Deutsche Bank criminal probe

[mgray]

The German international bank is under a years-long investigation by Interpol, I am told by multiple sources.

This criminal probe dates back to former chairman Josef Ackermann and involves looking into two "suicides" by high-level execs at the bank and its subsidiary.

One of the deaths I am told involved an exec looking to be whistleblower.

I delve into this probe here and here.

[ramus]

THANKS FOR THE INFO .... THE BANKS ARE THE CROOKS .... LIBOR WAS PUSH UNDER THE RUG ... THE BIGGEST THIEF IN THE HISTORY OF THE WORLD

Libor underpins approximately $350 trillion in derivatives. 17 TRILLION WAS THE AMOUNT THAT WAS STOLEN ......> Robert Holmes: jamesholmeswiki.com
>
> Job Occupation. Senior Lead Scientist at Fair Isaac. He spent his entire life
in the financial and credit services. His educational background shows
exceptional emphasis on Mathematics. He has an extensive educational background.
It is reported that he was about to go before Congress to testify against a
banking scandal. Robert Holmes current position with FICO involves him handling
Fraud.Now for those of you who don�t know FICO is a company that gives credit
scores to Businesses and individuals. These credit scores helps Banks and others
make complex decisions that involve investing. They come up with these credit
scores and ratings by doing extensive analyzing and research. Then FICO provides
this information to large companies.
> Prior to Robert Holmes career at Fair Isaac he was developing Software. He was
the Senior Staff Assistant at HNC Software. He worked there for two years. This
company�s purpose is to provide different businesses with solutions to create
growth and increase profit. The software that Holmes developed at HNC compiles
research and data. With this information it helps the executives at major
companies including retail create plans that will help their service, customer
satisfaction and more. Robert Holmes describes his special emphasis on research
and analysis that he has developed over his years of work experience.
>
An interesting connection has emerged with the recent Colorado �Batman�
shooting. Alleged gunman James Holmes� father is/was set to testify regarding
the LIBOR banking scandals.

[ThePythonicCow]

Posted by mgray (here)
The German international bank is under a years-long investigation by Interpol, I am told by multiple sources.

Thanks for the scoop, mgray ... very helpful.

[ThePythonicCow]

Posted by mgray (here)
The German international bank is under a years-long investigation by Interpol, I am told by multiple sources.

This criminal probe dates back to former chairman Josef Ackermann and involves looking into two "suicides" by high-level execs at the bank and its subsidiary.

From your blog post:

the liquidity question was put forth to get people off the trail of the full-blown criminal probe, which would shut the bank down as EU regulators would be forced to charge DB as a criminal operation.

That Deutsche is being investigated for multiple serious fraudulent and criminal operations does not surprise me ... Jim Willie, whom I read and listen to regularly, says pretty much the same.

But I am surprised that just being charged with such actvity would shut a bank down. Wouldn't they first get a chance to defend themselves and bargain over the resolution?

[mgray]

When a bank is formally charged with multiple criminal fraud charges, its regulators need to cease the bank's operations in those areas. It's a death sentence for the bank. Civil suits can be settled without admitting guilt, criminal suits can't be settled or pled down.

[ThePythonicCow]

Posted by mgray (here)
When a bank is formally charged with multiple criminal fraud charges, its regulators need to cease the bank's operations in those areas. It's a death sentence for the bank. Civil suits can be settled without admitting guilt, criminal suits can't be settled or pled down.

That is what surprises me. I thought that filing criminal charges did not force any particular resolution, yet. I thought that criminal charges could be dropped, pled down, or fail to provide a guilty verdict. Moreover, I thought that in the case of banks, the regulators were not, de facto, forced to any particular action.

For example, if I had more political connections than I do, I suppose that I could be charged with the first degree murder of several people, and with a good lawyer, end up pleading guilty to manslaughter of just one person, having the other charges dropped.

For a more relevant example, don't we commonly see investigations of bank fraud in the US that conclude with paying a fine, for some vaguely specified subset of whatever was being investigated, and with no admission of guilt? Basic idea: bank steals a trillion dollars, and after a few year investigation, pays a fine of a billion dollars and the case is closed.

