...OH, AND ABOUT THOSE DEUTSCHE BANK DERIVATIVES...

…OH, AND ABOUT THOSE DEUTSCHE BANK DERIVATIVES…

In last Thursday's News and Views from the Nefarium, I talked about the strange behavior of Germany's largest, and one of the world's largest, banks, Deutsche Bank. Then I pointed out the strange behavior of the bank both in deny gold deliveries, and in the fact that it had finished and published a study questioning the overvaluation of stocks on the Standard and Poor's index, and casting the blame for that over-valuation on central banks, namely, the US Federal Reserve. Well, while you're pondering those wrinkles, consider this article from our friends at The Daily Bell, shared by Mr. S.D.:

Why Is Citi Gobbling Derivatives?

Now here's the crux of the story:

The bank in talks to buy the Deutsche Bank derivatives is Citigroup Inc. according to this article. Well written and focused, it asks why Citi would buy more derivatives when last year Citi purchased $250 billion from Deutsche Bank.

The idea is that Wall Street is simply too greedy for its own good and that this greed can rob bankers of perspective.

Citi is making deals because it can make money and damn the consequences. We’re not quite sure this interpretation is the correct one, as we’ll show in a moment.

Certainly, Citi’s actions don’t make much sense from a longer-term perspective. Most banks are trying to downsize. For instance, Credit Suisse Group AG just sold $380 billion of derivatives to … Citigroup! And this does seem strange, as Citi “nearly destroyed itself” with derivatives in 2008.

So why is the Citibank group negotiating with Deutsche Bank to buy derivatives from it, the very derivatives threatening the German banking giant? The Daily Bell offers its own high octane speculation here:

And within a larger context these banks are in some sense an extension of the US government, and certainly of the Federal Reserve.

Is it possible the US government and the Fed are using Citi as a stalking horse to gather derivatives contracts?

If these derivative relationships are jeopardized by a market event, or even by a serious crash, could the Fed can step in and print the money necessary to stem the proverbial tide?  The dollar remains the world’s reserve currency, after all.

And isn’t this in a sense what Ben Bernanke did when he sent $16 trillion around the world in 2008-2009 to ensure there was no larger collapse of the entire financial system (here).

The more derivatives owned by US banks, the more control presumably that the Fed has over the market. Perhaps it can create solvency for some participants while leaving others out, as it did during the throes of the financial crisis when it salvaged Merrill Lynch but sank Lehman Brothers.

In other words, if there are all those derivatives out there - and let us remember it was largely reckless regulatory policy under the Clinton administration that made the mess possible - then it's best to "bring them home" where at least they can be more carefully controlled. And perhaps, just perhaps, this might even be being done in advance of a "jubilee" of sorts, a write down of all that bad paper.

Well, perhaps.

But from my point of view, the other equally interesting part of this story isn't the Citibank end of it, it's the Deutsche Bank end of it, which brings us to our high octane speculation. For if the move does represent an attempt by the US government and the Federal reserve to use Citibank as a "stalking horse," then it takes two to tango, and Deutsche Bank, as a large foreign bank with big exposure to derivatives, is apparently willing to dance.

The question is, why? And my high octane speculation of an answer says that it wants out of the derivatives mess to the same degree that Citibank wants in it. And that means that Deutsche Bank may know something. And the indicators are that that something may be a "haircut", a "bail in," and Deutsche Bank is bailing before it happens. Or, to put this in Catherine Austin Fitts' terms, Citibank, if acting like a stalking horse for derivatives, is bringing all that bad paper and debt back home to the USA, and foisting it on the American people: the assets are being privatized, and the liabilities are being moved to the public. And Deutsche Bank is perhaps saying better the those liabilities be foisted off on Americans, rather than Germans.

See you on the flip side...

34 thoughts on “…OH, AND ABOUT THOSE DEUTSCHE BANK DERIVATIVES…”

  1. I can see DB blackmailing their way out of their bad paper (ratting out the others in gold/silver) but how does Credit Suisse Group AG get their bad paper bought out? What dirt do they have?

    Next question that comes to mind is how much is Citi paying? 20 cents on the dollar? Settle for 30 cents from the gov and make 10 while claiming a loss of 70 for tax purposes? Hmmmm. Gotta get me some of this action.

