If "Europe Is Fine" Why Is Deutsche Bank Deleveraging At The Fastest Pace Since The Crisis of 2011?

Early today, Deutsche Bank disappointed markets when it reported a second quarter Net Income number of €335 million, or half of what the company made in the previous quarter, and less than half of what consensus expected. However, just like in the US, where as we showed previously it was FASB accounting gimmicks that "allowed" Bank of America to convert a loss into a $4 billion profit, so Deutsche Bank'sreal Net Income, aka its Total Comprehensive Loss, number when factoring all the other MTM Income Statement components such as AFS, FX translation and pension adjustments, was lower by €1.1 billion.

But not even that was the real story in DB's numbers. Recall that it was Zero Hedge who in April first brought attention to Deutsche Bank's epic, single biggest on earth, total gross derivative exposure of €55.6 trillion, bigger than that of JP Morgan: disclosure which as we understand caused some consternation among German political circles. This followed our previous disclosure from May 2012 when we first reported that the bank's Core Tier 1 ratio as the worst of any bank in Europe, and thus the world. This was subsequently reinforced by none other than former Kansas Fed president and current FDIC Vice Chairmam, Tom Hoenig, who said that Deutsche Bank is "is horribly undercapitalized... it's ridiculous." Naturally this means that just like every US bank, the real story is not in the income statement but in the balance sheet.

It is here that we find something disturbing, but maybe also positive.

Recall also that when we reported that Deutsche Bank's total notional gross derivative exposure as of December 31, 2012 (alas only updated once per year) was €55.6 trillion, we observed that this number has an accounting net equivalent on the bank's books of two components: a positive market value of €777 billion and a negative market value of €756 billion.

It is when one observes the decline in Deutsche Bank's two net derivative exposures since 2011, one notices something curious: over the past year, the nominal net exposure of the bank's positive and negative derivative market values has collapsed from a combined total of €1.678 trillion to just €1.253 trillion, with consecutive declines over each of the past 4 quarters for a cumulative net deleveraging of €425 billion.

Furthermore, as the chart shows, over the same time period the bank's excess deposits over loans initially rose to a two year high of €204 billion and has since declined to just €166 billion: the lowest in two years.  Finally, looking merely at DB's total assets, these too peaked in June of 2013 at €2.24 trillion and have since declined by €1.91 trillion.

Which begs the question: if Europe is so "fine" and on the verge of a "recovery" as its politicians repeat day after day, why is the biggest bank in Europe, and also the biggest bank in the entire world in terms of gross derivative exposure, deleveraging at the fastest pace since Europe's near-death experience in the summer of 2011?

Finally, and back by popular request, here once again is Deutsche's total derivative nominal gross exposure compared to Germany's GDP.

Catastrophic Economic Outlook

GLobal Economic Crisis

Federal Workers Got $155M in Tax Dollars to Work for Labor Unions

Federal employees were paid more than $155 million of taxpayer dollars in 2011 for spending more than 3.4 million hours of "official time" on labor union activities that fell outside their assigned government duties, according to a survey by the Office of Personnel Management (OPM).

"Voluntary membership in Federal sector unions results in considerable reliance by unions on the volunteer work of bargaining unit employees, rather than paid union business agents, to represent the union in representational matters such as collective bargaining and grievances," the OPM stated.

But these "volunteers" were doing their union work on government time.
The Internal Revenue Service and the Department of Veterans Affairs “have hundreds of employees on their payroll that do nothing but full-time union work paid for by taxpayer dollars,” declared Sen. Tom Coburn (R-Okla.) after introducing The Federal Employee Accountability Act (S.1312) earlier this month to repeal most “official time off,” which Coburn called “a grievous violation of the public’s trust.”

Rep. Phil Gingrey (R-Ga.) has introduced a companion bill in the House (H.R. 107) that would repeal “official time” provisions except in cases where an agreement is reached for “necessary activities.”

This was “an increase of 9.66 percent compared to FY 2010,” OPM found. Furthermore, “the cost of ‘official time’ hours increased by 11.86 percent” from 2010 to 2011.

Official time is defined as “paid time off from assigned Government duties to represent a union or its bargaining unit employees,” according to the OPM report. Title 5, Section 1731 of the U.S. Code states that “any employee representing an exclusive representative in the negotiation of a collective bargaining agreement under this chapter shall be authorized official time for such purposes.”

According to the OPM survey, top “official time” spenders included Veterans Affairs ($42,565,000.79), Treasury ($27,314,928.23), Transportation ($17,712,397.98), and Defense ($13,996,108.85).

But other federal agencies exhibited the highest percentage increase in official time hours used between 2010 and 2011, including the Federal Election Commission (441 percent), the Consumer Product Safety Commission (371 percent) , the Pension Benefit Guaranty Corporation (291 percent), and the National Credit Union Administration (234 percent).

