DB Over-Hype?

Events over the weekend have led us to considering a “Hype Index” again.

Markets are moved, as we’ve learned, from a combination of both fact and fiction.  We see the ‘facts’ as pretty obvious in the economic news releases and data updates.  But, the fiction?

Ah, there’s the rub.  Fiction depends on who is writing it and what their dreams and fears are.

Over the weekend, a pleasant call from a long-time subscriber asked “So if a bank-in-trouble spins off a ‘bad bank’ to holds credit default swaps, and then let’s the bad bank ‘go down’ who will be stuck with how many trillions worth of losses?”

The question is not hypothetical since later today Deutsche Bank will announce future plans.  Everyone I know (like my consigliere) has been waiting for DB to have its ‘crisis moment’ since their failed co-CEO debacle a couple of years back.  What’s been going on has been more a glacial slide of confidence as the financial engineers try to figure a way out of the corner they’ve painted themselves into.

There are a list of un-answerables as of this morning’s open, however.

What’s true is the BBC is reporting Deutsche Bank begins cutting 18,000 jobs.  And yes, here’s one of those NSS stories that has popped up: “Deutsche Bank’s aim to make profit in 2020 is uncertain: CFO.”  Yah think?

On the other hand, we have to look remain data-based at times like this.  Mt caller noted that there are “Several times US GDP worth of derivatives involved.” 

That’s all well and good, but we need to remember the different between notional values and realizable values.

Show you what I mean.

I hold an IOU for $100 from John Doe.  You hold a $120 IOU from Bill Smith.  The notional value here is $220.

But since you need some ready cash for some others reason, I negotiate down the price I will pay you for the $120 to, oh, say t0 $110.  I’ll pay you that in January.  We agree, shake on it and that’s our ‘set-up.’

Fortunately, my lawyers put language into our agreement that stipulates that if Bill Smith’s credit falls below $110 expected payback, I can renegotiate the deal.

Now, let’s say the value of Bill Smith’s IOU is ‘marked to market’ and is only $105 come January.  You’d have to drop your price to me and if you paid $120 for the IOU,, too bad.  Book the loss and move along.

The important thing is the underlying debt is still there.,  Bill Smith isn’t going to get ‘something for nothing.’  All that happened was that I made a better judgment of Bill Smith’s ability to pay than you did.  Which is what financial engineering is all about.

Now let’s go over and turn on the Hype-o-Meter.

The “Collapse is here!  Go Short!  Get out!” people are likely to be both early and wrong.

But my God, there’s $240 worth of money involved!

Not quite.  Notional is only somewhat connected to realizable.  In this case the Hype-o-Meter says $240 divided by the the more likely realizable loss of $5.

Staring at our machine for a few minutes while it rolls through long-tail interest calculations, we finally get the answer.  Realizable may be closer to 2.0833% of notional, and in reality even less.

The Truth of the Tape

If this is a little too “Urban” for you, let’s use another tool to line up the risk.  (Investopedia has a more ‘correct’ but less fun version of how CDS’ work over here…)

Since Deutsche is nominally a German bank, it would seem logical to us that if the end of the world is nigh, the German marts would be on the ropes and about to be counted out.

They are not.

In fact, the German market was only down 14-points when I looked earlier.  That’s 11-10ths of one percent.  And that, dear reader is not the end of the world in anyone’s book.

In fact, trading variance (noise) was higher in Japan (down almost 1% overnight).

As our first order of business this morning, put down the Malox and start using your head.

The Germans aren’t apparently too worried about one of their banks, so why churn stomach acid here?  Plenty of time for that in Q3-Q4 of this year and especially Q1-Q2 next year when we will have completed whatever the wave counts are doing now.

“What about the Big Earthquake Impacts?”

As I wrote this weekend, natural disasters are a kind of synthetic growth media.  Just like hurricanes up and down the east coast haven’t toppled the market, a distant earthquake and some sloshing pools won’t matter – yet.