    1. For the probable truth on “how does Credit Suisse Group AG get their bad paper bought out,” I would go back in history. The Templars (The Poor Fellow-Soldiers of Christ and of the Temple of Solomon) had some interesting founders:

      “The original order consisted of Hugues de Payens and eight knights, two of whom were brothers and all of whom were his relatives by either blood or marriage: Godfrey de Saint-Omer, Payne de Monteverdi, Archambaud de St. Agnan, Andre de Montbard, Geoffrey Bison, and two men recorded only by the names of Rossal and Gondamer. The ninth knight remains unknown, although some have speculated that it was Count Hugh of Champagne himself… The Order’s efforts were helped substantially by the patronage of Bernard of Clairvaux, the leading churchman of the time, and a nephew of one of the original nine knights.” (Wikipedia)

      Somehow, these folks had the ‘oomph’ to go directly to the King of Jerusalem, and get assigned ‘quarters’ in Solomon’s Temple. They proceeded to dig for eight years, found something, and returned to the West. One might speculate that this specific info indicated they were of Judaic ancestry, or had patrons who were…

      After the Templars became a great banking empire (where have we heard that before) and were subsequently overthrown in France, one exile-group likely settled in pre-Switzerland. Armored, trained knights then backed the local pre-Swiss in battles which fended off outside forces and led to the formation of Switzerland.

      Shortly after that, the banking industry rose and flourished in Switzerland – and achieved fame for its secrecy. So, present-day Switzerland is likely a ‘partnership’ of local Swiss and Templar families.

      This background probably led to the location of banking’s ‘Jerusalem’ – the Bank for International Settlements (BIS) – in Basel. “The Bank’s capital is held by central banks only. Sixty central banks and monetary authorities are currently members of the BIS and have rights of voting…” (bis.org)

      With all of the above, you can probably ascertain that the folks who control Credit Suisse Group AG are probably deep within the world headquarters of banking. Whatever they want, banking presidents will jump to do…

      1. goshawks – good stuff, but someone posted two weeks ago, i think here i found it, on greenlandtheory, which if read, would put the templars into a wider context.

        it seems, the underworld was disclaimed of sorts by the romans and they left the only cohesive group they could trust to manage the ewe, or yoo…or youse…the sheeps…that the roman shephards saw themselves as “managing HUmanely” 🙂

        anywho – the templars were given the power that only the jews had (as the only non christians in the newly christian empire!)- usury power! within a century they became the preferred lender within the underworld mgmt company (call it nwo or whatever it matters not when u COMPREHEND greendland theory)…

        remember farrell showed us not a piece of property was seized by the french king when De Moley and co were man-napped…and why was it seized? b/c the templars did something the jews never did – saying “NO LOAN FOR YOU” to rolling the monarchs loans! on top of that, the templars, within a short one hundred years (if history is believed – its not) they became a military industrial banking shipping empire…what did they do with all that time and money!?

        THEY EXPLORED THE MAP! They find north america at least a few decades, if not centuries before the jesuits (and gloated by surveying the four corners area onto the the dome of the rock to prove the bible prophecy of new world etc)…as one mid level templar told me only a few months ago (32nd) – they never went bankrupt and were never seized – they formed new management company (aka “went private”)…

        ultimately they went to the Holy Roman Empire (mgmt company) and made the Don an offer he couldnt refuse which ultimately got all of europe on board to pivot west for the grand public spectacle ala christos columbus…

        it seems, if you watch old tv, up until “cold war”, the domestic public information was incredible in the knowledge shared ala north american giants and 5000 miles beyond both poles claimed by military intelligence (which is all public info) – yet today, none of this is common knowledge…you can u tube the admiral byrd televised cbs news special talking about the land beyond the poles…

        1. While the Templars were indeed explorers, I wanted to reply directly to TRM’s question: “How does Credit Suisse Group AG get their bad paper bought out? What dirt do they have?” Unlike Deutsche Bank, which probably does have dirt on the Fed, Credit Suisse Group AG lies in the heart of the evil empire. They did not need dirt; they had raw power behind them…

          You made a good point around usury: Christians were not allowed to charge it. Only Jews. I am not sure whether the Templars were allowed to directly-charge usury, but ‘transaction fees’ accomplished much the same purpose. The key was to get vainglorious kings to go to war with each other and run-up debt. (Sound familiar?) Debt is Control…

          By the way, the Templars were latecomers to North American exploration. The Vikings had explored at least down to New England area, hundreds of years before, and those records were probably not lost to those in power. Also, the Chinese under Admiral Zheng He may have traveled near-globally, if Gavin Menzies’ analyses have merit. This includes possible contact with Venice itself…