If I knew going in that I could steal serious money, and only have to have the business that employs me pay 0.1% fine, perhaps, and years later, with no prison time or even personal charges against me, then only my personal morals would stand between me and being much richer than I am. As we all know, the top executives in most of these banks do not suffer from a surfeit of personal morals.

===

Separate point: I suspect that the risks to the banking system, in particular to the major Western banks, are not just a matter of this purported fraud by Deutsche Bank.

I suspect that:

• Many of the Western banks are or will be soon under deep distress from (1) failing national debt, such as Venezuela, Italy, or Portugal, (2) holding difficult positions in various interest rate derivatives, forex derivatives and oil hedges, and (3) an inability to make money "the old fashioned way", by lending it, due to the combination of a weak global economy and near zero interest rates.
• Many of the Western banks are "lashed together", deliberately, through hedges on their positions that depend on the other banks to pay off. If Deutsche Bank, or any other one major Western Bank goes down, then this very rapidly exposes their counter-parties to extreme stress, knowing that they have to mark down some positions that depend on Deutsche Bank being solvent.

Yes, I've little doubt that Deutsche Bank is being investigated for seriously fraudulent activities.

Yes, clearly any such investigation is being kept secret.

But I suspect that the secrecy is motivated not so much by a "simple mechanical" problem that the mere announcement of such investigations, or even the filing of charges, forces any particular immediate shutdown by the regulators.

Rather I think it is a matter of confidence. If Deutsche Bank's credit default swaps balloon out of shape, as indeed they are starting to do, then it becomes increasingly difficult for them to hold and fund positions, due to others charging them more on account of the increased counter party risk. Neither Deutsche Bank nor the other major Western banks to which they are lashed have any desire to see this happen.

===

Rather than some announcement of these investigations being the real trigger event, I suspect that either the default of a major national debt, that is too large to paper over with further austerity and confiscation measures such as we saw with Greece, and/or the collapse of a major Western bank, due to the "deep distress" factors enumerated above, will be a key trigger, followed by a major banking collapse, thanks to them all being lashed together and all being under the same major stress factors.

On the other hand, some such announcement of a Deutsche Bank criminal probe might be made to appear as a trigger event ... as a way of passing the blame. There will be an over-abundance of finger pointing if such a collapse comes to pass.

[mgray]

A criminal conviction -- even if the pleads it down -- means the bank loses its charter as a bank. It is labeled a criminal enterprise and all the banking regulators from SWIFT on down pull the bank's charter to operate. Close the doors it's over.

Yes if word leaked widely that DB was the subject of a criminal probe the counter-party risk would be tremendous. Lehman Bros. would look like a small savings & loan bank in Oklahoma went out of business.

Although it seems impossible to "unwind" DB's positions in the derivative markets, a Greece default, which is again on the front burner, could be used as a trigger to unwind DB without admitting announcing a criminal probe.
But that unwinding, would cause great pain across the globe. Far worse than 2008.

For that reason, I think this will be swept under the rug.

[DNA]

Not to derail the thread by being "that" guy.

But,,,

I'm reminded of the Kerry Cassidy interview with Mark Richards, in which Kerry echoes Richard"s words that many of the high profile banker "suicides" are due to the suicide to be banker becoming aware of "off world" deposits being made in really large amounts in said bank. At the time she seemed to be talking about the beings from Aldeberan, and talking about a mass influx of these beings moving into Africa no less.

[ThePythonicCow]

Posted by mgray (here)
A criminal conviction -- even if the pleads it down -- means the bank loses its charter as a bank.

A conviction ... yes ... I'll accept your word that a conviction could/would cost a bank its charter.

But I thought that "filing charges" or a "formal charge" was not the same as "a conviction".

[mgray]

The sniff of scandal with a criminal indictment is enough to jeopardize the bank's future.

[Pam]

Posted by mgray (here)
The sniff of scandal with a criminal indictment is enough to jeopardize the banks future.

If the bank does fall, can you give us a brief description of the aftermath. How would this likely play out?

[mgray]

Each market would crash is probably the simplest way to put it. Germany enters a depression hours after announcement the world follows as markets open around the world. It's really a cataclysmic event.