There isn’t an insurance company in the world that will cut any checks today on ‘quake damage’ – that takes months and months.  And with distributed risk?  Maybe it will be one more thumb on the scale this fall.

But today?  Pa-leeze….

“What about Politics and the Election?”

True Tom Steyer may toss hat into presidential ring, after all, but he’s just another billionaire with stars in his eyes.  Alexa tells me she knows about 563 American billionaires.  Line’s over there.

Besides, there are some observers (see Fox Leslie Marshall: Democrats are losing the plot in their fight to unseat Trump in 2020, for example) who  are beginning to see Trump as having a commanding chance over all rivals.  Including Joe Biden since Michelle Obama won’t defend him.

As an aside:  The REAL BIG story of today is who’s going to be outed as part of the (alleged) child sex ring which (allegedly) involved Jeffrey Epstein.  The question is well framed by the Forbes headline “Jeffrey Epstein Documents Could Expose Powerful Politicians, Businessmen.”

Which will keep conspiracy types wondering if this isn’t an extension off the Pizzagate allegations.  All in due time.

OK- But the Futures Are Down…”

And?  The market last year, for a couple of days after the holiday weekend had a nice rally.  Running up the red flags will give professionals a chance to really  buy low and then sell high if that’s where we’re going.

Look at Trends, watch the Hype-O-Meter.  And for failing German banks, see how the German’s are taking it.

If we take out the Friday lows, OK, we’ll get interested in a bearish position.  Maybe.

Lots of news to come this week including inflation data and two Powell speaking engagements…all worth close scrutiny.

Markets climb walls of worry.  And to us, looks like another Monday at the Wall…YMMV

The Dudly Sun and Climate

Speaking of Hype:  There are two major stories going on in background most people are totally missing and you need to pay attention to to keep up with class.

First is the report from the Solar Cycle Progression researchers showing the Sun went back to sleep mode in June, as we’ve telling you to expect.

The forward data still offers a view that the Sun will be napping for several years to come and that likely accounts for the weather shifts.  Oh, and notice how the predicted crustal cooling is setting off more Pacific basin quakes.  Amazing stuff, science.

Wake mode in 2025 – just in time for the world war – driven in part by food (which is why we are working on things like continuous yield farming…).

Now Here’s the Hidden Hand

Hat tip to Chris Tyreman of the Chronicle Project for catching this one:

Alberta announces public inquiry into ‘shadowy’ foreign funding of environmental groups.

Take the time to watch the video on this one because it really does matter.

When you’re done with that, click over to this Ben Swann video on how the US National Defense Authorization Act now makes it legal for the the US government to propagandize American citizens.

We’d be willing to be a nickel or two on “climate hype” as one of those areas of “shaping operations – internally.”

We can also see what is coming more clearly now – but more on that Wednesday in Peoplenomics.

Just remember: When you wake up on a morning like this forget the quakes and the D-Bank chatter.  Look at the big picture:

As you go through life, make this your goal

Keep your eye on the doughnut, and not on the hole.

Moron the morrow, my friend!

28 thoughts on “DB Over-Hype?”

  1. DB should be a real good example of how accurate and timely the “Stress Test” is – Healthy today Not So Healthy tomorrow ……..Ure mileage may vary ……

    • The pizza parlor crowd member will walk free.. he like the guy that released videos of other prominent people has way to much on way to many powerful members of political society.
      How can the alphabet govt group really go after those that has a direct influence on their lives and careers..
      In my opinion There will be a major misdirection and some lonely salesman or single mother will take the heat.
      While the truly evil walk free.

  2. G –
    the “WAR” is raging and nary a hint regards the battles..Billionaire & daughter go down in helo crash in Bahamas..day after Epstein/Mossad taken down at Teterboro airport..cowinkydink ?

