If you thought the Great Recession of 2008 was bad, you might want to put down your coffee and listen to this conversation between radio show host Robert Davi and financial expert David Fischer. The topic: The Deutsche Bank collapse and what that means for the American Public.
Robert Davi talks possible Deutsche Bank Collapse with David Fischer
Listen to “Robert Davi Show with guest David Fisher – The Economy Unraveled” on Spreaker.
What you need to know: Deutsche Bank is one of, if not the largest bank in the European Union. Currently, it is battling 7,000 legal cases including a very significant lawsuit with our very own Department of Justice. The DOJ is suing Deutsche Bank to the tune of $14 billion for allegedly abusive lending practices. We saw the same thing from Goldman Sachs and other banks, bundling bad loans in with good loans and selling them to the international market.
The problem: Deutsche Bank doesn’t have the capital to survive the DOJ settlement, much less the other legal case judgments. Deutsche Bank currently has $5.5 billion in its settlement fund, which could be wiped out by the DOJ alone. Deutsche Bank would then be forced to sell its assets in order to make up the difference, ultimately bringing down the bank. But it is more complicated than this.
As David Fischer says in this interview “to put it into perspective they [Deutsche Bank] have $72 trillion in derivative risk. Lehman Brothers had $22 trillion. There are 3,112 companies that work with Deutsche Bank. There was 208 with Lehman Brothers”. Lehman Brothers wasn’t able to unravel their books in time to save the subsidiary companies from the collapse, so the likelihood of Deutsche Bank being able to unravel itself from 3,112 companies is improbable. Thinking back to the Great Recession of 2008 due to the Lehman Brothers implosion, you can imagine the devastation that would be felt here and abroad if Deutsche Bank follows suit.
To learn more about this dire topic and what it means for the very near future, listen to the rest of this interview.
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