Deutsche Bank has admitted it rigged both the Gold market and the Silver market. ZeroHedge has the details in his report Deutsche Bank Agrees To Expose Other Manipulators .

Many asked me to comment. I am shocked?

No. In the wake of admissions of rigged LIBOR and rigged Euribor (bank to bank interest rates in dollars and euros respectively), one would really have to wonder "What isn't rigged?"

To the Moon, Alice?

While some think gold would have "gone to the moon" without this rigging, I wonder if it got as high as $1900 an ounce because of rigging.

The same applies to silver when it topped over $40.

It's logical to believe riggers don't much care about the direction as long as they make money. Hopefully we get more details from Deutsche Bank soon.

This could get interesting.

What Isn't Rigged?

While pondering the above question, let's dive into Deutsche Bank's 2015 Annual Report to investigate other bid-rigging opportunities.

Consolidated Balance Sheet

Deutsche Bank Consolidated Balance Sheet

Detusche Bank has over €515 billion in "positive derivative values" in comparison to €496 billion in "negative derivative values".

Hooray! Deutsche Bank is about €20 billion to the good. But how much was bet?

Deutsche Bank's Derivatives Casino

Deutsche Bank's Derivatives Position

The total size of Deutsche Bank's derivatives casino is €21.39 trillion, notional.

Casino Breakdown

Interest Rate: €15.41 trillion
Currency Related: €4.78 trillion
Equity Index: €0.90 trillion
Credit Related: €0.27 trillion
Commodity Related: €0.08 trillion

How Much Risk on €21.39 Trillion?

Inquiring minds may be asking: How much risk is there on €21.39 trillion?

Perhaps surprising little. After all, interest rate risk could easily be controlled with a few timely phone calls from the Fed and ECB.

What risk isn't controlled that way can always be controlled other ways (as we have seen).

I am pleased to note Deutsche Bank uses "central counterparty clearing services for OTC clearing" and the bank "benefits from the credit risk mitigation achieved through the central counterparty's settlement system."

"Margin requirements for uncleared OTC derivative transactions are expected to be phased in from September 2016."

Whew!

And we can all count on the obvious fact that Dodd-Frank reform has fixed everything.

So, nothing can possibly go wrong with €21.39 trillion in casino bets, just as €20 billion in profits (.0935%) shows.

Addendum

Reader "LongShort" accurately points out:

Mish, with regards to DB's Annual report page 248, you've taken numbers from "Within 1 year" column, while there is "Total" column, summing up different maturities.

The total number of bets is actually €41.90 trillion as shown in the above chart.

Thanks also to reader "Lars" for spotlighting those pages.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Mike Shedlock Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.