    Why the dental exam chairs, equipment, rooms on Epstein island..why do they “remove a tooth” as part of the “infernal trade/deal” – Pure Evil

    Human Clones..anyone?

    Wonder the level of revolt in Germany when the Peeps realize they will be bailing out Infernal bankers..again!

    Record amount of global Bonds at ultra low/0% to Negative yield out there – inclined to Sell the hell out that B.S., Euro looks worthless – why the hell are investors not going LONG Gold and other PM’s or dare I mention it..BTC’s?

    Conspiracy Theory note # 1 – July 4th earthquake that strikes China Lake..”tesla shaker” ? what the hell was/is going on underneath that lake bed, besides high energy weapons testing?

    #2 – Andy – have you met/experienced a clone/”chiphead” yet in la la land?

    The coot is gonna need more of Orvilles’ tender white..

  3. Classic ‘shaping’ operations are a category of psychological warfare. Ironic that, in terms of today’s Urban Survival post, the war is being directed at the nation’s own population.

    During WWII, the Korean and Cold War (thru the 50s), the U.S. population was constantly enduring ‘shaping’ operations from on high. The post-war apex was arguably reached in the mid-50s during then Senator McCarthy’s anti-Communism investigations. The Vietnam War and resulting protests put a serious dent in overt government shaping ops for decades.

    The steady ascent of web giants such as Amazon, Google and Facebook have provided the government with new and easy ways to shape the opinions of America’s citizen masses, not to mention gather torrents of personal information for analysis and profiling. It’s akin to a corporate/government ‘Jedi mind trick,’ telling the weak minded how and what to think.

    • “in terms of today’s Urban Survival post, the war is being directed at the nation’s own population.”

      I know W/H doesn’t that just shock the hell out of you.. although I could see it coming way back.. I mean way back.. started mid seventies as the older industrialists started to die off.. then in the Eighties with deregulation’s and Nafta it took a leap never to return to the old industrialist way of life.. and what is surprising is how it increases almost bi yearly now..
      what I find hilarious is that the ones allowing it to happen.. don’t even have a clue that in the depths of some of this crap they have them passing.. THEY ARE INCLUDED.. LOL LOL LOL now that my good fellow is funny….Kind of like Pizzing in a head wind LOL LOL LOL
      why only four or five of them got a clue up there is a shock.. but then GREED is a great motivator and sales tool

  4. G – can you splain about FASB 56, and how Pensions Funds, Mutual Funds ect. invest in criminal enterprises now?

    If the underlying entity issuing Debt (US Govt.- Treasury Securities) are LEGALLY allowed to HIDE their Financials ??

    where is the Mogambo guru when U need him ? 0 bound Interest rates..aaaiiiiiieeeee insanity..now you dont even know how many times past insolvent the FED really is – break The Bank?

    WTF Over?

  5. “put down the Malox and start using your head.”

    God forbid we ever did! It would start a ‘French Revolution’ style of reform in many areas. ;-)

    Just saying — keep the verbose going instead.

  6. George

    “major stories going on in background most people are totally missing and you need to pay attention”.

    Call it woo woo if you want but some extremely important information on UFO activity has just surfaced.

    The latest episode, (#6), of “Unidentified: Inside America’s UFO investigation” has revealed that an Italian helicopter was attacked and grounded by a flying disk. This happened a number of years ago when there were those mysterious and unexplained house fires on Sicily.

    The former head of the Pentagons AATIP investigation team met with former Italian officials who presented him with photographic evidence of the helicopter being followed by the disk and the damage to its rotors caused by an energy beam from the disk. All of this was observed by people on the ground.

    As far as I am concerned this is smoking gun evidence! Pun intended.

    There here people and we need to start treating this as a real world issue and not the Ha Ha that the news room portrays it as.

    Those Navy UFO video’s should have you interested if not very concerned!!

    • I love that show.. but now lets think about this subject of UFO’s and their existence ..

