Discussing Deutsche Bank and Derivatives with Denver Dave

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With the news of the massive writedowns, losses and other issues at German banking giant, Deutsche Bank, I thought it best to ring up our pal Dave Kranzler in order to see what he makes of it all.

If you missed the story over the past 24 hours, here are two links from ZeroHedge that summarize things:

And here's something that Dave wrote this morning before we spoke:

You might also see this:

And this, written four months ago at a site called NotQuant:

Please take the time to listen to this brief discussion and then consider the implications that a meltdown of Deutsche Bank might incur.



Turd Ferguson's picture

Audio quality


Events were moving fast this morning and Dave and I recorded this on short notice. Therefore, I had to record this from my office.

As luck would have it, the neighbor's lawn crew decided to show up right outside my window about halfway through the call. I've tried to mute/dampen the background noise but have not had any success.

My apologies and I hope it doesn't distract anyone from the quality of the information discussed.

CPE's picture



Orange's picture

Lehman x 10

I think I will buy some faz soon.

edit lol just checked the market and the dow is up 157 after being down all day. I guess I may buy faz just before the close.

Then let the financial system blow up and I can count my paper profits just before I convert them to money.

marchas45's picture

My Favorite Subject

DERIVATIVES. Now To Listen. Keep Stacking

Missed 4th by this much. Lol

J Siefert's picture

A year or so ago Jim Willie was...

warning about a possible Deutsche Bank catastrophe one day in the future. He reckoned it was one of the most endangered banks around due to their derivative load.

EDIT From his site:


July 2013 the Three Big Banks at Failure Risk -- Barclays, Citigroup, Deutsche Bank (happening)

legerde's picture


I haven't read this yet, but its a pricing model white paper..  I thought of you. :)


Stu's picture

S&P 2020-2040

OK Kids,

S&P 2017 +/-

We're getting close so keep an eye out.

Also, I believe there is an inverse ratio proportion between the amount of "Spraying" of Aluminum, Barium, and Strontium into the atmosphere, in conjunction with HARP, and the timing of the economic collapse. They have been spraying like Neanderthals here on the Central coast of California for the past month.

Soon I will be posting a series of photos to empirically verify my views (no pun intended).



This is all coming apart at the seams.



Please first review this man's credentials. He is the Thomas Paine of our day.

This is a short page......



This is the Wolfowitz doctrine in a nutshell.

And take time to listen to none other than Wesley Clark talk about that Doctrine and its projections in 2007--Stunning!

Try and read the headlines on Zerohedge.com just for today and yesterday!



Normalcy Bias precludes most from simply looking up! The photos on that site are the same that I see every day from our  property.

Again, it is my  belief is that there is an inverse ratio proportion between the amount of "spraying" (geoengineering) that is occurring and the amount of time before the "crash". The spraying as been occurring at an exponentially higher rate every week for the past month! Think it through. No water in California means no food for the rest of the Nation. It means that we most likely will be "allowed" minimal rain this year. That pineapple express that was headed towards us about 10 days ago was diverted and dissipated. I was very disappointed because it set a pattern in motion once again. No let up.

The paradigm shift comes when China revalues its gold hoard and Russia finishes with Syria and stops US hegemony in the Middle East. The Petrodollar is dead.

It is estimated that 40-60 million people will die within the first three weeks of this crash. There will be shortages after three days. Credit lines will be cut. Then there will be riots, looting, and murder.

There are some things more valuable than gold.

Nothing occurs in a vacuum

It is all by design and implemented over time.

Best to all. Prepare.

ratioarbitrage's picture


How very kind of you! I can see why you thought I would like it - it is written in my language. I used to work hard at analysing and trying to value gold, but due to the huge stock, the moneyness and the opaque .gov meddling, I have given up! Not on ownership, just on trying to understand.

SteveW's picture

I guess "we're not in Kansas anymore"

​except maybe TF.

​BTW: Reverse repos are down from $641B on Sept 30 to $282B yesterday. Just quarter end window dressing but the windows definitely need a higher level of dressing this past 21 months.


legerde's picture

Pricing Model of Gold.

Maybe some of the ideas will be transferable to silver.   I do aerospace engineering and have been learning about Kalman Filters.  Apparently they are useful in confirming signals in noisy data.  Ive wanted to chase the quant lifestyle, but work keeps me too busy.

AIJ's picture

OH NO....

"Bo Polny has a NEW date for a guaranteed gold and silver spike…"

I can't even link it.  Too embarrassed. 


jaw777's picture


Very funny.  Many hat tips to you.

