Monday, March 30, 2009

Deutsche Bank Chief Risk Officer Says Crisis Far From Over

Hugo Benziger, Chief Risk Officer of DB, spoke today at the Frankfurt School of Finance and Management, saying "we are in the middle of [the crisis]". He added the industry has "an opportunity to build a stable financial system that seeks higher capital buffers, and encourages investors to return money to the market." Apparently Hugo is unaware of the governmental use of seasonal fudge factors which convert new home and retail sales numbers from pathetic to glorious. After all, why create a stable financial system when you can announce that everything is good, fudge some data here and there, and give the impression that everything has been fixed. If that doesn't get investors to return money to the market, nothing will... After all it worked last week... So now that the markets are in full retreat mode, let's see what numbers will receive the "seasonal factor" treatment next. These are the key releases over the next two days (with consensus in brackets):

Case Shiller (-18.60%)
Chicago Purchasing (34.3)
Consumer Confidence (28.0)
ADP Employment (-663K)
Pending Home Sales (0.0%)
Total Vehicle Sales (9.2 MM)
and the all important ISM Manufacturing (36)

Zero Hedge would be willing to bet that at least 5 of these data points will likely receive some peculiar fudging, resulting in totally unexpected upside surprises, and the suckering in of even more "investors", who are unable to be patient enough to listen to Hugo's advice and to actually get a stable market, instead believing that the "credit crisis" will be over as soon as the mortgage application number beats consensus by 1 thousandth of a percentage point. After all who really cares about the $5 trillion in commercial real estate that may or may not have 30% cume losses by 2018, when foreclosure sales in San Bernardino are rising. Sphere: Related Content
Print this post


Ian said...

I think I'd take 30% cum loss over the next ten years in CRE...that seems almost optimistic.

Anonymous said...

cre downturn is just typical of a recession. its hardly the mess housing is.

12th Percentile said...

anonymous above obviously hasn't lived through the past CRE disasters. Talk to some people who owned CRE in the late 80's and see if they think it is "hardly the mess housing is". If you lose all of your money, you lose it all. Doesn't matter what you were gambling on. If you are some joe six pack who loses his house, that is one thing. If you lose your four office towers, that is another. You both lose.

The only thing typical is your uneducated statement. Which makes me very happy

I will enjoy taking your money.

If you don't know who the sucker at the table is, wait until someone sez "typical recession".

thanks for the money.

Anonymous said...

hmmm... not sure i'd want to fight the "fed"...

malus Diaz said...

This has been released by the Comptroller of the Currency:

Page 25:

Goldman Sachs is Leveraged 1000:1

5 Banks have 200 Trillion in Derivatives.

The largest Gold manipulation to ever occur.

Anonymous said...

"hmmm... not sure i'd want to fight the "fed"..."

What does this mean? It is true, the Fed can cause a lot of smart people a lot of pain, but ultimately, it has failed horribly over the past decade, trying to prop up bubbles.

The Epicurean Dealmaker said...

Hugo Banziger is no fool. I credit his continued presence at DB for the relatively less painful a**-raping the firm has taken during the crisis.

That being said, he is no-fool enough not to give the unwashed public the absolutely straight skinny, isn't he?


This article is very timely and relevant. As I quote Cameron Muir, an economist, "Home sales are unlikely to fall much further..That being said we expect home sales not to decline much further."

If the Economy Seems Scaring You Away From Real Estate? It Shouldn't. You can Become 12-Month Coaching Client of Millionaire Real Estate Investor Peter Vekselman Today and Learn Exactly How These Hard Times Can Be The Launching Pad for your Real Estate Career.