Half the world's banks are too weak to survive downturn - McKinsey

RT 22 Oct, 2019

A new survey from consultancy McKinsey & Co has found that a majority of banks globally may not be economically viable because their returns on equity aren’t keeping pace with costs.

The study looked at 1,000 banks in developed and emerging countries and found that just over a third had made a return on capital of just 1.6 percent over the past three years. This compares to returns of just over 17 percent for top banks over the same period.

"Nearly 35 percent of banks globally are both sub-scale and suffer from operating in unfavorable markets", as well as having flawed business models, said McKinsey.

It added that "to survive a downturn, merging with similar banks may be the only option, if a full reinvention is not feasible."

According to the report, banks are not as well-prepared for a downturn as they were when the global financial crisis erupted in 2007 in terms of profitability.

"While the jury is still out on whether the current market uncertainty will result in an imminent recession or a prolonged period of slow growth, the fact is that growth has slowed," McKinsey said.

A Bank With 49 Trillion Dollars In Exposure To Derivatives Is Melting Down Right In Front Of Our Eyes

TECB July 18, 2019

Could it be possible that we are on the verge of the next “Lehman Brothers moment”?  Deutsche Bank is the most important bank in all of Europe, it has 49 trillion dollars in exposure to derivatives, and most of the largest “too big to fail banks” in the United States have very deep financial connections to the bank.  In other words, the global financial system simply cannot afford for Deutsche Bank to fail, and right now it is literally melting down right in front of our eyes.  For years I have been warning that this day would come, and even though it has been hit by scandal after scandal, somehow Deutsche Bank was able to survive until now.  But after what we have witnessed in recent days, many now believe that the end is near for Deutsche Bank.  On July 7th, they really shook up investors all over the globe when they laid off 18,000 employees and announced that they would be completely exiting their global equities trading business…

It takes a lot to rattle Wall Street.
But Deutsche Bank managed to. The beleaguered German giant announced on July 7 that it is laying off 18,000 employees—roughly one-fifth of its global workforce—and pursuing a vast restructuring plan that most notably includes shutting down its global equities trading business.
Though Deutsche’s Bloody Sunday seemed to come out of the blue, it’s actually the culmination of a years-long—some would say decades-long—descent into unprofitability and scandal for the bank, which in the early 1990s set out to make itself into a universal banking powerhouse to rival the behemoths of Wall Street.

These moves may delay Deutsche Bank’s inexorable march into oblivion, but not by much.

And as Deutsche Bank collapses, it could take a whole lot of others down with it at the same time.  According to Wall Street On Parade, the bank had 49 trillion dollars in exposure to derivatives as of the end of last year…

During 2018, the serially troubled Deutsche Bank – which still has a vast derivatives footprint in the U.S. as counterparty to some of the largest banks on Wall Street – trimmed its exposure to derivatives from a notional €48.266 trillion to a notional €43.459 trillion (49 trillion U.S. dollars) according to its 2018 annual report. A derivatives book of $49 trillion notional puts Deutsche Bank in the same league as the bank holding companies of U.S. juggernauts JPMorgan Chase, Citigroup and Goldman Sachs, which logged in at $48 trillion, $47 trillion and $42 trillion, respectively, at the end of December 2018 according to the Office of the Comptroller of the Currency (OCC). (See Table 2 in the Appendix at this link.)

Yes, the actual credit risk to Deutsche Bank is much, much lower than the notional value of its derivatives contracts, but we are still talking about an obscene amount of exposure.

And this is especially true when we consider the state of Deutsche Bank’s balance sheet.  According to Nasdaq.com, as of the end of last year the bank had total assets of 1.541 trillion dollars and total liabilities of 1.469 trillion dollars.

In other words, there wasn’t much equity there at the end of December, and things have deteriorated rapidly since that time.  In fact, it is being reported that a billion dollars a day is being pulled out of the bank at this point.

I know that most Americans don’t really care if Deutsche Bank lives or dies, but as the New York Post has pointed out, the failure of Deutsche Bank could quickly become a major crisis for the entire global financial system…

EU Proposes Freezing Bank Accounts to Bailout Megabanks

By Claire Bernish July 30, 2017

After nervous customers panicked and drained their accounts, ultimately causing the collapse of Spanish bank, Banco Popular, equally jittery European Union officials are debating the merits of freezing access — preventing anyone from withdrawing any money — at the first sign of a bank run.

Proponents claim measures to halt a rush of withdrawals would prevent the downfall of floundering financial institutions at their most vulnerable point — in hopes of staving off a catastrophe at least as harrowing as that of 2008 — while detractors admonish the move might have precisely the opposite effect, with investors rushing to yank funds at the slightest indication of trouble.

“The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” ‘a person familiar with German government’s thinking’ told Reuters.

“Giving supervisors the power to temporarily block bank accounts at ailing lenders is ‘a feasible option,’ a paper prepared by the Estonian presidency of the EU said, acknowledging that member states were divided on the issue,” Reuters reports.

“EU countries which already allow a moratorium on bank payouts in insolvency procedures at national level, like Germany, support the measure, officials said.”     More

The truth about lies

Dr. Mark Sircus, June 30, 2017

Lying seems to be the foundation of human intelligence and civilization. Robert Fisk writes, “We do not live in a “post-truth” world, neither in the Middle East nor in the West – nor in Russia, for that matter. We live in a world of lies. And we always have lived in a world of lies.”

Anyone alive today that believes we are living in a world of truth, justice and love needs to have their heads examined. We live in a world of lies and half-truths, which are really the same or worse than outright lies, because they confuse the human mind. Lies cause unmeasurable amounts of human suffering and lead people to early graves.

