MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘Deutsche Bank’

Here’s The Real Price for Going Woke

Posted by M. C. on November 27, 2023

So when it is all said and done, anyone expecting electricity prices to come down due to the wonders of “free wind” is in for a nasty surprise. This ultimately is going to lead to higher electricity prices and that is higher inflation, higher interest rates, and everything thereafter.

by Chris MacIntosh

It seems that each week that goes by we come up with variations of the same themes, one of which is supply destruction and restriction of fossil fuels. For want of doubt check out the latest garbage from Deutsche Bank. It seems that the energy crisis of last year taught them nothing. Without coal, where would Germany be?

Deutsche Bank’s actions are nothing short of malthusian (depopulation):

Deutsche Bank AG is expanding restrictions on its financing of coal, one of the main sources of energy in its home market of Germany, as part of a wider crackdown on high-emitting sectors.

Companies that have “no credible plans” to reduce thermal coal’s contribution to their revenue below half by 2025 will see their financing cut off, the Frankfurt-based bank said in its initial transition plan, published on Thursday. For companies operating outside the OECD, the revenue threshold is 30% by 2030.

Here comes the “contradiction:”

For coal, Deutsche’s target covers both thermal and metallurgical coal and builds on an existing thermal coal policy. The bank is aiming for a 49% cut in absolute terms in the broadest measure of financed emissions — known as Scope 3 — by 2030. By 2050, its goal is a 97% reduction. In cement the bank is targeting a 29% reduction in Scope 1 and 2 physical emissions intensity by 2030, and a 98% reduction by 2050.

We say contradiction because without met coal you don’t have any steel, and without coal you don’t have any cement (thermal coal is mainly used in the cement manufacturing process). And without thermal coal you don’t have any electricity… and without electricity you don’t have any aluminium (amongst other base metals) or polysilicon.

Cutting a long story short: without coal you cannot produce renewable energy producing equipment.

But wait, this story becomes even more logic defying. From a bloomberg article:

Here is an excerpt from the EU Commission press release:

Achieving the recently agreed EU target of at least 42.5% renewable energy by 2030, with an ambition to reach 45% renewables, will require a massive increase in wind installed capacity with an expected growth from 204 GW in 2022 to more than 500 GW in 2030.

Can this be achieved?

Well, miracles have been known to happen from time to time:

See the rest here

Be seeing you

Posted in Uncategorized | Tagged: , , , , | Leave a Comment »

Deutsche Bank Now Modeling German Households Chopping Wood To Keep Warm This Winter

Posted by M. C. on July 16, 2022

You read that right: the largest European bank now predicts that a growing number of German households will be using firewood for heating! Maybe allowing a petulant Scandinavian teenager to set the country’s energy policy was not the brightest idea after all.

Tyler Durden's Photo

BY TYLER DURDEN

https://www.zerohedge.com/markets/deutsche-bank-now-modeling-german-households-chopping-wood-keep-warm-winter

Yesterday we reported that just in case the world didn’t have enough things to worry about, it is now also petrified about Europe’s potential “doomsday” on July 22 when Putin will decide the fate of the continent: if he resumes gas flows along the Nord Stream 1 pipeline which is currently undergoing ten-day maintenance, things will be back to normal(ish). If not, this is the scenario contemplated by Wall Street strategists: “European stocks plunging 20%. Junk credit spreads widening past 2020 crisis levels. The euro sinking to just 90 cents, before a full-blown recession slams the world’s 2nd biggest economy.”

Then overnight, in a note from Deutsche Bank senior economist Eric Heymann (available to pro subscribers), the largest German lender laid out the three most likely scenarios for what the post-maintenance period could look like. As Heymann writes, “we developed three scenarios on how Russian gas supplies to Germany via Nord Stream 1 as well as the transition point Waidhaus might evolve over the next few months.”

