Monday, 25 September 2017

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We have forensically picked apart Deutsche Bank in a way that no other entity ever has, likely including Deutsche Bank itself. While we may not know all of its secrets, we likely now know more than almost everybody else. We will publish our findings to Veritaseum Knowledge clients early this week, but in the meantime we will put little teasers out to the public for the sake of conversation. "Why?", you may ask. Well, everybody already knows that Deutsche Bank is a basket case, but we are showing our clients that the real short opportunities and true systemic risks lie within DB's counterparties, whom have identified and are in the process of putting share price targets on. The first forensic report on the most proximal counterparty with an elevated share price is done, and the first counterparty share price target will be published to European Bank Contagion Assessment, Forensic Analysis & Valuation subscribers within 48 hours. There are several more to follow. In the meantime and in between time, let's discuss Deutsche in detail that you will find nowhere else on the web or on Wall Street.

Last week we illustrated what appears to be a slam dunk finding of Deutsche Bank fraud under the UK Fraud Act of 2006, reference "Veritaseum Knowledge Exposes Frightening Counterparty Risk At Deutsche Bank for "Gold Investors"". In said piece, we tracked down DB's alleged failure to deliver physical gold upon demand redemption of one of it's subsidiary's gold derivative instruments and superimposed it against DB's counterparty risk and blatant contradictions between it's marketing material (ie. website) and it's prospectus (which itself actually had material and confusing contradictions) - as excerpted:

  • ..."an investor is, from an economic point of view, invested in gold", but
    • "No correlation with the gold price", and 
    • and "The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold", but
    • "For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes)." - keeping in mind that Deutsche Bank believes 
    • There's no movement in counterparty risks yearly, or cumulatively, due to collateralization (where said collateral is wide open to market forces and valuations) for instruments.
    • No control of genuineness or fineness of the physical Gold Neither the Issuer nor the Depositary Agent or any other agent of the Issuer will control the genuineness or fineness of the physical Gold held in custody on behalf of the Issuer by Clearstream Banking AG in its capacity as Depositary Agent.

Oh, there's more, for those of you who believed that line "an investor is, from an economic point of view, invested in gold". 

The purchasers of the Notes will only acquire the rights securitised by the Notes. The purchasers of the Notes will not acquire any title to, or security interests or beneficial ownership in, the physical Gold held in custody on behalf of the Issuer. An investment in the Notes does not constitute a purchase or other acquisition of Gold.

This comment excerpts the requirements of the UK Fraud Act of 2006, since the DB derivative issue was sold to UK investors. It clearly shows the material uncovered in our article can garner the label of fraud in the UK. There''s actually much more in the article if you click the aforereferenced link, but I believe many can get the message. So, where does this leave us? Well, it appears as if DB is prepping for a rash of fraud and litigation exposure. Looking at numbers buried deep within DB's more than 650 pages of financial reporting (just for the 2015 annual report), we find their disclosure of operational risk.

DB Operational risk 2015

'Profit and loss based operational losses increased by € 3.3 billion or 133 % compared to year-end 2014. The increase was predominantly driven by the event types “Clients, Products and Business Practices” and “Internal Fraud”, due to settlements reached and increased litigation reserves for unsettled cases. The increase in the event type “External Fraud” is caused by a provision for equity trading fraud.

As we drill down even further, we see even more damning information. From a frequency perspective. external fraud is the king. It happened more than any other type of operational loss, and for the year 2015, has almost matched the frequency of the previous 5 years combined. What is going on in a bank to cause such a dramatic uptick in fraud? 

To make matters worse, the clients, products and business practices losses (basically fraud, from our perspective) has almost doubled that of the previous 5 years - and that's just for the fiscal year 2015! The saga continues, and gets even darker. When looking at the distribution of actual losses, "Clients, Products & Business Practices" not only takes the lions share of the pie, but 2015 alone has matched the previous 5 years combined. What the hell is going on in this bank? More importantly, why is it getting so much worse?