“The Obama administration abruptly stopped disclosing official time usage,” a spokesperson in Coburn’s office told CNSNews.com. “The only way to get the information now is through Freedom of Information Act and congressional requests. Our requests to date have not been answered, and more are forthcoming.”

The Civil Service Reform Act of 1978 gives federal employees permission “to facilitate implementation of new workplace initiatives that enhance employees’ ability to effectively serve the public,” “to negotiate contracts and other collective bargaining agreements,” and “to represent employees in grievances and disciplinary actions,” among other things.

“Official time is directly negotiated in CBAs [collective bargaining agreements],” the Coburn aide continued. “If Dr. Coburn’s bill becomes law, future contracts would not be able to include most of the official time agreements.”

Coburn also introduced another bill (S. 1338) that would require OPM to submit an annual report to Congress regarding the use of official time by federal employees.

“Generally, when Congress passes a law, a contractual provision that violates that statute becomes unenforceable, and the executive branch is bound to follow the law. This administration, however, does not always take to court to enforce or defend the law,” Coburn’s aide added, noting that the determination of whether certain activities are legitimate exceptions “would likely fall to federal courts.”- 

See more at: http://cnsnews.com/news/article/federal-workers-got-155m-tax-dollars-work-labor-unions#sthash.bR2xTQOI.dpuf

Russia to Strengthen Airborne Forces With 3 Brigades

MOSCOW, July 31 (RIA Novosti) – The Russian military is to assign an additional three air assault brigades to the Airborne Forces (VDV) in order to boost its rapid reaction capability in future conflicts, VDV commander Col. Gen. Vladimir Shamanov said Wednesday.

“The Airborne Troops will become the core of Russia’s rapid reaction forces, and in order to ensure that…the paratroopers are capable of performing this task, I proposed to the Russian military leadership to reassign three air assault brigades from the Eastern and Southern military districts to the VDV,” Shamanov said in an interview with RIA Novosti.

“My proposal was approved,” he said, adding the brigades could join the Airborne Forces as early as October or November.

The Airborne Forces consist of about 35,000 men deployed in four divisions and a brigade. Despite their elite status, less than 30 percent are currently professionals, though Shamanov said the VDV hopes to have about 80 percent professional soldiers and only 20 percent conscripts in its ranks by 2015.

That ratio is optimal for the creation of a solid basis for mobilization and training purposes, he said, with conscripts having the choice of continuing their service as professional soldiers or officers after a year of mandatory service.

Shamanov also confirmed that the Airborne Forces will soon receive several advanced BMD-4M airborne fighting vehicles and Rakushka armored personnel carriers for testing in field conditions by 2015.

The BMD-4M is the latest modification of an armored combat vehicle that can be para-dropped to provide firepower and support for airborne troops. It features a new chassis, a digital fire control system and high-precision weaponry, including a 100-mm gun.

The 13-ton vehicle has a crew of two and can carry six paratroopers.

The Russian military is expected to acquire at least 1,000 BMD-4Ms under the current rearmament program by 2020, the army says.

RIA Novosti

The New America and Global Tribulation!

The American Left rejoices greatly in its new "lawless revolution"under Barack H. Obama that has finally over thrown our Founding Father's vision of America. Today the Left celebrates the birth of a new nation to replace our old one which was founded on the Laws of Nature and of Natures God. Almighty God and His moral absolutes for this physical world have been finally ousted from our schools, public squares, lives and three branches of government. Godlessness, secularism, technological tyranny, lawlessness, moral relativism and Big Government are now the new gods of America and as we look back at what once was America we now must understand that we are now in a new era, a new realm, a new estate ever evolving into a fascist tyrannical state of despotism and anarchy.

The god of this world and the individuals behind the American Lefts fascism have hid for years behind the smiley face of change, peace, human rights, liberation and social justice all which are the subtle euphemisms of lawlessness.


 

What is mind blowing and quite sobering is that countless Americans (great and small) continually ask themselves how did we get to this place? The god of this world and the individuals behind the American Lefts fascism have hid for yearsbehind the smiley face of change, peace, human rights, liberation and social justice all which are the subtle euphemisms of lawlessness. This smiley face has now revealed its self to all who would see it as the consuming Dragon of old, the god of this fallen world and demonic tyrant of Adam's fallen race (John 8:44, Eph. 6:12, Rev. 12:9).

Make no mistakes my friends more is at work here then the hands of lawless man.