We lie and we never stop lying, even to ourselves. Governments lie and they want us to believe in their lies. The press lies pretending to represent the truth but that is understandable because they are wholly owned by elite masters who tell them what to publish. Historians lie but not all of them. Egyptologists lie because they do not want to know anything besides what they have already thought of as the truth of Egypt’s ancient past.

Certainly, bankers lie about their honesty and doctor’s lie about the dangers of their drugs and surgery done without supplementing with magnesium. They even lie about heart attacks never saying people who go into cardiac arrest are actually dying of magnesium deficiencies. Dentists of course lie about fluoride and their use of the highly toxic neurological poison mercury.

Therefore, we lie and our institutions are built on pyramids of lies. So why do we trust liars? How can anyone be arrogant about realities of lies when there is no truth left? What is truth if we have nothing but lies?

What is amazing is that these past years they have even been lying about the weather. Imagine the weatherman telling people in New York that it is sunny and warm but when you step outside it is cold and raining. It is that bad.

I have written for nine years on global cooling probably publishing over 70 essays on the subject. Do a Google search on, Record high temperature and Record low temperature and see what comes up. I just got 9,460,000 results (0.55 seconds) for high temperatures and 78,100,000 results (0.58 seconds) for cold temperatures. Not that the google search means much but it does suggest one start reading about what is going down on our planet if one is interested in surviving the future.

We have become accustomed to white lies in our everyday lives and have become accustomed to not believing everything we hear. Whether it is someone’s description on a dating app or a resume for work, we take what we listen to with a grain of salt. Some people fiercely filter information for fabrications, exaggerations, plagiarism, white lies, and most of all: deception. However, as one study suggests, we are on average only able to catch 54% of lies. Strikingly, in the same study, trained police officers, judges, and FBI agents were not that much better than the average person was.

All forms of information have lost their integrity. All institutions — from the academy to commerce to governance to non-profits — have lost their integrity. Worse perhaps, than secret agencies telling lies with no evidence and the mainstream media telling lies on command from its financial masters, is an all-out war on truth.

“There are facts, there are opinions, and there are lies,” says historian Deborah Lipstadt who encourages us all to go on the offensive against those who assault the truth and facts. “Truth is not relative,” she says. Therefore, we really have no choice but to question and challenge everything.

What is the truth of the liberal mind? What is their greatest wet dream? They want the whole world to be one big happy family, where borders are meaningless, people can freely move from one country to the next, and no society is inherently better than another is. They preach diversity, but they want the world to be blended into one drab monoculture that falls in line with their beliefs and violently oppose others, who believe in quaint ideas of nationalism for example.

Today nationalists and patriots are evil people in the eyes of liberals and progressives who forget the truth of what these words mean. According to the Merriam-Webster dictionary, nationalism simply means “love for or devotion to one’s country.” According to thefreedictionary.com, a patriot is “a person who loves, supports, and defends his or her country and its interests.”

So for sure they lied about 9-11, what started the Second World War and about how the world is doing with global debt now hitting $217 trillion, which is 327% Of GDP. We could go on forever listing lies. Religions lie. We know that because if that were not the truth then only one religion is a true one and the rest bull because they all contradict each other. In a world of lies one has to wonder the truth about everything, even what happened in Germany during WWII?

Come on, they even lie about iodine in salt, as if it would do anyone any good because once put on the table the iodine evaporates quickly. Most people have no idea what truth is or the process of finding it. The truth is as unpopular today as it has always been. If you are a person of truth and you hear the truth, it rather excites you. The truth, if we are not living it, is almost unbearable to hear.

 

In a time of universal deceit – telling the truth is a revolutionary act.   George Orwell

The sounds of silence are the sounds of lies, omissions of fact and reality so large it is more than manipulation. Did you know that one’s silence could be deadly? One can actually do mass murder with silence by deliberately holding back information that can be lifesaving. Tell that to your doctor for he is the one who most needs to know this. What is going on in Fukushima is perhaps the greatest silent lie. Things are so bad there we hear nothing about it.

Perhaps the most dangerous lies today center around Russia. Sick politicians in both American and Europe are risking all of our lives in a nuclear war with their lies. Crimea is Russian. All the people there speak Russian. Almost every one of them voted to rejoin Russia.

The West is completely irrational, not only about Islam but also about just about everything. It is inviting its own destruction. They have even convinced the Russian high command, which has already announced its conclusion, that Washington is preparing a surprise nuclear attack on Russia. The West is completely separated from reality says Paul Craig Roberts.

Conclusion – A little bit of Truth

The heart can only stand the truth but our minds can wonder all over the universe of lies without problem. We said in the beginning that lies hurt people. Powerful people everywhere routinely make decisions that hurt others. The old saying is right: Power really does corrupt. No one is honest about their corruption so they have to lie. Therefore, the lies that permeate civilization start at the top among the most powerful.

 

Recent psychological research suggests that powerful people behave remarkably like traumatic brain injury victims. Controlled experiments show that, given power over others, people often become impulsive and less sensitive to risk. Most important, test subjects often lose empathy, that is, the ability to understand and share the feelings of others. Said another way they lose their hearts, the intelligence of the heart, their own organs of truth so in a sense they become stupid.

Rich in money and possessions but without hearts leaves the most powerful without the kind of vulnerability that leads to love so actually they are poor in spirit, poor in their ability to feel but strong in their ability to abuse. They also lose their capacity to mirror and listen to others.      Drsircus