DB Operational losses by event type 2015

 

This is how DB framed it:

"The above left pie chart “Frequency of Operational Losses” summarizes operational risk events which occurred in 2015 compared to the five-year period 2010-2014 in brackets based on the period in which a loss was first recognized for that event. For example, for a loss event that was first recognized in 2002 with an additional profit/loss event recognized in 2015, the frequency chart would not include the loss event, but the loss distribution chart would include the profit/loss recognized in the respective period. Frequencies are driven by the event type “External Fraud” with a frequency of 44 % of all observed loss events. The event types “Clients, Product and Business Practices” contribute 42 % of the events and “Execution, Delivery and Process Management” contribute 11 %. Others are stable at 2 %. The event type “Internal Fraud” has a low frequency, resulting in less than 1 % of the loss events in the period 2015. This is unchanged compared to 2010-2014. The above right pie chart “Distribution of Operational Losses” summarizes operational risk loss postings recognized in the profit/loss in 2015 compared to the five-year period 2010-2014. The event type “Clients, Product and Business Practices” dominates the operational loss distribution with a share of 63 % and is determined by outflows related to litigation, investigations and enforcement actions. “Internal Fraud” has the second highest share (23 %) which is related to regulatory events we have experienced in recent years. Finally, the event types “External Fraud” (8 %) and “Execution, Delivery and Process Management” (5 %) can be considered minor, compared to other event types."

What DB failed to point out was that although "Internal Fraud" consisted of just 1% of the occurrences, it represented 23% of the loss amount of 2015, which is ~10% more than the previous 5 years combined, which was in itself still significantly more expensive than all of the other categories. 

This bank is a  mess. As for the source of all of these numbers, let's display it in words so all can get a different perspective...

Legal Actions by the Counterparties since 2014 (that's right, this is just since 2014):

There are some incidents where Deutsche bank is defendant in various lawsuits by purchasers and counterparties who were involved in transactions relating to RMBS and their affiliates. Some of the counterparties who faced damages are:

  • Azora Bank Ltd :

Damage of US$61 million attributable to Deutsche bank

  • The Federal Deposit Insurance Corporation:

They filed a lawsuit against Deutsche bank as receiver of

  • Colonial bank whose damage amount is around US$189 million

  • Franklin Bank S.S.B and Guaranty Bank; where the damage amount is almost US$901 million

  • Citizens National Bank and Strategic Capital Bank; aggregate loss is around US$66 million

  • The federal Home loan bank of San Francisco

  • Phoenix light SF Limited

  • Royal Park Investments

  • Residential Funding Company

  • Mass Mutual Life insurance company

  • The federal Home loan bank of Boston and The federal Home loan bank of Des Moines

  • RBMS Recovery Holdings 4, LLC

  • VP structured Products, LLC

  • Texas County & District Retirement system for 4 RMBS bonds underwritten by Deutsche Bank

  • Charles Schwab Corporation for purchasing countrywide- issued RMBS certificate

  • Trustee civil Litigation investors

  • Royal park Investments

  • The national credit Union Administration Board (NCUA) for investing in 121 RMBS trusts

  • Western and Southern life Insurance company and five related entities( collectively known as Western and Southern) for 18 RMBS trusts

  • Commerzbank AG for investments in 50 RMBS trusts

  • IKB (IKB International, S.A in Liquidation and IKB Deutsche Industriebank A.G.) for their collective investments in 37 RMBS trusts

To get the heavy dirt on many of the leading EU area banks, US tech companies, and real estate concerns (not to mention the latest in blockchain technology), subscribe to Veritaseum Knowledge - in depth, extremely detailed knowledge (vs information) not available anywhere else in the world.

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 Let me ask you a question. If you were a prospective gold investor, and were not a client of Veritaseum Knowledge, would you buy these gold instruments?Deuscthe Borse Commodities prospectus

Well, clients of Deustche Bank et. al. certainly did. Reference this story from RT.com: Deutsche Bank refuses clients' demand for physical gold