 

Make no mistakes about it my friends... more is at work here in the U. S of A then the subtle out workings of lawless man (2 Cor. 4:3-4, Eph.6:12). The Master politician (aka. Lucifer) has now set the stage for his soon reception and 666 global state (2 Thess. 2:3-12, Rev. 13) in which none shall escape (1 Thess. 5:1-4, Rev. 6-19). America, its founding and its Gospel outreach has been for the last 400 years a dam holding back Satan's lawless global designs. He has been constantly chipping away at our foundations for decades, eroding our Judeo/ Christian founding and dumbing down our inhabitants one generation at a time with his godless thugs... and here we are at the end with HORRIFIC global tribulation at our door (Matt. 24, 2 Thess. 2:3-12, Rev. 6-19).

but honestly dear friends... who will hear Almighty God's saving message! .

 

Our nation's inhabitants ONLY hope in this dire hour is for each American to personally turn toAlmighty God and to His saving grace before the Day of Almighty God's Wrath arrives... but honestly dear friends... who will hear Almighty God's saving message (John 3:16-17, Acts 16:29-31)? For this ETERNAL REALITY is what this little existence here in this fallen world is all about. Almighty God has provided a Savior for time and ETERNITY and may you be sure that you truly know Him (John 3:16-17).

The Kingdom of Heaven is at hand!
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DJP I.F.

The Ignorant Fishermen Blog

Government can grab cell phone location records without warrant, appeals court says

In a major victory for the Justice Department over privacy advocates, a federal appeals court ruled Tuesday that government agencies can collect records showing the location of an individual's cell phone without obtaining a warrant.

The 2-1 ruling by the 5th Circuit Court of Appeals in New Orleans upheld the Justice Department's argument that "historical" records showing the location of cell phones, gleaned from cell site location towers, are not protected by the Fourth Amendment.

A key basis for the ruling: The use of cell phones is "entirely voluntarily" and therefore individuals who use them have forfeited the right to constitutional protection for records showing where they have been used, the court held.

"The Government does not require a member of the public to own or carry a phone," wrote U.S. Judge Edith Brown Clement in an opinion joined by U.S. Judge Dennis Reavley. The opinion continued: "Because a cell phone user makes a choice to get a phone, to select a particular service provider, and to make a call, and because he knows that call conveys cell site information ... he voluntarily conveys his cell site data each time he makes a call."

The issue of cell phone location data has become a major and increasingly contentious battleground in the privacy wars. Privacy advocates argue that the proliferation of cell phone towers in the U.S. – 285,561, according to the latest industry records, more than double the number 10 years ago – and new technologies, such as smartphones, permit law enforcement agents to track highly sensitive information about where individuals have been – their homes or trips to see doctors, friends or lovers – without making a showing to a judge that there is "probable cause" that a person has committed a crime.

NBC

Mexico keeps constant eye on Popocatepetl volcano

MEXICO CITY (AP) — In a clean, hushed room in the south of Mexico City, cameras, computer screens and scrawling needles track the symptoms of a special patient, as they have every second of every day for the past two decades. The monitors indicate that "Don Goyo" is breathing normally, even as he spews hot rock, steam and ash.

That kind of activity isn't unusual for the 15,000-foot (4,500-meter) volcano, Mexico's second-highest, whose formal name is Popocatepetl, or "Smoking Mountain" in the Aztec language Nahuatl. But this volcano, personified first as a warrior in Aztec legend and now as an old man grumbling with discontent, is in the middle of two metro areas, where his every spurt can put 20 million people on edge.

Mexico's National Disaster Prevention Center laboratory keeps a round-the-clock watch on Popocatepetl, with anywhere from six to 15 technicians analyzing data for signs of a full-scale eruption, which they can never fully anticipate.

Though lava or glowing rock would only travel so far, an explosion could be deadly for 11,000 people in three farming villages within 10 miles (16 kilometers) of the base because of landslides and hot gas. A spectacular plume of ash could also wreak havoc on one of the world's largest metro areas, much as it did in 2003, when the sky over Mexico City more than 40 miles (65 kilometers) away nearly went dark in the middle of the afternoon. The neighboring city of Puebla on the other side of the volcano from the capital would also be clouded over.

"The volcano is like a patient, and we observe the different aspects," said the center's technical director Gilberto Castelan. "Here we receive over 60 indicators in real time."

The 20-by-30-foot (6-by-9-meter) laboratory resembles those that once housed old giant supercomputers, everything plain white with a server at one end and screens all around. Five remote-controlled cameras positioned on the side of the mountain emit real-time images, while sensors feed data to the constantly scrolling seismographs as the crew and volcanologists analyze the concentration of gases and changes in the shape of the mountain. The loudest laboratory sound is a regular ping that alerts technicians to every seismic shift, at least a half dozen an hour.

The data helps set the "volcano stoplight," a three-color system in which green means little activity, yellow means warning and red starts the evacuation process — something that has occurred only twice since 1994, when the volcano awoke again after sitting dormant for seven decades.