      2. Bernard was much more than a church man. While in his mid 20s he purchased the failing Abbey at Citeaux (Cistercian) and turned it into a profitable operation and by the time he died in his late 50s/early 60s had established over 300 Cistercian Abbeys. The middle age capitalist made a great deal of money from sheep and wool and from farming, cheese making and so on. He was very influential in selecting the popes and housed several Hebrew scholars in Clairveaux not to mention being the philosophical and theological force behind the Templars. Look back to the Essenes and Theraputae and beyond for more answers. Dr. Farrell has touched on this a bit in one of his books. And oh, the Templar families no longer control Swiss banking. They were pushed out many years ago by the same control freaks that rule the present day banking system but they are underground and trying to come back in many ways. The odds aren’t great though. db

        1. Don B, thanks. I had read-up on Bernard of Clairvaux, and considered him an ‘insider’. Just too much going-on around him…

          I had wondered about the ‘intersection’ between (true) Templars and the subsequent usurious banking system. That was what I was afraid would happen. Do you have any good source-material for the ‘takeover’ maneuvers?

    2. When I first read this entry, it occurred to me that Citi, a bank that has been struggling to keep up, is being “fed” or, better, “Fed” money as a set up for a big take down, a la Bear Stearns. Once this happens, since they have “absorbed” all this derivative exposure, We the People, will be asked to start the bail out only to have Citi be the sacrificial lamb while propping up the likes of JP Morgan, Bank of America, et al. Like the mortgage fraud scheme, they will be able to “write off” massive amounts of these derivatives. That is my high octane speculation… and my late husband worked independently on Wall Street but “through” Bear Stearns… so I “get it”.

      1. Yep, that’s the way I see it coming down. The way the 0.01%ers work, this ‘distraction’ will be used to cover other dastardly deeds.

        (Remember how the Pentagon ‘crash’ was used to cover the theft by Dov Zakheim of more than $2 trillion in Pentagon funds? Donald Rumsfeld had announced these funds had gone, and then the budget analysts responsible for tracking these funds down were killed in the exact Pentagon attack area.)

        1. Exactly. I have looked for her quote without success but CAF has told of the same thing happening when mortgage fraud was suspected and HUD planned an audit at the offices which just happened to be in Oklahoma City. Timothy McVey and company, explosion, and voila! No records. Lots of distraction.

    3. TRM
      It’s crisis by design.
      Just as the banks were rolled up by the central banks; the central banks bad dent will be rolled up by the SDRs.
      And the cycle of kicking the fiat can down the road to hell continues…

  2. DB & Citibank, you cant make this stuff up. And then throw in the Fed who controls just about everything and you have a global money rort of enormous proportions. I wonder what the bank of International Settlements has to say zzzzzzzzzzzzzzz.
    Does the bearer bonds fit in here? I dunno, all’s I know is that there is something nasty going on here and I would not be surprised if Goldman Sachs is a silent partner in all of this ??????

  3. I would tend to see another “too big to fail” moment coming-down-the-pike soon. Watch for the American public again to be asked to bail-out Wall Street (the 0.01%ers). I believe the popular (and accurate) phrase is “privatizing gains and socializing losses.”

    Deutsche Bank may have a stranglehold on the Fed (and therefore Citibank):

    First, there is the matter of the non-payment of the requested gold by the Fed. DB could ‘agitate’ around that matter, potentially bringing the Fed’s gold-situation to public eyes.

    Second, Germany is where the Bauer family fortune originated. I would expect family holdings to be high in DB, and that clan’s financial-power could be brought-to-bear to force the derivative transfer.

    And third, DB is the ‘key’ to European banking. If DB goes down, the derivative ‘cancer’ might quickly metastasize to all of Europe and be uncontainable by the time it washed-up at the Fed. The clan might know this, and be forcing the derivative exposure to the country where the money printing-presses are.

    All of this amounts to woe for the American people… (A jubilee aside…)

  4. The pigeons are coming home to roost and now the ultimate trophy, the USSA “Homeland” has been put into play. This means, in a nutshell, that the Soros Gollum and the rest of the Globalist/NWO/ZioCon parasites have completely laid waste to all the outlying vassals and are falling back to the center, to eviscerate and feed off the host.

