As the attention of the world is drawn to Donald J. Trump as he slaps tariffs on countries like he's giving out candy on Halloween, something seems to be brewing over in Europe. More specifically in Germany, as the 10-Year Bund seems to be falling through a floor set in 2016. Hitting -0.20% as I type these extremely valuable words. And as Deutsche Bank, the 15th largest bank in the world by assets, sits by as it stock price hits lower and lower lows.
This isn't a great look for the Stalwart of Europe and its most reputable bank. Anyone who buys a German 10-Year Bund today is expected to lose money on that investment. Not something you want to see from the strongest economy in Europe. Deutsche Bank has ~$49TRILLION in derivatives exposure at the moment as its stock approaches penny-stock territory. This does not seem like a recipe for a stable short to medium-term in Europe and the highly interconnected global economy.
What happens if Deutsche Bank goes bust with that much derivatives exposure? How is that unwound? How are those counterparties affected? What is the domino effect that plays out?
Is DB too big to fail? Everyone I speak with seems to believe so. Uncle Marty thinks we're about to find out. And if they are TBTF, we're about to see QEinfinity go into full effect. The merry-go-round goes round and round.
... the Bitcoin mining hash rate looks primed to break through all time highs with authority. It seems as if people want to acquire digital apolitical money detached from the system that seems to be faltering at the moment.
I don't think I'll ever be able to love creamsicles as much as I did when I was six.
Enjoy your weekend, freaks.