      First off almost every country has pretty much disclosed what they know..
      there are writings that go back way back to the beginning of the written language..
      almost everyone believes they exist..
      At this point its pretty hard to be skeptical anymore on whether or not they exist..
      our technological jump was pretty radical to go from backwoods to modern in a leap..
      Luckily I worked side by side with a gentleman that worked and was one of the brains on ( I wasn’t sure if I could actually tell that part so I redacted it……………… ) (and he had photos of every president and him in the oval office up to Obama) and I discussed all of it with him to see what he knew… in the end my curiosity on their existence was satisfied a long long time ago.. there isn’t’ anything that I question and I don’t have any curiosities whether or not they exist for me at least.Everyone has their personal opinion and belief…
      So since we know that the majority of the people believe in their existence and there are so many other countries willing to share what they know.. why not just let the cat out of the bag..


      My opinion is.. Maybe we don’t want to know… Ignorance is bliss in some cases.. and the fact that we still see new news stories like this.. and then a hundred million dollar smear campaign to discredit it as fake.. makes me question.. that it could be a story we really don’t want to know the truth…


      and its being kept from us to stop any panic over the change in religious beliefs…

    • Saw that episode and did you note the Harry Reid interview? He basically admitted he has knowledge about extraterrestrials visiting Earth but couldn’t admit it because it could affect his “Congressional stature”. In other words, people will say Harry’s gone “round the bend crazy”.
      Sure sounded like an admission to me, and so-called “Soft Disclosure” on UFOs/UAPs is beginning.
      And in his recent interview on Tucker Carlson’s show, Pres Trump admitted he has been “briefed” on the subject.

  7. I bought some stuff recently.

    The other day the heat got to me, I broke down and bought a Lasko box fan from Walmart. Made in U.S.A…… $17.88. This fan weighs around 5LBs. If this fan is not perfectly level, when it’s on high, it’ll blow over when I walk by it. LOL I”m hoping to get two years.

    1 bottle jack from Walmart – it’s a 2-ton, $13.54. I’m sistering joists in the basement and using the jack to lift the in between joists as I sister, you know the deal. The jack’s ram has a slant when I use it to lift. I may return this jack. It’s just not right.

    I also got a 10″ Black and Decker miter saw. No complaints about the saw except for the fact it weighs very little. I’m hoping it lasts for all the projects on this house before burning up. $99.00.

    Wood is a problem. I need a bunch of 2″x8″x12′ – most of the stock at Home Depot had cracks along the lengths of the boards. I got one good board yesterday, I’m going back to look though the pile shortly.

    Speaking of Walmart…. don’t forget situational awareness. The other night I was at Walmart.

    Over the loud speaker, “We are evacuating Walmart, please evacuate”.

    I was back in the auto/hardware area. I didn’t know where any doors were. I left my cart and started walking along the wall that I new terminated at the garden center, which has exits. Nearby to me customers began asking me what the dealio was.

    Over the loud speaker, “We are closing Walmart, please bring your purchases up front for immediate check-out”.

    Talk about confusion. Some people were disregarding the announcements all together and continued to shop.

    Upon exiting I asked why? I was told someone scrawled a bomb threat on the bathroom wall.

    Walmart has a very nice video surveillance system. Walmart uses the Bosch IP Cameras with facial recognition. I don’t know if the perp was caught.

    Speaking of surveillance systems… my best recent purchase was a Wyze indoor IP camera from Home Depot, $29.99. These cameras go for twenty online without the SD card.

    This camera is great. It sees through windows and everything. I’m not disappointed with this purchase.

    The disadvantages is that the camera can’t “see” through the window at night when IR is enabled because of glare and the motion senors don’t work through glass. But hey, for thirty dollars, give it a try if you need a camera.

    For $10.00 more, they have the same camera with a panning feature!

    Note: the Wyze camera requires an Android/Apple cellphone. If you use a Windows PC, the work around is the Bluestacks 4 emulator.

