Time to go there again, eh, dear worst-reader? I mean, I’ve dabbled in banking and finance krapp on this blog before. You know, dabbled, as in, from my couch. At the least, I’ve tried to comprehend what ultimately has become a casino madhouse free-for-all that is the current (mis)banking world. And where best to begin with that sort of rigamarole? That’s right, baby. It all begins in the land of my beloved & missed #Americant. The greatest land of… FREEDOM TO BE STUPID. On the other hand, there is also this thing with Germania. You know. Germany. My host expat country. Where Huns and their dachshunds romp gayly through mountain forests of yore singing… Lass uns bumsen.
On the other hand, if you can stomach it, I’ve attempted to comprehend the world of freaky finance here, here or here. Good luck with that.
With this worst-post, though, things are gonna be a bit different. It’s time to focus solely on… z’Germans. Namely. Deutsche Bank is once again having a new arsehole ripped through its innards by regulators and I don’t know whether to laugh or tickle my fancy till I puke rainbows. With that in worst-mind, here’s an excerpt from the motivating article that I’ve linked to at the end of this post. This is from a Deutsche Welle article where they concisely list seven or so Deutsche Bank Scandals. Here’s the scandal that interests me the most. Footnotes are from me.
Subprime credits1 are considered to be what caused the global financial crisis2. It was above all Deutsche Bank that bought up the poorly secured mortgages from US home buyers, wrapped them up in highly complex financial products, slapped them with top ratings3, and sold them on to other banks as secure investment products4. When the market collapsed, the bonds5 became instantly worthless.US Mortgage Transactions, source: see link below
Meanwhile, internally, Deutsche Bank had long bet on a crash — and made a lot of money doing so6. In 2013, the bank was given a first penalty; it had to pay $1.9 billion to then-nationalised US construction financiers Freddie Mac and Fannie Mae7. The bank agreed on a settlement with US authorities in 2017. Initial talks were of $14 billion, equivalent to financial ruin for Deutsche Bank. In the end, the bank paid $7.2 billion8.
I’ve been trying to understand this krapp for years. Quite an entertaining endeavour, don’t you know. Reason for my efforts? Well, get this. I think there’s a conspiracy afoot. And when I say conspiracy, I don’t mean conspiracy-theory. In fact, I sometimes stop what looks like a banker in the streets. I compliment him on his fancy snake leather shoes and matching belt and then reassure him I’m not a fag looking for a quickie. Then I ask:
There’s a bit of here & there as the banker adjust his tie and belt and then begins to take a defensive posture against the Ausländer talking $hit about his number one national bank.
The thing is this, dear worst-reader. I’ve suspected for years that the reason Deutsche Bank is in so much trouble is due to 1) historical circumstance and, perhaps, 2) geographic location (which amounts to it not being in London or NYC). And so. There are powers-that-be who think the bank can be used as a patsy–in the middle of #Eurowasteland. The problem is, Germans don’t make good patsies. Or do they?
Again, because of its historical circumstance, DB would gladly be a player in the Anglo-casino game. But like any capitalist pig, it would be willing to lose only so much. That said, it participated in the casino free-for-all that took place in my beloved & missed post cold-war #Americant–with only its investment banking entity. As noted in the excerpt above, that entity won bigly. When the subprime crash hit in 2008, it was time to cash in its casino chips. Of course, the Anglo bankers didn’t like what they saw. Namely, when the casino bell ended all bets, the Germans were standing there with all the chips, or at least a lot of them. The losers, as mentioned in the excerpt above, where organisation like Freddie Mac and Fannie Mae and who knows how many more–to include, I’m guessing, a few large American banks. I suppose, under normal circumstances, things would have worked themselves out. But circumstances are/were not normal. Remember: Freddie Mac and Fannie Mae had to be taken-over by the US Government. In other words, the casino changed the rules. Instead of the US Government having to bail-out even more banks, it simply found a way to prevent all chips from being cashed.
Let me try to put that another worst-way. And keep in mind, this is purely worst-writer speculation and I ultimately have no idear what I’m writing about. #Nomatter.
There’s a reason that when you go into a casino you have to bet with chips. You go to the casino bank, give them your (real) money, they give you the chips. You then go around the casino and play whatever game you like, betting with your chips. You play blackjack, credit default swaps, craps, subprime mortgage blah, blah, etc., etc. When you’re done playing, you take all your chips, if you won, back to the casino bank and cash-in. In Deutsche Bank’s case, the casino (Wall Street) simply never let it cash-in its chips. And so. That makes me guess (speculate) that Deutsche Bank’s wrong-doing is a cover-up. It’s not a cover-up for the gambling, though. No. It’s all about covering-up, protecting, an insolvent American banking system–that no longer has enough money to cover gambling chips. It’s really that simple, dear worst-reader. DB won so much as the subprime casino crashed that it couldn’t get any money out of the casino bank–because there was/is no money there. Of course, the real joke is: all of these fines DB faces are literally taken out of the value of the chips that were never cashed in the first place.
Or maybe not.
Rant (and couch bank) on.
Link that motivated this post:
- A relevant article day after posting.
- Why would they use this terminology? Everyone knows that it was referred to as “Subprime Mortgages”. ↩︎
- Really? That was it. Subprime… and nothing else? ↩︎
- Deutsche Bank cannot and does not issue securities ratings. ↩︎
- Another sucker bought them, right? ↩︎
- Did they sell credits, bonds or mortgages, default swaps, etc.? ↩︎
- Oh really. ↩︎
- And what if these were the guys that sold the securities in the first place to Deutsche Bank with/at too much risk? ↩︎
- Again. If DB won the bet, how much did it make? ↩︎