    They’re destabilizing the elections, they’re making Goebbels blush with the USSA MSM, and the ostensible US government is a global joke, which everyone is happy to sneer at.

    So, what color/flavor of revolution will the US takedown be remembered by?

  5. As per friend Webster Tarpley & others, there are/were +/-1,500 Trillion U.S. Dollars in financial derivatives ‘out there’ — much unregulated.

    $1,500 Trillion may seem like a lot, and it is. However, financial derivatives are bet-hedging tools, held in so-called “derivatives swap books” in which liabilities accrue only when the swap book becomes “unbalanced.”

    If banks bet on the real estate market, and if real estate does crash or rise too much, then banks & others have very little exposure and lose little money.

    When the real estate fan hit the sheep in 2008-2009, U.S. taxpayers paid US$1+ Trillion to cover the banks’ bad bets; and the Federal Reserve issued new U.S. Dollars to cover the balance.

    If U.S. Treasury and the Fed can many if not most financial derivatives in one banking house, then Fed/UST may do something similar to make many if not most derivative just go away. Very difficult. Fitts may know how to do this.

    1. Edits/Corrections:

      “… if real estate does NOT crash or rise too much…”

      “If U.S. Treasury and the Fed can GATHER many if not most…”

    2. I’m sorry but Tarpley’s gone full nutjob IMHO and rants and spews propaganda with the best/worst of them.

      I loved the work he did on the Bush Family Crime Syndicate, but the last time I checked in, I was simply appalled by the incessant agitprop. He is simply no longer to be considered a rational analyst and his “analysis” cannot to be trusted.

        1. My sentiments exactly. Out of curiosity what sort of time span are you anticipating re negative interest rates before the bail ins begin? They’re not in play across the board yet but are edging there.

    1. I agree that they have scripted this for a while and telegraphed it to anyone who was paying attention. The problem I have is that SDR or even gold backed fiat will still be subject to rehypothication, derivatives, fake collateral inventories, etc.

      An SDR system via SWIFT will be just another Ponzi.

  6. The Bozzos and junkies are it again creative accounting and cooking the books. To them the world is a game board-video game for their sick entertainment and greed. As long as they can spend money and buy their overpriced toys what do they care the rest of us go to hell.

  7. For all intents and purposes, the USSA is now a third world country behaving like a superpower. Sooner or later someone is going to call that bluff. The intentional destruction of America is almost complete, all that remains is this. That gigantic sucking sound you hear in the background is the elite gathering all that’s left from you and I; and they got it all for worthless paper and a promise to pay which will never be realized.

  8. I have a different take on this. Remember a few months back the Fed and the banks held an emergency meeting at the White House. Right after this the Fed made an announcement that they were placing a 48 hold on foreign entities confiscating any US banks assets and then you had Citi and other US banks purchasing derivatives from Deutsche. This could only mean that derivatives underwritten by US banks were about to be triggered and in fact the US banks would owe Deutsche and Deutsche was about to confiscate assets so they bought back the derivatives sold to Deutsche in effect cancelling them. The derivatives held by banks are bilateral agreements and don’t trade on exchanges but on private dealer networks unlike other derivatives like options, futures, forwards and equity indexes. The private dealer networks have much less liquidity and are much harder to get rid of than those that are trades on exchanges where there is a much larger amount of liquidity. Then of course right after this you had all the negative news come out pertaining to Deutsche and US hedge funds hammering their stock lower.
    Just food for thought!

  9. Does the USA have “bank bailin” legislation? As of this past spring we now have it in Canada and nobody knows about it. Nor do they understand what it means when told about it…all I get is a blank stare.
    Former prime minister harper wrote it up and the current prime minister trudeau dotted the I’s crossed the T’s then rubber stamped it.
    By the way, the current finance minister in the current “left wing” government used to be the president of the CD Howe institute a “right wing” think tank. There’s only one political team in Canada and the common taxpayer hasn’t been invited to join.

    http://www.therebel.media/handsoffmymoney

  10. In Europe small savers have been quietly turning to gold. When the gold price first reached record highs in dollar terms around 2012, “used gold” dealers’ shops popped up in cities and towns all over the continent, and lots of people sold off their jewellery items, perhaps hoping to compensate for the economic crisis. Many of these outlets have closed, but of course the crisis is still ongoing. More recently, investment coins issued by entities like the UK Royal Mint, the Austrian Mint and others are apparently being snapped up as fast as they can be produced.

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