Ive been reading up on some things related to finance these last few days and i think i ran into a whooper.
Basically what seems to be happening is similar in part to what happened to the big banks of USA during the 2008 crysis.
Deutsche bank has recently sacked 18 000 employees, their stock price plummeted and the stories as to why that is happening started emerging.
CDS (Credit default swaps)
Im not going to explain what that is in detail so you can google it but basically its a financial derivative.
What basically happens when you take up a loan is that you have to pay interest and what is basically an insurance on the loan that protects the bank in case you cant repay the loan. This essentially transfers the risk from the bank to the insurance company.
If the loans are sound the bank and the insurance company make money but the insurance company takes most the risk.
Since the insurance companies arent financial imbeciles they started offering these derivatives to the stock market for trade.
When that happens its not the insurance company that takes all the risk anymore.
Deutsche bank is exactly the institution filled with these derivatives (CDS) with which it took away the risk from the United States to Germany.
The German worker will pay for everything that the US lender cannot.
Apparently there is 30 000 Billion USD worth of these CDS which is 30% more then the total US debt.
(I found this info on a article so more checking is required, fake news and whatnot)
Deutsche bank at this moment is a problem of national security and the national security of the EU. If it fails every bank fails.
Interesting times ahead. HODL STEEM.