Deutschebank’s Death Throes

Zero Hedge calls it the “most hated dead-cat bounce ever” – as economic fundamentals, and the associated equity overvaluations – have even perma-bullish Wall Street “throwing up all over it.”  Consequently, JP Morgan, Bank of America, and the rest of the “all’s well” crowd are actually telling clients to “sell the rip,” instead of “buy the dip” as they have relentlessly recommended since the dawn of time.  Not that they’ll necessarily be right – as said “experts”’ track record is not much better than the Federal Reserve itself.  Which is to say, horrible.  Then again, both institutions have the exact same raison d’etre – even if for completely different reasons.  Which is, to constantly sell “hope” – in Wall Street’s case, to generate commissions and deals; and for the Fed, to promote confidence in America, and its cancer-stricken dollar.

To that end, for anyone “worried” about Goldman Sachs’ recent recommendation to not only sell, but short gold to $1,000/oz, consider that five of their six “top trades for 2016” were stopped out less than six weeks into the year, due to enormous losses.  And as for their gold short recommendation, they are using the oldest Wall Street trick in the book to pretend it is “right” – which believe me, I know too well, having used it myself when I was a Salomon Smith Barney sell-side analyst (oilfield services, drilling, and equipment) from 1999-2005.  Which is, to “post-date” the price of their recommendation, to take advantage of the very price movement they “predict,” after it has already occurred.

In other words, when Goldman saw the Cartel – which they are a part of – attack paper gold on Sunday night’s “President’s Day Desperation Raid,” they quickly cobbled together a “short” recommendation, knowing full well that if they publish it before the equity markets open, their compliance department would allow them to “price” the recommendation as Friday afternoon’s close.  Which, when viewed historically, gives the appearance of it having been “right” – when in effect, they simply front-run what they knew GLD would open at on Tuesday morning (the NYSE was closed Monday).  Thus, their “short gold” recommendation, which was published early Monday morning – after the Cartel had already taken gold from $1,240 to $1,210 on Sunday night – enables their analysts, already smarting from having been so miserably wrong about their “top six trades of 2016,” to (technically) claim having been “right” about this one.  Which, I might add, they are very likely to be decidedly wrong about in the coming months – from $1,210, $1,240; and much higher numbers.

As for said “hated dead cat bounce,” even I demonstrated visible anger yesterday, in not only watching a second straight day of unfathomably blatant gold and silver suppression – at the same times of day as always, via the same “cap and attack” algorithms; but watching the PPT take the Dow 800 points off of Thursday morning’s lows, amidst not a shred of positive news.  Yes, said “last to go” markets have clearly become far harder to control.  But no, the PPT and Cartel have not yet lost control entirely – as evidenced by said algorithms working their magic in the past three days; in the “Dow Jones Propaganda Average’s” case, via Thursday’s blatant “hail mary” rally; to Fridays’ and yesterdays’ equally transparent “dead ringers.”

Throw in this morning’s equally prototypical early morning Dow futures surge – where essentially all of the stock market’s cumulative gains of the past five years have emanated from; and 601^st “2:15” AM” gold raid of the past 688 trading days, and you can see why a temporary calm has washed over the markets; and news media, which has gone largely silent, after several weeks of non-stop, market-plunge driven reporting.

That said, it’s going to take a lot more fake rallies – and gold caps – to reverse the horrific technical damage incurred in the past six months; which ironically, stair-stepped down with each major Central bank action – from the Chinese Yuan devaluation in August; to the Fed’s December “rate hike”; to the ECBs’ and BOJs’ respective NIRP expansions and initiations in January and February.  Let alone, the collapses of global commodities; currencies; and in many cases, economic indicators to, near to, or below previous all-time lows.  Not to mention, the upside damage caused by gold and silvers’ respective surges.

And given that said news flow has nowhere to go but down, it’s going to be a tall order for the “powers that be’s” rapidly collapsing Ponzi scheme – in the Cartel’s case, amidst record physical gold and silver demand; declining production; and rapidly depleting above-ground, available-for-sale inventories (no, there is no “typo” in the below graph).  To that end, I’m quite intrigued as to how the Fed will doctor the FOMC minutes of its January 27^th meeting to account for current market conditions, when they are released at 2:00 PM EST today.  Not to mention, as less than 12 hours ago, we learned that foreigners sold more U.S. Treasury bonds in December than in any month in history.  To that end, it’s quite strange how Treasury yields have, irrespective, plunged to nearly their all-time lows, huh?

Speaking of manipulative “death throes” – as best illustrated by the People’s Bank of China first devaluing the Yuan, then depleting hundreds of billions of dollars’ worth of reserves “controlling” it’s decline; and the Bank of Japan unequivocally stating it would not take rates negative – only to do so a week later, and two days afterward promise to expand its newly launched NIRP policy with “no limits”; how about the lunacy of what’s going on at Deutschebank, Europe’s largest bank and, in my view (not to mention, the Credit Default Swaps markets’), the “next Lehman.”

To wit, it was just eleven days ago when, with its stock trading at an all-time low, it had one of its “top analysts” pen a passionate plea to the ECB and BOJ to stop cutting rates, accusing such policy of killing Deutschebank’s $70+ trillion derivatives book “business.”  In it, without specifically citing NIRP – but instead, Central bank “easing,” they complained that such stimulus was causing worldwide equity, commodity, and currency declines. Which is quite ironic, given that no one has been more vocally supported Central bank “easing” than zombified “too big to fail” banks like Deutschebank, care of the massive leverage said stimulus catalyzed.

And yet, eleven days later, with their stock “safely” 18% higher – but still barely above its early 2009 spike bottom low – Deutschebank just changed its “stance” entirely, in having a second “top analyst” publish an article whose key point was that “without further policy intervention, there is further downside for equities.”  In other words, eleven days ago policy intervention was bad for equities – but today, it’s systemically necessary.  Better yet, a third “top analyst,” when asked to clarify these blatantly conflicting statements, said it was negative interest rates that were the banks’ bane, whilst QE is decidedly positive.  I mean, how dumb is this guy, in not realizing that NIRP and QE are exactly the same thing; particularly in places like Europe, where the ECB is expanding QE – i.e, monetizing sovereign bonds – that already have negative yields!

Yes, my friends, these are the death throes of a dying financial Cartel, an imploding banking system, and a collapsing fiat currency Ponzi scheme.  To that end, do not for a second take your eye off the ball of what’s really going on.  And please, use “eye of the hurricane” calms like todays’ to PROTECT YOURSELF from the storm’s far nastier “back end.”  I assure you, it’s too late for Deutschebank – and countless dozens of other insolvent banks.  But fortunately, it’s not yet too late for you.

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