GuerrillaCapitalist's picture

Re: Audio Quality


You're correct that the information from both you and Dave far out shadowed any ambient noise which I found to be such a low level as to be barely noticeable.

Deutsche Bank, Credit Suisse, Glencore and other unannounced zombie banks might just be the catalyst  that starts the chain reaction leading to The Great Re-Set.

I've thought for quite sometime that TPTB will keep all the plates spinning and bubbles inflated until at least after US national elections in November 2016, however,I'm really wondering if that is possible.

Bollocks's picture


Half a million views in less than 24 hrs for this 60 second clip.

I have no idea who this person is, but this is serious shit.

Bollocks's picture


Hmmm, I didn't hear any lawn mowers in the background of the audio for this podcast.

So ... I'm thinking ... is your 'Audio quality' post a subliminal type-of message that we should consider going long lawn mowers? Or perhaps short?

Ok, maybe garden crews?

Advice please.


lund175's picture

Great read from Alasdair Macleod

Well worth the time.

China's next move could well follow after this weekend, when the IMF and World Bank hold their annual meetings in Lima. It will be the IMF's last chance to take a more constructive approach to China. If the IMF fails to do so, we should expect China to step up her "tai chi" against America and her currency even more, in either of two ways. She could temporarily withdraw entirely from key commodity markets, destroying the US shale-oil industry and inflicting enormous commodity-related losses on the western banking system. That might be too aggressive. Alternatively, China could continue to dispose of the bulk of her remaining dollar reserves, cashing them in for commodities, and giving her embattled suppliers some breathing space. The latter restrained course would be more in keeping with securing her strategic objectives. The sting will be the insistence that, in future, trade deals for raw materials will be conducted more often in yuan, once China's dollar reserves have reduced to more modest levels


marchas45's picture

Well auagforever

Bo Has One Day Left 7-9th Lol

lund175's picture

China gets one step closer

The  half million sheep that viewed the clip that Bollocks posted above are going to be in a world of hurt.

Most will not even know what happened.

HONG KONG Oct 8 (Reuters) - China's central bank on Thursday launched a global payment system in a major step to facilitate yuan clearing transactions, bolstering Beijing's quest to internationalise its currency and challenge the primacy of the dollar in world finance.

The cross-border interbank payment system, known as China International Payment System (CIPS), will remove one of the biggest hurdles to boosting yuan liquidity globally by cutting transaction costs and processing times.

The CIPS will be used to support cross-border goods and services trade settlement, direct investment, as well as financing and individual fund transfers, the People's Bank of China (PBOC) said in a statement.

A total of 19 banks have been selected to participant in CIPS, eight of which are Chinese subsidiaries of foreign banks, including Citi, Deutsche Bank, HSBC and ANZ


ReachWest's picture

Great Podcast / Interview

Audio quality was fine.

Turd and Denver Dave - two of the most sane and logical voices in this community.

Much appreciated.

chocolatechiphorses's picture

The Daily Coin with Gerald Celente

well worth the time to listen and support his Occupy Peace program

It only takes 1% to make a  change.

cc horses

wildstylechef's picture

The US Government Just Crossed The Rubicon

Submitted by Simon Black via SovereignMan.com,

In 49 BC, a defiant Julius Caesar stood in front of his army at the River Rubicon and made the biggest decision of his life.

It was strictly forbidden by Roman law for a general lead his army out of its province and into Rome. And the Rubicon marked the boundary.

“Alea iacta est!” (The die is cast!) he said, and led his army across the river into civil war.

The phrase “crossing the Rubicon” has stuck for more than 2,000 years, signifying a risky and dangerous point of no return.

This week, the United States government crossed the Rubicon.

In a fit of complete arrogance, a federal judge ruled that he has ‘jurisdiction’ over one of the biggest banks in mainland China, Bank of China (BOC), and demands that the bank turn over financial records to his court.

The judge is hearing a case brought by the luxury brand Gucci against an alleged Chinese counterfeiting ring for selling fake handbags in the United States.

The claim is that the Chinese defendants are sending their ill-gotten gains back to Bank of China in the mainland. And the judge wants to see their account activity.

Bank of China, as you can probably guess, is predominantly owned by the Chinese government.

So it goes without saying that this demand (not a request) is a direct affront at China’s sovereignty.

The only leverage the judge has is that Bank of China has a branch in New York City; it is officially a licensed bank in the US.

So if Bank of China doesn’t comply, the judge could theoretically order that their US license be revoked.

Once again, the United States is using its financial system as a weapon.

Since US dollars are the most widely used reserve currency in the world, every bank on the planet needs some access to the US banking system.