Clients of Germany’s biggest bank who have invested in the exchange-traded commodity Xetra-Gold are facing problems when they want to obtain physical gold, according to German analytic website Godmode-Trader.de.
Xetra-Gold is a bond on the Deutsche Börse commodities market, and Deutsche Bank is a designated sponsor. On the website, Xetra-Gold says its clients have the right for physical delivery of gold...
“Physically backed: The issuer uses the proceeds from the issue of Xetra-Gold to purchase gold. The physical gold is held in custody for the issuer in the Frankfurt vaults of Clearstream Banking AG, a wholly-owned subsidiary of Deutsche Börse. In order to facilitate the delivery of physical gold, the issuer holds a further limited amount of gold on an unallocated weight account with Umicore AG & Co.,” says Xetra-Gold.
However, despite claims that every virtual gram of gold is backed by the same amount of physical gold, clients have been refused the precious metal upon demand.
According to Godmode Trader, its reader “sought physical delivery of his holdings of Xetra-Gold. For this he approached, as instructed by the German Börse document, his principal bank, Deutsche Bank." However, he was told that “the service” was no longer available for "reasons of business policy". The article went on to say it’s not yet clear whether other banks are still delivering gold through Xetra.

The website's marketing material is clear enough...

DB Xetra Gold

The issuer of Xetra Gold is an entity jointly owned by Germany's Commerzbank & Deutsche Bank (rumored to be merging - Yechh!), among others. Uh Oh!

Deuscthe Borse Commodities

In the Deutsche Borse Xetra Prospectus under the heading "Key information on the key risks that are specific to the Notes", you will find the following snippet:

Upon acquisition of Notes, an investor is, from an economic point of view, invested in gold and thus bears the market risk associated therewith.

This statement is simply not true, and it's amazing that it passed muster with legal counsel and auditors. Why? Because the following line in the prospectus literally says:

"No correlation with the gold price"

Let's look at this a bit more closely, shall we...

The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold. For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes).

Hmmm... It sounds as if the gold is actually held on the balance sheet of the note issuers. If that's true, then this is not an investment in gold, it's and investment of a derivative of gold exposure and the balance sheet exposure of the issuer. Now, how many of the so-called "investors" of these derivatives got that concept BEFORE they bought in???

Deuscthe Borse Commodities prospectus - counterparty risks

Now, you guys (and girls) tell me, do we have reason to suspect credit and solvency issues at the Issuer,'s parent, Deutsche Bank? Let's refer to notes available to subscribers of Veritaseum Knowledge, in particular, the European Bank Contagion Assessment, Forensic Analysis & Valuation module... 

DB Cojunterpary risk shift 2

Actually, DB doesn't think we should concern ourselves with things such as adjustements for credit risks or credit worthiness...

Deusstche loan valuation 2

So, with the aforementioned understanding, let's move on through the prospectus...

"The value of a Note will therefore not necessarily equal exactly the value of one gram of Gold at any given time."

"No rights or beneficial ownership in the Gold"

So, let's add these up now...

  • ..."an investor is, from an economic point of view, invested in gold", but
    • "No correlation with the gold price", and 
    • and "The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold", but
    • "For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes)." - keeping in mind that Deutsche Bank believes 
    • There's no movement in counterparty risks yearly, or cumulatively, due to collateralization (where said collateral is wide open to market forces and valuations) for instruments.

Oh yeah! If I were hired as an expert witness, this stuff could get ugly.... As for now, methinks its time to go put shopping again.

Oh, there's more, for those of you who believed that line "an investor is, from an economic point of view, invested in gold". 

The purchasers of the Notes will only acquire the rights securitised by the Notes. The purchasers of the Notes will not acquire any title to, or security interests or beneficial ownership in, the physical Gold held in custody on behalf of the Issuer. An investment in the Notes does not constitute a purchase or other acquisition of Gold.

Here's some more risks, this time due to liquidity of the derivatives....

Tradeability No assurance can be given that the admission of the Notes to the regulated market (General Standard) of the Frankfurt Stock Exchange will continue or that the Notes will continuously be traded on the Frankfurt Stock Exchange. Consequently, there is the risk that sale of the Notes on an exchange may not, or not at all times, be possible.

In reference to actually getting what you're paying not to own...

