash that this thread has turned into.
There's been plenty of willingness to engage in meaningful dialogue, just not with those who are determined to ignore what is being explained to them.Harris_I said:
Partly this is caused by a reluctance by bankers to speak plain English. We invent our own language and jargon to create a barrier, like priests speaking Latin. If we truly took an objective look at what our industry does, a reasonable person might reach the conclusion - as Adair Turner, the former head of the FSA did - that much of what the industry does is "socially useless".
Basic interest rate swaps have been explained in laymsn's terms yet the usual suspects continue to ignore what is being said.Harris_I said:
So when Fred rages against casino bankers, I think what he is really raging against is the disconnect that exists between what we might call the real economy and the financial economy.
Except the bank role in managing interest rate risk for different counterparties is a prime example of derivatives being used by banks to support the 'real economy'.Harris_I said:
And fundamentally this boils down to the nature of money itself: the whole world now views money as a commodity to be traded, something that itself has value, rather than viewing money as merely a medium of exchange or something that measures the value of real goods and services. As a result, not only can we create value out of intangibility (other people's debts can be bought and sold, derivative contracts can be created with the loosest of relationships with real underlying assets), but we have also created an economic system that allows banks to lend out multiples of what they have on deposit - something referred to as the fractional reserve banking system (since banks must keep on deposit a certain minimum fraction of money versus how much they lend out).
None of which has anything to with the main topic under discussion!Harris_I said:
This has the bizarre effect of a private sector banking system that literally creates money. The odd thing is very few people seem to recognise this as fundamentally unnatural. Even our own MPs incorrectly believe money can legally be created by the government alone (according to a poll conducted in 2014, 71% of them believed this - in actual fact 97% of money in the economy today is created by the banks, only 3% by the government). Only one in 10 MPs correctly understood that banks create new money when they make a loan. And 2 years ago, the House of Commons debated money creation for the first time in 170 years - and yet only around 30 MPs turned up. (There must have been a couple of hundred when they debated their own expenses!)
Not sure this a particularly helpful explanation!Harris_I said:
If MPs lack basic knowledge or interest in this subject, what hope is there of them preventing another house price boom or a second credit bubble?
I guess what I am saying is rather than attack Fred and others for "stupidity", far more sensible to recognise there is merit in his questioning the validity of our economic system.
No-one is attacking Fred for his 'stupidty', just his inability to recognise his lack of knowledge and consistently ignore what other people are saying when trying to help him.I guess what I am saying is rather than attack Fred and others for "stupidity", far more sensible to recognise there is merit in his questioning the validity of our economic system.
He is NOT asking sensible questions about the validity of the economic system, he is repeating nonsense about 'casinos' without understanding the first things about the topic and refusing to listen to the explanations being provided.
Edited by sidicks on Wednesday 28th September 14:52
Harris_I said:
I guess what I am saying is rather than attack Fred and others for "stupidity", far more sensible to recognise there is merit in his questioning the validity of our economic system.
I wouldn't hold your breath if you're waiting for a credible alternative. You're talking about Fred 
FredClogs said:
Why wouldn't that work, say (for the sake of argument) you could lift everyone below £100k out of tax by taxing income over £100k at 100% - would that really be so terrible?
Socialist are often accused of attempting to create utopias, I don't really see the harm in trying, it's surely better than not!
http://www.pistonheads.com/gassing/topic.asp?h=0&a...Socialist are often accused of attempting to create utopias, I don't really see the harm in trying, it's surely better than not!
It was your mate fblm who likened the banks to casinos, in response to me saying they were gambling. I said they were gambling in response to the explanation of what a derivative trade was, which is purpose of the thread to discuss DBs exposure to $75trillion of derivative trades.
I understand derivative trades and IRS and there is no way you can convince me its not gambling. It is gambling, most investments or pure monetary transactions are gambling.
I don't work in finance or banking, I am a layman, but i do have investments and also hold a fair amount of bit coin and have done my best to understand the economics of money creation because of my buy in to bit coin, i might not know the jargon but i understand the principles at play in the current capitalist banking and I'm pretty much convinced its just about gambling and has very little to do with providing investment for firms to create real wealth and provides very little value for society in general.
I understand derivative trades and IRS and there is no way you can convince me its not gambling. It is gambling, most investments or pure monetary transactions are gambling.
I don't work in finance or banking, I am a layman, but i do have investments and also hold a fair amount of bit coin and have done my best to understand the economics of money creation because of my buy in to bit coin, i might not know the jargon but i understand the principles at play in the current capitalist banking and I'm pretty much convinced its just about gambling and has very little to do with providing investment for firms to create real wealth and provides very little value for society in general.
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