    Wyze Cam

    Clearly see the moments that matter

    1080p Full HD Night Vision 2-Way Audio


    • “1 bottle jack from Walmart – it’s a 2-ton, $13.54. I’m sistering joists in the basement and using the jack to lift the in between joists as I sister, you know the deal. The jack’s ram has a slant when I use it to lift. I may return this jack. It’s just not right.”

      you can get different heights of jacks.. be careful to make sure where the sheer points are so you get maximum strength..
      you can do a hidden reverse joist to… easier to hide


      • Thanks, LoB –

        The existing joists I’m sistering against are cupping and warped. I think back in time there was a water problem here. I can’t get the new joist flat/level and flush against the old. :( There are some narrow gaps between the joists…. but the floor above is now flat and level.

        I initially fabricated a brace from 2x4s and it shattered so ended up buying a Tiger Pole. :) The pole has got two big bolts on the side so I don’t think I’ll be able to re-purpose as a stripper pole when I’m done.

        Once this pole is plumb, it’s seems stable. I ended up returning the bottle jack for a 2-ton trolley jack. I think this trolley jack might be leaking hydraulic oil, $28.72… or maybe the 2-ton is undersized.

        I sister-ed four easy ones yesterday. More to go. Today I have one easy joist left…. but getting it is difficult. I’m using screws to fix the new joist to the old. Two screws on each and and two in the middle. I choose screws because I need horizontal bite and not vertical shear.

        The remaining that have an electric line fished through…… I have to pull the electric line out before sistering. I’m debating drilling holes into the new sister joists and re-fishing the electric line back through, it’ll be a 1/2″ hole…. or I have to come-up with a new strategy – like conduit and junction boxes.

      • No problem with drilling after sistering.
        I’d sister after a painted on a thick layer of TiteBond waterproof and pretend I’m building a glue-lam platform. Some slate over that and a huge pool table comes to mind…

    • ON sistering joists.. I totally forgot that if your out of work.. money may be tight.. you can take two two by fours and make a scissors jack to lift .. one the height that you want the other just slightly shorter.. oh heck.. its hard for me to explain without it getting confusing fortunately I found a video showing how its done.. basically a lever scissors jack.. the ancient Romans were pretty slick on how they were able to lift and move heavy weights..


      I hope that helps with the project..

      • I’ve used the scissor jacks that came in my cars as well as jack posts to raise joists and finesse other beams. You can find them for cheap in the junkyard or harbor fright. Just remember to put them(and their handles) back in the car again!

        Hydraulic jacks are great for heavy lifting, but they do have a tendency to leak after a long time under load. Use them to lift and then block.

    • OOWS…. I have straightened some gnarly stuff in the past.. god I dislike warped wood.. usually I look to see which direction the grain is running.. look to the heart then flip.. heart up heart down.. that way if one starts warping in one direction the second will warp in the opposite to keep it level.

  8. In future 4th parades, look for the Space Force to fly over in triangle shaped anti gravity planes. Trump will have Putin sitting next to him at the parade. If you spot an Alien UFO, you can communicate with it using Remoting Viewing. If the UFO is one of our Armed Forces Ships, run ,because it is going to abduct you, & it won’t be fun.

    Does Trump respect the Deep State agenda like all the other polititions in the Washington pig pen? Yes. The last Deep State rebel polititions were Jack Kennedy & Bobby Kennedy. No need to say more here. We have a pick the lesser of 2 evils Political System. Trump is the current best bet.

    How the liberals plan to control you: “Beatings, torture, electrical shock, burials, near-drownings. They will bring you to the point of death, and then they will save you, and the person doing this will be your rescuer or god, and will say, ‘I’m the one that saved you and remember that.’ And that person will become your handler – your programmer.” Of course they will add their own special twist to the senario so you don’t see it coming. This is what preppers call the SHTF time. 