It would have to be announced at 4:01PM in the US on a Friday to give time to develop a plan before Asian markets open on Monday morning. And even that would not stem the reaction.

This event could usher in a global bank holiday for an extended period of time.

Peter, to put it simply, it's not something anyone would want to see.

[Wide-Eyed]

Posted by DNA (here)
Not to derail the thread by being "that" guy.

But,,,

I'm reminded of the Kerry Cassidy interview with Mark Richards, in which Kerry echoes Richard"s words that many of the high profile banker "suicides" are due to the suicide to be banker becoming aware of "off world" deposits being made in really large amounts in said bank. At the time she seemed to be talking about the beings from Aldeberan, and talking about a mass influx of these beings moving into Africa no less.

https://youtu.be/N3vB92Pw1SQ- More problem, reaction solution... control push for consolidation. Germany and France calling for this is another problem that they have solution for so it's easier for Amerika to deal with push this type of reform talked about by Dr. J Farrell in vid chat. or this by Farrell commenting on the hidden system of finance since WWII brought up here and by comments by DNA. http://gizadeathstar.com/2015/10/did...em-of-finance/

[ThePythonicCow]

Posted by mgray (here)
Peter, to put it simply, it's not something anyone would want to see.

Well ... the whacko conspiracy theory nut job lobe of my brain figures that there are a few who do want to see this .

[Hervé]

Keiser: Deutsche Bank ‘technically insolvent’, running a ‘ponzi scheme’

Published time: 14 Feb, 2016 22:10
Edited time: 14 Feb, 2016 22:20

© Luke MacGregor / Reuters

Max Keiser hit out against Deutsche Bank in the latest episode of his RT program Keiser Report, saying the bank was “technically insolvent” despite assurances from German Finance Minister Wolfgang Schaeuble that he had “no concerns” over his country’s biggest bank.

Deutsche Bank shares are down 40 percent since the beginning of the year, falling below their price at the time of the 2008 financial crisis. The bank suffered record losses of €6.8 billion in 2015.

With a balance sheet now eclipsing JP Morgan’s, Keiser warned that the bank will sooner or later have to admit to insolvency and say “we need either a huge bailout or we gotta close up shop.”

StockTwits ‏@StockTwits

The Deutsche Bank crash just got historic. THIS happened today. $DB: http://stks.co/f3uTh 3:07 PM - 9 Feb 2016

However, German Finance Minister Wolfgang Schaeuble dismissed concerns over Germany’s biggest lender, telling Bloomberg he was not worried about its future.

Deutsche Bank CEO John Cryan also played down the concerns in a published letter to staff on February 9, describing the bank as “absolutely rock-solid” and “strong”.

“On Monday, we took advantage of this strength to reassure the market of our capacity and commitment to pay coupons to investors who hold our Additional Tier 1 capital,” Cryan wrote. “This type of instrument has been the subject of recent market concern. The market also expressed some concern about the adequacy of our legal provisions but I don’t share that concern. We will almost certainly have to add to our legal provisions this year but this is already accounted for in our financial plan.”

The bank’s contingent convertible (CoCo) bonds also plunged in value this year. CoCo bonds are designed to be converted to equity when the bank gets into trouble. They have no maturity date and come with no promise to investors that they will get their money back.

Bloomberg Business Verified account ‏@business

What you need to know about CoCo bonds, the bank debt everyone is talking about http://bloom.bg/1pxCzso

Coupon payments on the bond are contingent on the bank’s ability to keep its capital above certain thresholds. If the bank does not make a coupon payment, investors cannot call for a default.

Deutsche Bank said last week that they would likely be able to make its coupon payment for 2016, after telling investors last month that it couldn’t make its 2015 payments.

Keiser described the move as a ponzi scheme saying, “You can’t just miss coupon payments. It’s called insolvency.”

[ThePythonicCow]

Posted by Paul (here)

Posted by mgray (here)
The German international bank is under a years-long investigation by Interpol, I am told by multiple sources.

From your blog post:

the liquidity question was put forth to get people off the trail of the full-blown criminal probe, which would shut the bank down as EU regulators would be forced to charge DB as a criminal operation.