"It's one of the most advanced laboratories of its kind in the world, and the scientists in charge are using the best methods," said Michael Sheridan, a volcanologist at the University of Buffalo in New York who has studied Popocatepetl. "It is very difficult to predict the behavior of a volcano that has not had an eruption in recent history."

Earlier this month, Popocatepetl released ash that grounded plane flights and dusted cars, but it quieted down enough last week for the warning to drop from yellow-3 to yellow-2. The Mexican government has designated evacuation routes and shelter locations in the case of a bigger explosion.
Yahoo News

U.S. intelligence: Al Qaida plotting attacks on U.S. civilian jetliners

WASHINGTON — Al Qaida’s network in Yemen is planning to conduct bombing attacks on American civilian aircraft.

Ibrahim Hassan Al Asiri. /Saudi Interior Ministry/Landov

Officials said the intelligence community has traced a plot by Al Qaida in the Arabian Peninsula to blow up a commercial airliner or cargo plane.

They identified the AQAP planner as Ibrahim Hassan Al Asiri, believed to have taken over the Al Qaida network in Saudi Arabia and Yemen in wake of the U.S. assassination of Said Al Shihri, deemed the deputy commander of the insurgency movement.

“There is intelligence that he has unfortunately trained others and there’s a lot of effort to identify those folks,” U.S. Transportation Security Administration head John Pistole said.

World Tribune

'Comet of the Century' already may have fizzled out

CAPE CANAVERAL, Florida (Reuters) - Astronomers slated to meet this week to discuss observing plans for Comet ISON may not have much to talk about. The so-called "Comet of the Century" may already have fizzled out.

"The future of comet ISON does not look bright," astronomer Ignacio Ferrin, with the University of Antioquia in Colombia, said in a statement on Monday.

Ferrin's calculations show the comet, which is currently moving toward the sun at 16 miles per second, has not brightened since mid-January. That may be because the comet is already out of ice particles in its body, which melt as the comet moves closer to the sun, creating a long, bright tail.

Another theory is that the comet is covered in a layer of silicate dust that snuffs out water vapor and other gases that brighten the comet.

"Comet ISON has been on a standstill for more than 132 days ... a rather puzzling feat," Ferrin wrote in a paper submitted to the Monthly Notices of the Royal Astronomical Society and posted online at the archival site arXiv.org.

The comet, named ISON for the International Scientific Optical Network that made its discovery, was found in September 2012 by two amateur Russian astronomers.

It is due to pass about 724,000 miles (1.2 million km) from the sun on November 28. The relatively close pass was expected to create a massive tail that some scientists predict will be visible even in daylight.

If it survives, that is. At that distance, the comet would reach temperatures of about 4,900 degrees Fahrenheit (2,700 degrees Celsius) - hot enough to melt lead. It may also be pulled apart by the sun's gravity.

Scientists believe the comet hails from the Oort Cloud, a cluster of icy rocks that circle the sun about 50,000 times farther away than Earth's orbit. Calculations show Comet ISON is making its first - and possibly last - voyage into the inner solar system.

Yahoo News

China issues heat alert as 'hottest July' hits Shanghai

In Shanghai, at least 10 people have died from heatstroke, as the city experiences its hottest July in 140 years, reports say.

Local journalists have demonstrated the heat by frying meat on the pavement.

The national heat alert covers nine provinces, including Anhui, Jiangsu, Hunan, Hubei, Shanghai and Chongqing.

According to figures from the Shanghai Meteorological bureau, Shanghai has seen 24 days with temperatures at or above 35C in July.

"It should be a new record since Shanghai had its own weather recording," said chief service officer Wu Rui.

"Also, in July of this year Shanghai reached 40.6 degrees Celsius, its highest ever temperature. So the highest temperature in July also broke a record."

 

More than 10 people in Shanghai have died after suffering from heatstroke, state-run news agency Xinhua said, citing health officials.

In a TV report, journalists from Shanghai TV said they successfully fried a pork chop on a marble slab outdoors in just 10 minutes.

The practice appears to have become popular, with photos of slices of bacon and fish being barbecued outdoors by the heat appearing online.'Impossible'
The China Meteorological Administration issued the level two emergency heat alert on Tuesday.

"Anhui, Jiangsu, Hunan, Hubei, Zhejiang, Jiangxi, Fujian, Chongqing and Shanghai meteorological bureaus should enter into emergency response on the basis of actual weather conditions," it said on its website.

It added that weather forecasts suggested that some areas south of the Yangtze river, including Chongqing, could experience temperatures of over 35C until 8 August.

It urged members of the public to avoid outdoor activities and to take protective measures against the heat.
"It's impossible for people to live without an air-conditioner," a resident was quoted by Reuters news agency as saying.

"Just going outside in this kind of temperate can roast people."
BBC