  9. We have so many laws and acts now, that when another is added, amended, or abolished, it doesn’t faze anyone UNTIL someone very smart with a great memory follows the threads to what these really meant. Your case in point about the changes on propaganda and US citizens is spot on! Because the legal system and politics is such a convoluted mess, average people do not see the smoke before the fire. When they do, it’s too late; There is no house anymore. Sad times when politicians whom we entrust to speak for us makes changes that serve some specialized interest, instead of the people who put them in office.

  10. Here’s an interesting take on the solar minimum and the “forced” migration of millions to Europe from Northern Africa. Here’s an interview on the SGTreport….https://youtu.be/NkWU3lTtLsE Start listening at about 6:30 on the link. Summary: There’s a claim that the areas of Northern Africa where the immigrants to Europe are coming from are getting wetter, and will soon be able to be farmed providing the majority of the people have vacated.

  11. I will take the extra large popcorn and I am NOT sitting in front of the fan, but I want to watch those that are….
    what if the earthquakes were man made? deep underground bases(China Lake) and reptilian stories come to mind,,,is human history making a RIGHT turn,Clyde? (Clint Eastwood movie line)

  12. What really concern’s me about sunspots: If you grab the historical chart, back to the mid-eighteenth Century (or further), one sees the activity peaks and troughs over a much more significant time-slice. The periods of peak activity have been declining in sunspot frequency for hundreds of years now. Projecting this trend out through the 21st Century appears to indicate three more cycles before a nearly flat-line that’s completely devoid of sunspot occurrence or activity.

    Dunno what significance such a thing would have, but relocation to a tropical mountain by the year 2060 may become a worthwhile point of consideration, assuming we don’t blow ourselves to bits in the interim…

    • 2060? How many of G____’s readers will really be around in 2060 ? If a grand solar minimum is going to occur in our lifetimes, we should start seeing the fast slide down the curve by the end of next year. Prolonged winter abnormal arctic cold in the central US, Canada and central Europe will be the tells. I have no idea if these theories are right, and I have posted this before, but in the interest of spurring discourse:


      The weather guys all seem to revile this work, which was done by theoretical math and physics types. And as you know, your favorite talking head weather guru is never wrong.

      • Not many, and I’m not likely to be one.

        It seems to be something no-one has noticed…

        It is a trend which indicates solar maximums are becoming “less maximum.” The trend line is consistent, and can be run back as far as the Icelanders kept astro records. I spotted it the last time George posted sunspot charts — Got a wild hair and started poking back further into sunspot history.

        That said, if’fn you look at these historical charts, what appears to be in the cards for ~45 years down the road is a period, perhaps hundreds of years in duration, where sunspot activity approaches zero, then stays there. It is something which is exponentially more-radical than a Maunder Minimum. There is nothing in recorded Western history to indicate what it might portend, and I doubt archaeologists are looking at Egyptian or Mayan astro-related glyphs with anything like this in mind…

        Please, feel free to check my work…

      • Ray – I wonder if there is something in the published ice core data which would correlate with your observation. Then you could push the dating back further to look for cycling and transitions, especially around the last ice age.

      • Possibly…

        My geo field of expertise is pretty much limited to letting folks downwind know when an EF4 is about to relocate their house.

        That said, when I hit my limit in RE GW moonbats, I let them know that 35 generations ago ancestors of mine farmed a piece of Greenland that’s now under 2880 ft of ice, that at that time the world’s wine capital was England, because (save the Alps) it was too hot on the Urepeein continent for grapes to even grow, and that those ships, stuck and buried in the Arctic icepack were sailed, not carried to their resting spot. I then ask them to prove to me that THAT was not the Terran norm.

        — Mentioned because Greenland cores DO rather support my waning sunspot observation.

        I don’t really care about sunspots going away. What I care about, and what I’ve been able to find zero data on, is: What happens during a really prolonged period without sunspots and solar flares…?

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