No control of genuineness or fineness of the physical Gold Neither the Issuer nor the Depositary Agent or any other agent of the Issuer will control the genuineness or fineness of the physical Gold held in custody on behalf of the Issuer by Clearstream Banking AG in its capacity as Depositary Agent. As the party responsible for all physical delivery processes, Umicore AG & Co. KG will be liable for the genuineness and fineness of the physical Gold acquired by the Issuer with the proceeds from the issue. If the physical Gold which is held in custody by Clearstream Banking AG as Depositary Agent of the Issuer is not genuine or if its fineness does not comply with the requirements specified in the rules adopted by The London Bullion Market Association (or a successor organisation representing market participants in the London gold trading market) for the delivery of gold bars, as amended from time to time and which, at the date of this Prospectus, provide for a minimum fineness of 995 parts per 1000 pure gold, the Notes might only be covered by the aforementioned liability claims against Umicore AG & Co. KG as the party responsible for all physical delivery processes. Market disruptions If the Calculation Agent determines that a market disruption has occurred or continues to exist at any given time, the Issuer will not fulfil its delivery or payment obligations until the Calculation Agent determines that the relevant market disruption has ceased to exist. Any such determination may delay 16 fulfilment by the Issuer of its delivery or payment obligations

Become a member of Veritaseum Knowledge now, and subscribe to the knowledge module European Bank Contagion Assessment, Forensic Analysis & Valuation. There's much, much, much more to this story than meets the eye. More apparently, there are many more European banks and institutions involved - in countries you'd likely never suspect. We suspect some of them will be going pop in the not too distant future. This is from the team that called Bear Stearns, Lehman, GGP and nearly all of the significant financial institution failures of the 2008 crash.

 

 

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Our report on Banco Popular Milano was released to clients in March and April of 2016 as part of the "Potential for a European Banking Collapse" series. This research is continuously being updated at Veritaseum Knowledge, including additional and other financial institutions along the way. Here is an excerpt from the report:

BPM report teaser

This is the Banco Popular Milano share price over the time period in question...

Banco Popular Research stock price

'Nuff said! Click here to participate in Veritaseum Knowledge. We've compiled a list of six banks whom we believe the market has materially underestimated the risk of. Some of which are systemically relevant institutions with plenty of room to fall in terms of public equity pricing.

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Veritaseum Valuation Course

The Veritaseum Introduction to Stock Valuation course has hit a homerun in walking novices investing through building an investment valuation model for althletic apparel companies, from scratch. The course compared the fundamentals of Adidas, Nike, Puma, etc. and found Adidas to be materially overvalued. This was a snapshot of the stocks at the launch of the education module.

adidas v nke

This is a snapshot of the same set of comparables today, compared to the date of the course availability...

Veritaseum Valuation Course stock results

Yes, fundamentals still matter - even in a world of centrally planned market manipulation. A short position on this stock would have grossed nearly 10% in that short period of time. Those interested in taking the course and/or tweaking their own version of the model should click here to join. It was purposely priced at a mere $50 to eliminate any barriers to anyone interested in learning real world stock valuation. 

Conversations in our novice discussion group (Veritaseum University: Using Comparative Analysis to Value Apparel Stocksand below will ensue as to how far Adidas has to drop before being realistically valued.

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Bloomberg reports:

German Chancellor Angela Merkel lauded Italian Premier Matteo Renzi’s economic policy as “courageous,” while signaling that European Union budget rules can’t be bent to help Italy boost growth. Merkel’s comments alongside Renzi and French President Francois Hollande hinted at one of the divisions between the leaders of the euro area’s three biggest economies as they met on Monday to plan the European Union’s way forward after Britons voted to leave the bloc. Italy’s economy stagnated in the second quarter, pushing off budget forecasts, and Renzi is pressing for greater flexibility by the European Commission.

“The stability pact has a lot of flexibility, which we have to apply in a smart way,” Merkel told reporters aboard the Italian aircraft carrier Giuseppe Garibaldi, where the leaders discussed topics from refugees, border controls and terrorism to jobs and investment. “Europe isn’t the most competitive place in the world in all sectors yet.”

 That's for sure. Brexit has not only increased uncertainty, it has promised to remove the EU's 2nd largest economy and its premier (and essentially only true) financial center. Worse yet, the sudden and extreme drop in the pound didn't make the action look nearly as apocalyptic as naysayers had promised, with retail actiivty, tourism and stocks literally jumping. This likely leads to other nations wlling to push their own individual agendas. The EC and IMF have a horrible track record of forcasting these things, reference So, Brexit. And... Czexit, Pexit, Frexit as EU referendum CONTAGION sweeps Europe amid political quake.

