Analyzing and reading the experts view on the current situation of Deutsche Bank to that of Lehman Brothers in 2008. Many of them are emphasizing and argue that 2008 is back.
I will argue that the current situation is the iconic milestone of the clear END of the 2008 crisis. Here is my argument:
What was the Lehman Crisis about? In September 2008, we were facing an under-regulated banking sector and fears of rising interest rates (due to presumed inflation generated by USD 140 oil prices).
What is the current Deutsche Moment about? In September 2016, we are facing an over-regulated banking sector (the US Department of Justice throwing an USD 14bn fine at Deutsche Bank) and fears of never rising quasi-zero (in Germany even negative) interest rates. Continue reading “Is the 2008 Lehman Moment Back ?”
September 15 2008 was one of the most extraordinary days in global financial history.A simmering credit crisis exploded into a full-blown apocalypse in the global financial sector when Lehman Brothers filed for bankruptcy.
With assets of $639bn and a further $613bn of debts, it was the biggest corporate bankruptcy in the US. The collapse of Lehman had immediate repercussions, frightening financial markets around the world, but with hindsight its demise has come to embody the failure of investment banks to adequately assess risk and invest accordingly.
Market Performance (from the close before Lehman BK) – Silver +71%, Gold +61%, S&P +58% ( For S&P the dividend are not accounted for. Including dividend it will be close to 88%)
Here is a must watch documentary of 60 min : “The West is done, it’s over! We screwed it all up. Do you want your great-grandchildren speaking Chinese 🙂
Although Lehman brothers is no more in existence but it has provided many strategies to the Investment banking space that are still in use and may be used more vibrantly in the markets.
One of them is the most famous Straight Line Pitch – “Straight line is an impulse selling at its most aggressive and there have been hundreds of thousands schooled and steeped in its traditions over the years”.
Since its beginning in the water street and madison avenue branches of the Shearson Lehman, the straight line has been taught and retaught a million times during countless boardroom meetings and brokerage firm training sessions. Continue reading “The Lehman Method”
In the past few decades, the fortunate among us have recognised the hazards of living with an overabundance of food (obesity, diabetes) and have started to change our diets. But most of us do not yet understand that news is to the mind what sugar is to the body. News is easy to digest. The media feeds us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking. That’s why we experience almost no saturation. Unlike reading books and long magazine articles (which require thinking), we can swallow limitless quantities of news flashes, which are bright-coloured candies for the mind. Today, we have reached the same point in relation to information that we faced 20 years ago in regard to food. We are beginning to recognise how toxic news can be.
News misleads. Take the following event (borrowed from Nassim Taleb). A car drives over a bridge, and the bridge collapses. Continue reading “News is bad for you”