Whether you’re in London, Riyadh, Sydney, or Shanghai, the most widely traded commodities, bonds, and financial contracts in the world are primarily denominated in US dollars.

Plus most global trade takes place in US dollars.

So not only are banks forced to hold US dollars, they require access to the US banking system in order to clear and settle US dollar transactions.

Large international banks have what are known as ‘correspondent bank accounts’ or ‘nostro accounts’ with US banks.

So a big bank in Denmark, for example, may have a correspondent account with JP Morgan or Citibank in New York in order to facilitate its dollar transactions.

And sometimes foreign banks may even apply for their own US banking license, as in the case of Bank of China.

But if a bank were to be kicked out of the US banking system, it would be incredibly detrimental to its ability to hold and transact in US dollars. And hence quite difficult to participate in global trade and finance.

This financial leverage is an unbelievable advantage for the United States, and is a result of the rest of the world placing a great deal of trust in the US government.

But the government has shown time and time again that they are willing to abuse that trust and use their advantage as a weapon– one that is more powerful than the US military.

Just last year, the Treasury Department fined French bank BNP Paribas a whopping $9 billion for doing business with countries that the US doesn’t like, such as Cuba.

Of course, Cuba and the US are BFFs now. But I doubt BNP is getting a refund anytime soon.

And naturally, if BNP didn’t pay up, the US could threaten to evict them from its financial system.

It’s simply amazing that the US did that to its own ally.

Now they’re going after China, its biggest competitor.

The Chinese are already working on a parallel, competitive financial system.

They set up the Asian Infrastructure Investment Bank to compete with the vestigial IMF and World Bank.

And they’re nearing completion on an international payment system and clearing network to compete with SWIFT and the US financial system.

It’s called CIPS.

And once it’s up and running, there will likely be a rapid increase in the worldwide use of China’s currency for financial transactions– transactions that used to be executed in US dollars.

Sticking it to Bank of China like this only gives the Chinese government even more reason to wage war on the US financial system through CIPS.

The reduced demand for US dollars completely destroys America’s last remaining advantage.

If they can’t force the rest of the world to use the US banking system, then they won’t be able to force the rest of the world to hold US dollars or buy US government debt.

It weakens America considerably.

And when future historians write the history of the decline of the United States, there will no doubt be a chapter on how the US government made it a matter of national policy to consistently abuse the power entrusted to them by the global banking community.

Of course, Julius Caesar didn’t learn that lesson either.

After crossing the Rubicon, he won a long civil war, after which the Roman Senate made him dictator for life.

And fearing he would abuse it, he was assassinated just a few weeks later by the very people who entrusted him with that power.

arch stanton's picture


I read it.  I feel like an idiot.  Nuff said.

AlienEyes's picture


Is Blow Pony and Blow Baloney the same person ?

Chiron's picture


Think like a criminal.

You are the Federal Reserve.  You know that you are sitting on trillions of toxic debt and derivative bombs that would make any terrorist salivate.  The "banks" that you utilize to do your bidding (Citi, JP Morgan et al) have abused their privilege of fleecing the muppets.  The banks have taken the "free" money and "one time get out of jail free" card provided through TARP and QE infinity, and have doubled down on the same game but applied leverage in between.  Now the problem is 1000X worse and everyone knows it.  You know that the system is going to crash.  

China wants to start a new banking system and plans to take the "branches" of large banks into the new CIPS.  Why not just give them the "tree" as well?  So the Chinese now own all of the banks.  The system implodes and the Chinese now own it.  The banks implode before the ink on the deal dries.  But you still blame the Chinese.  

You pick up the chips and start fleecing the muppets all over again and call it patriotism. sarc?

JackPutter's picture

I watch the computer rags for interesting stuff.

Heads up! ZDnet has always been a pretty good source.

The fake LinkedIn recruiter network hackers are using to reel in business users


Turd Ferguson's picture


canary's picture

John Lennon

From ZH: "The trouble with the government as it is, is that it doesn't represent the people. It controls them".

Universally true statement....and through the ages.

No wonder, they went after him.

ArtL's picture

Protect you smart phone from being hacked when it is not in use

the recent Snowden revelations suggest that it is necessary to not only turn off your phone, but also store it in an aluminum foil bag. this bag must have no openenings. it cannot receive or transmit any RF while in the bag.

ArtL's picture

Sam Harris "The riddle of the gun" blog/podcast


A very interesting discussion about guns from someone who has been given many death threats from radical  muslims for his comments on islam being "a well spring of bad ideas"

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