Making matters worse, fast forward 6 years or so and the IMF/EC are not more accurate (still overly optimistic, as usual).

Italy IMF forecast GDP

Lastly, Italy's banking system will be drag that turns into a bust. Italian banks are laden with bad loans, high NPAs, and dangerous derivative admixtures. Oh yeah, don't believe that "notional value" defense, either. Just look at the basic math...

Banco Popular Research teaser3

Banco Popular Research teaser4The only real potential salve would be for them to earn their way out of the mess. That's not going to happen with negative interest rates and a recessionary economy.

P1-BY264 NEGRAT 16U 20160808131805

The banks are in bad enough shape to set off a true chain reaction. Reference our extensive report and analysis (over 2 hours worth) in Veritaseum University, aptly called European Bank Contagion Assessment, Forensic Analysis & Valuation. We have two very large sections on EU bank and financial institution contagion, and have covered 6 banks thus far. We are working on several more institutions as I type this.

This is very, very important for the ECB has stress tested its banks but has refused to release the results. Don't confuse this with the stress test results from the EBA, who refused to give a pass/fail to any bank. Regulators NEVER refuse to release good news. Never fear, we're stress testing the banks for you (the same team that predicted Bear Stearns, Lehman, CountryWide and WaMu). I would be highly suspect of the EBA results for they failed to mention how unrealistic the Deutsche Bank reporting was, nor the derivative accounting of many banks that we noticed. Even more suspect is the ECB's silence.

Those of you in the sell side blockchain space, expect those budgets to dry up very quickly over the next year as banks start to exhibit some real problems!

All those who are interested in this topic, the European Bank Contagion Assessment, Forensic Analysis & Valuation course goes into this in depth. I wil be adding additional Deutsche Bank and contagion content over the next 48 hours as well.

 

 

Thursday, 25 August 2016 15:01

How Deutsche Bank Can Destroy Europe Featured

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How can Deutsche Bank destroy the EU? Capital fight and extreme, involuntary deleveraging. DB is closing nearly 200 German bank branches. Not a big deal, right? German bank's depositor base is 111% of German GDP. A run on German banks is literally a run on the German economy - the largest economy in Europe...

fredgraph 1

...not to mention a major (the major) funding source for DB's massive derivative positions.  

Current news events don't portend a positive outcome for Germany's largest bank either. Bloomberg reports: NordLB Boosts Shipping Provisions Five-Fold, Warns of High Loss

Norddeutsche Landesbank boosted provisions for bad loans nearly fivefold to 1 billion euros ($1.1 billion), as Germany’s biggest shipping lender prepares for its first full-year loss since 2009.

NordLB, controlled by the state of Lower Saxony, posted a loss of 406 million euros in the first half as it battles a prolonged slump in maritime markets, including eight years of crisis in the container segment. That compares with a profit of 290 million euros in the same period last year.

“The shipping crisis, which further intensified in the first half of the year, has necessitated impairments that were higher than planned,” Chief Executive Officer Gunter Dunkel said in a statement. The bank lowered its outlook for the year, now anticipating a “significant” loss. It had projected a “negative result” in the spring.

... NordLB’s pessimistic view highlights risks at other German banks, which hold roughly one-quarter of the about 400 billion euros in global shipping loans. Under pressure to unwind sour legacy maritime assets, banks including HSH Nordbank AG and Commerzbank AG are also trying to shrink their loan books.

 What does this have to do with Deutsche Bank? A lot! Because everybody wants to sell these assets that aren't considered very desirable, and all at the same time, we've made a bad situation worse - precisely when DB can't afford it.DB mass selling bad shiping loans

Then there's the issue of DB's somewhat questionable assumptions and characteristics in its financial reporting. Deutsche Bank addendums are quoted as saying:

"The credit risk on the securities purchased under resale agreements and securities borrowed designated under the fair value option is mitigated by the holding of collateral. The valuation of these instruments takes into account the credit enhancement in the form of the collateral received. As such there is no material movement during the year or cumulatively due to movements in counterparty credit risk on these instruments."