  • Scenario 1: Status quo ante. Here, DB assumes that Russian gas deliveries return to the level we had seen in the weeks before the current maintenance period of Nord Stream 1, i.e. 60% below the level at the end of May.
  • Scenario 2: Balanced on a knife-edge. Here, the bank assumes another halving of Russian gas supplies via both pipelines. That would correspond to only 20% of Russian gas supplies seen until May 2022 (this scenario was validated today as described in “Gazprom Casts Doubt On Reopening Nord Stream Even As Canada Grants Sanctions Waiver For Stranded Turbines“).
  • Scenario 3: This is the downside case: welcome to a winter of gas rationing. In a third scenario DB assumes that Russia completely turns off the gas taps to Germany after the maintenance period. That also includes supplies via Waidhaus over the next few months. This is quite a large number in historical comparison even though it is below the recent peak of roughly 3,000 GWh per day. The Netherlands and Norway have already increased their exports to Germany since late May by roughly 20% (with significant volatility).

So far so good, and there is much more in the full note available to pro subs – which we strongly recommend that anyone living in Europe and naively believing the local energy propaganda, must read now. But what we find most remarkable is DB’s assessment not of supply but demand, i.e., the bank’s projection of German gas consumption.

Here, as Heymann writes, demand will remain some 10% below the respective level one year ago over the next few months: “This reduction is driven by savings of private households, industry, and the services sectors, incentivized by very high gas prices.”

It gets worse: according to DB, the overall weaker economic development – because as a reminder, Europe will very soon be in a deep recession – will dampen gas demand in the manufacturing industry.

But the punchline is when DB contemplates possible “substitution for gas” by other energy sources – the bank lists hard coal and lignite in the power sector, as for private households, it predicts that “wood will be used for heating purposes where possible,” while industries will switch to oil derivatives, all of which contributes to lower gas demand.

You read that right: the largest European bank now predicts that a growing number of German households will be using firewood for heating! Maybe allowing a petulant Scandinavian teenager to set the country’s energy policy was not the brightest idea after all.

Finally, DB notes that both savings and substitution have already led to a reduction in German gas consumption by more than 14% yoy in the first five months of 2022. However, as the bank notes, “large shares of these savings are driven by the mild winter 2021/22 which is why we assume a reduction by another 10% “only”.”

Of course, chopping kindling and using it for firewood – a return to the glory days of 19th century Bismarck Germany if only in terms of heating – will be an option for a very small number of German households; the sad truth is that should Europe suffer a cold winter, there will be tens of thousands of casualties if not more. But at least Germany will have taught Putin a lesson (what lesson that is, we are not quite sure).

The full report as always is available to pro subscribers.

Be seeing you

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

A Bank With 49 Trillion Dollars In Exposure To Derivatives Is Melting Down Right In Front Of Our Eyes

Posted by M. C. on July 22, 2019

No one learned anything from 10 years ago.

I would think the Fed would have had said something to prevent this.

http://theeconomiccollapseblog.com/archives/a-bank-with-49-trillion-dollars-in-exposure-to-derivatives-is-melting-down-right-in-front-of-our-eyes

Could it be possible that we are on the verge of the next “Lehman Brothers moment”?  Deutsche Bank is the most important bank in all of Europe, it has 49 trillion dollars in exposure to derivatives, and most of the largest “too big to fail banks” in the United States have very deep financial connections to the bank.  In other words, the global financial system simply cannot afford for Deutsche Bank to fail, and right now it is literally melting down right in front of our eyes.  For years I have been warning that this day would come, and even though it has been hit by scandal after scandal, somehow Deutsche Bank was able to survive until now.  But after what we have witnessed in recent days, many now believe that the end is near for Deutsche Bank.  On July 7th, they really shook up investors all over the globe when they laid off 18,000 employees and announced that they would be completely exiting their global equities trading business

It takes a lot to rattle Wall Street.

But Deutsche Bank managed to. The beleaguered German giant announced on July 7 that it is laying off 18,000 employees—roughly one-fifth of its global workforce—and pursuing a vast restructuring plan that most notably includes shutting down its global equities trading business.

Though Deutsche’s Bloody Sunday seemed to come out of the blue, it’s actually the culmination of a years-long—some would say decades-long—descent into unprofitability and scandal for the bank, which in the early 1990s set out to make itself into a universal banking powerhouse to rival the behemoths of Wall Street.

These moves may delay Deutsche Bank’s inexorable march into oblivion, but not by much.

And as Deutsche Bank collapses, it could take a whole lot of others down with it at the same time…

Be seeing you

Babs eats

Derivatives for dessert.

 

Posted in Uncategorized | Tagged: , , | Leave a Comment »