I should have mentioned this earlier, but I do not agree that "the" reason that the question of Deutsche Bank's liquidity is being raised is because of these criminal probes, or leaks about these probes.

I figure that Max Keiser is right (see Hervé's post, just above), and that there actually is a serious liquidity problem with Deutsche Bank's liquidity.

From what Jim Willie says, and on these sorts of matters, his intel is usually pretty good, Deutsche Bank is the largest holder of derivatives in the world. If enough of these positions go the wrong way, and/or if enough of their counter-parties aren't good for the money, then Deutsche Bank is indeed bankrupt, and we're just waiting for the world to be notified.

If this is so, then I doubt that they make rugs big enough to sweep this under, especially since most of the other major banks are mired in the same muck.

[mgray]

Paul, I did not say there were not liquidity problems. I said the reason for the liquidity problems was that certain counter-parties are hearing about the criminal probe and are pulling back from doing business with DB.

I said the press is saying it is just lack of liquidity without knowing the underlying cause. The rise in DB's CDSs are bets it won't survive the criminal probe.

[ThePythonicCow]

Posted by mgray (here)
Paul, I did not say there were not liquidity problems. I said the reason for the liquidity problems was that certain counter-parties are hearing about the criminal probe and are pulling back from doing business with DB.

True, that's what you said, and I wrote inaccurately.

What I am figuring is that the reasons for the liquidity problems is not, primarily, leakage about the criminal probes.

I am guessing that Deutsche Bank would have similar liquidity problems even if all the criminal probes had been called off, entirely, long ago, say by some well placed "God Father" in high places befriending them.

Their books, especially their derivative books, I'm guessing, suck big time.

[lucidity]

If Deutsche Bank fails, people will say in the future, that the fall of
Deutsche Bank was the trigger that started the "European depression".
The fall of Deutsche Bank would collapse the other banks, especially the French banks,
which in turn burn down many thousands of businesses across Europe.

They wont let that happen.
There will be another round of "Too Big To Fail" Quantitative Easing.
It's a game of "Let's give them lots of money" And erode the Euro and everyone's (euro) savings.
If you listen very carefully, you might just about hear the sound
of European pensions being flushed down the toilet.

Some fudge will likely be worked out.
The bank will continue with a new management board.
Or some senior bankers will ... be spoken to harshly... perhaps with fingers waved.
(Murder and theft will send you to prison in most parts of the society .... but not banking)

I wonder what the Greek for Schadenfreude is ?
Well, at least the poor people of Europe will be laughing and dancing.

On the brighter side, the NWO 'European Project' is probably dead now.
That's a strike to the homo sapiens.

Last year, legislation that was put in place in various european countries
allowing them to raid private bank accounts and subject them to a 'haircut'.
This is the Cyprus style money grab, of regular people's savings.
That legislation will kick in now. They've pre-planned for this.

Does anyone want to pop a guess at how high bitcoin is going to go ?
The price was $380 yesterday. Checking just now it's $408.
Saying bitcoin will go to 500 isn't much of a prediction.. it's en route anyway.
My safe bet is bitcoin hitting $1000 before the end of 2016.
My riskier bet is $2000 before the end of 2016
I sense it will reach up to $1500 this year.

Now would be an epic time to buy bitcoin, or better yet, litecoin.

be happy

lucidity

[ThePythonicCow]

Jim Willie opens his monthly interview with Paul Sandhu with some comments on Deutsche Bank:

Source: https://youtube.com/watch?v=skej-z9UaF4

Nothing here that will change the views of either myself, or mgray ... but some more "color commentary" and a few more details, for those who enjoy listening to Jim Willie of http://goldenjackass.com/

Here's the portion of the Youtube description that covers this portion of the interview:

1) Deutsche Bank collapse and possible contagion

- Credit Default Swap soaring from 90 in Dec to 120 in Jan to 260 in Feb
- near total collapse of DBank stock mimics the Lehman Brothers path
- in deal talks with Venezuela on gold swap (signal of Saudi demand in repatriated gold)
- told in 2013 of likely breakup of DBank into 7 entities (NEVER HAPPEN)
- DBank acquired Bankers Trust in 1998 from Wall Street site, as derivative shop
- could serve as the major bank sector fuse