What???!!! So, the value of collateral doesn't move now? On planet Earth, not only does the value of collateral move, it tends to move in the exact same direction as the value of the loan, borrowing or underlying, often at an exaggerated pace in the beginning (it's markets are the first to know of turmoil). Reference my podcast interview with Max Keiser at the 2:40 marker. Want some more? Read this page from our EU banking report a couple of quarters ago...

For those who don't believe me, I made this call in early 2008 - twice. Once for Bear Stearns (Is this the Breaking of the Bear?) and once for Lehman Brothers (Is Lehman really a lemming in disguise? Thursday, February 21st, 2008 | Web chatter on Lehman Brothers Sunday, March 16th, 2008). Was I right? Of course, that was then and this is now, so the banks are better prepared, right? Of course. The graphic below was taken from our Banco Popular report (click here for more info), not from 8 years ago, but from a quarter ago - yes, 2016! Hey, there's more...

Banco Popular Research teaser3

Now, just imagine that Italy's Banco Popular is the entity that DB used to hedge it's exposure, and Banco Popular (obviously) can't pay up on every(any?)thing. DB's gross exposure become's DB's net exposure as DB's notion value and market value converge near instantaneously if (or when) market shoots off in one direction (you can likely guess what direction that would be for stakeholders, and this time around that includes depositors and bondholders, not just shareholders).

What does this all mean?  Well, we went through this in explicit detail and have identified no less than 6 (and we're still actively looking) financial institutions that may have passed the EBA stress tests, but have miserably failed our examination - and that's without adding in the bank contagion factor!

To partake in this knowledge, join Veritaseum University and purchase the interactive research asset called "European Bank Contagion Assessment, Forensic Analysis & Valuation".

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So, Brexit. And... Czexit, Pexit, Frexit as EU referendum CONTAGION sweeps Europe amid political quake.

EUEXit gains steam1

EUEXit gains steam

 

Go to 5:38 and you will see I predicted this day exactly 3 months ago. The accuracy is uncanny...

I also called it in 2010 as well. Reference Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!, to wit:

What about the UK?

I'm glad you asked. We just finished our UK analysis (subscribers, see UK Public Finances March 2010 UK Public Finances March 2010 2010-03-24 09:32:01 617.23 Kb), and the Greek theme has continued into the land of the Brits.

uk_economic_estimtes.pnguk_economic_estimtes.pnguk_economic_estimtes.png

... and in terms of government balance over-optimism???

uk_gaovernment_balance_projections.pnguk_gaovernment_balance_projections.pnguk_gaovernment_balance_projections.png

The UK government’s projections are based on real GDP growth of 1.3% and 3.5% in 2010-11 and 2011-12, respectively while the (extremely and unrealistically optimistic) consensus estimates stand at 1.2% and 2.1%, respectively. The latest estimates announced by the EIU (Economist intelligence unit) in March 2010 are even lower at 1.2% and 1.5% for 2010-11 and 2011-12, respectively. The European Commission has also raised similar concerns with the Commissioner for Economic and Monetary Affairs, Olli Rehn, criticizing governments after scrutinizing the strategies of 14 countries, including Germany, France, Italy, the U.K. and Spain, that “their budget projections were based on favorable macroeconomic assumptions after 2010 that may not materialize” (stated in a press article on March 18, 2010)
Raising concerns on the UK, the European Commission also stated that “The U.K. won't meet the EU's recommended target of reaching a 3% budget deficit by 2014-15, and projections for economic recovery may also fall short. Details on how the U.K. government, whose budget deficit is expected to hit 12.7% in the current financial year, will rein back its spending are also lacking. The absence of detailed departmental spending limits is a source of uncertainty”.

Continuously rising fiscal deficit has led to a continuous increase in the government total debt, which increased from 43.3% of GDP in 2007-08 to 72.9% in 2009-10. Moreover, according to EU Commission estimates, after Ireland, the UK is poised to incur the worst deterioration in the gross debt ratio in the EU, from 44.2% of GDP in 2008 to 88.2% of GDP in 2011. Though the average maturity of UK’s debt is considerably higher compared to other nations (thus no refinancing risk in the near future), the expanding interest burden is exacerbating the already strained fiscal deficit.

