As the Banks Fall (Part 4): Deutsche Bank, The Jim Cramer Effect & Bank Consolidations
A little bit of amusement to lighten the mood
Deutsche Bank Credit Default Swap Chart - Source: CNBC
What you're looking at directly above this text is Deutsche Bank's Credit Default Swap (CDS) chart, which I took a screenshot of on Monday, 27 March 2023, at 16:30 EST. As I explained in Part 2 of this series, a CDS is a form of insurance—also a type of derivative—that investors buy to hedge against the failure of a bank. So watch out when 'smart money'—i.e., savvy investors—starts buying up a bank's CDSs. The higher a CDS's price climbs, the less stable investors view the bank.
Deutsche Bank's stock may have gone up $0.44 since last Friday to $9.79, but this is due primarily to the bank's presentation today of "refreshed" numbers to reassure investors. (Source)
My guess, and the guess of many others, is that Deutsche Bank will be the next major bank to fall. While it may be an educated guess, it's still a guess, and all banks are in precarious positions right now.
The Jim Cramer Effect
One of the biggest jokes on Wall Street is to do the exact opposite of what Jim Cramer recommends. Cramer is a former hedge fund manager and currently hosts Mad Money on CNBC, who is famous for getting it wrong. Maybe that’s why he no longer manages a hedge fund.
If there were batting averages for recommending the worst investments, he’d be batting a thousand.
One of his most significant errors was saying on Tuesday, 11 March 2008, “Bear Stearns is fine!” “Bear Sterns is not in trouble,” “Don’t move your money from Bear. That’s just being silly.” Bear Stearns collapsed 5 days later.
Here he is shilling for Bear Stearns. It’s only a 1-minute or so long. (Pardon the poor resolution.)
And another one of his atrocious moments happened just recently, on 8 February 2023, when he started pushing Silicon Valley Bank (SVB) as one of the “biggest winners of 2023…so far.”
(For shits and giggle, you could short the other 8 companies on his list—or at the very least, steer clear. Not financial advice.)
Only 30 days later, SVB collapsed on 10 March 2023.
Here he is pushing a failing bank. The editing is rather amusing. It’s only 3 minutes.
And a few days ago, Cramer gave Deutsche Bank the kiss of death by claiming, “They’re a good bank,” at 02:49. Don’t let either of these media puppets’ sense of surety fool you. Neither of them knows what they’re talking about.
You’ve got to wonder how a supposed “expert” can be so colossally wrong about so much. Do banks (and large corporations) give him or CNBC kickbacks for shilling on their behalf to prevent bank runs or massive stock sell-offs?
And for those who loathe Jim Cramer, the amusement doesn't stop there. Now, there's a brand new Exchange Traded Fund (ETF) called the Inverse Cramer Tracker ETF (Ticker: SJIM). According to TheStreet, "SJIM's investment objective is to engage in transactions designed to perform the opposite of the return of the investments recommended by television personality Jim Cramer," also known as "shorting." (Source)
Bank Consolidations
Last week, we saw Switzerland's UBS absorb failed bank Credit Suisse. First Citizens Bank just announced they'd be buying all the deposits and loans of Silicon Valley Bank (SVB). Expect to see more bank consolidations, especially large and regional banks. TPTB would like to see resources concentrated in a smaller pool of institutions so that central banks can "repurpose" them once central bank digital currencies (CBDCs) are released. The United States' version of a CDBC—they aren't calling it that, but it functions just like one —called FedNow launches in July. Steer clear!
(FedNow: https://www.frbservices.org/financial-services/fednow) Copy and paste link into your browser for more information.
The shit show is far from over, folks. Hang tight.
In my next article, I'll explain how "money" is created out of thin air and the system makes us all debt-slaves, whether we have any personal debt or not.
Catch up on related articles you missed:
As the Banks Fall (Part 3) and Digital Authoritarianism
As the Banks Fall (Part 2): Bankruptcies and Consolidations
As the Banks Fall (Part 1): The Beginning of the End of the Modern Slave System
How to Thrive in Uncertain Times
The US Will Lose Its World Reserve Currency
Central Bank Digital Currencies: The Wet Dream of Aspiring Totalitarians
"In my next article, I'll explain how "money" is created out of thin air and the system makes us all debt-slaves, whether we have any personal debt or not."
Yup, as Chris Martensen has said (its not original but he's the first I heard it from),"all money is loaned into existence". That's a rather revolting revelation, ugh.