Moreover, rising debt not only restricts government’s fiscal stimulus and support to the economy, but is also forcing the government to undertake sharp fiscal consolidation measures to moderate the adverse impact of rising interest expenses on the fiscal deficit. This is bound to have an internal deflationary effect.

The government expects an increase in its debt from 55.5% of GDP in 2008-09 to 90.9% in 2012-13. In absolute terms, the government debt is expected to grow from £796.4 billion in 2009-10 to £1,486.2 billion in 2012-13. However, we expect the debt to increase much higher off higher primary deficit owing to relatively lower GDP growth assumptions.

And what about Italy???

Again, we're glad you inquired. Subscribers should download Italy public finances projection Italy public finances projection2010-03-22 10:47:41 588.19 Kb as well as theFile Icon Italian Banking Macro-Fundamental Discussion Noteand the

File Icon Spanish Banking Macro Discussion Note in anticipation of our upcoming Spain analysis, which should be a doozy!

This is Italy's presumption of economic growth used in their fiscal projections:

italian_real_gdp_growth.pngitalian_real_gdp_growth.pngitalian_real_gdp_growth.png

image006.pngimage006.pngimage006.png

image042.pngimage042.pngimage042.png

For those that don't subscribe, there is still a lot of nitty gritty that I made publicly available on Italy here: Once You Catch a Few EU Countries "Stretching the Truth", Why Should You Trust the Rest?

More on Euro stretching of the truth

If you haven't had your fill of innuendo, ambiguity, creativity and sleight of hand (my polite way of saying "lying"), you can peruse Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

For the complete Pan-European Sovereign Debt Crisis series, see:

  1. The Coming Pan-European Sovereign Debt Crisis - introduces the crisis and identified it as a pan-European problem, not a localized one.

On a closing note....

BTC as GBP Brexit hedge

Contact me to learn more about Veritaseum's unbreachable, blockchain-based smart contracts. reggie at veritaseum.com

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Bitcoin is up 40% over the last two weeks. Whoa! 

Zerohedge reports Bitcoin Spikes Above $600 - 2 Year Highs - On Sudden Massive Chinese Buying. Focusing on Chinese buying tends to conceal a very, very important point - the network effect. Alas, I'm getting ahead of myself...

The public Bitcoin network has been growing steadily since its inception 7 years ago - without much of a hiccup. That should tell you something. 

 

Bitcoins in circulation 6-12-2016Bitcoins mining revenue 6-12-2016Bitcoins transaction volume 6-12-2016

Bitcoins Hash rate 6-12-2016

As excerpted from Muneeb's Blog:

The “Bitcoin is bigger than Google” analogy that Balaji is using is technically accurate [1] and extremely interesting if you look at it as Google attempting to do the work that Bitcoin is doing (calculating SHA256) instead of thinking of the Bitcoin network as a general-purpose supercomputer.

And Balaji nails it in this tweet:

It’s not that Google cannot take over Bitcoin. They have more than $60B in cash. But they cannot do it without making huge new investments. Google’s current infrastructure doesn’t give them enough hashing power.

This is a slide that I love to use in my cloud computing lecture at Princeton:

 

Now imagine these football field size datacenters that Google owns. If they shutdown all other operations and point all this compute power to Bitcoin, they still won’t be able to take down Bitcoin.

That is a powerful visualization.

This is why Veritaseum's value trading platform is build upon the public Bitcoin blockchain. It's the network effect, silly!

If you want to learn more about the only capital markets system with over 45,000 tradable tickers built directly upon the backbone of the 2nd largest network in the world (the Internet is the first, for now), download the "Pathogenic Finance" report.

Or if you're lazy, just watch the video....

Friday, 10 June 2016 16:29

European Banks Crash EXACTLY AS WE FORECAST Featured

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ZeroHedge regports:

From Deutsche Bank to Credit Suisse and from Barclays to

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ReggieMiddleton @nguyenatang @thetweetmaestro - Hello :) Happy to meet you, have a great day :)
Saturday, 23 September 2017 00:03
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ReggieMiddleton @nooz81 @exponentreturn - Hello :) Happy to meet you, have a great day :)
Friday, 22 September 2017 23:36

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