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Painful Cuts: Deutsche Bank Cuts Mark End To Failed Bid For Global Scale

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The radical and painful restructuring of Germany’s Deutsche Bank, which is cutting 18,000 jobs, is the end of a long, failed attempt to compete with the global investment banking giants that left it overextended. The bank plan unveiled Sunday aims to go “back to our roots” by refocusing on traditional strengths like serving corporate customers and wealthy individuals and cutting down on its stock-trading business and fixed-income investments. Investors gave a wary response on Monday, with shares in Germany’s biggest bank down 5% at 6.82 euros ($7.68) in Frankfurt after opening higher. CEO Christian Sewing said the job cuts have already begun and will last until 2022, though he wouldn’t give a geographical breakdown. Deutsche Bank had nearly 91,500 employees at the end of March, about 41,600 of them in Germany. Many of its investment banking activities are carried out in New York and London. “This is a rebuilding which, in a way, also takes us back to our roots,” Sewing said in a message to staff. Analysts say the overhaul is the bank’s long-needed reckoning with the failure of its expansion plan.
 

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Money laundering just not paying like it used to?

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If you ask me now, I'm not optimistic about DB future, but let's see how this unfolds in the coming months.

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DB drop:

 

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"The businesses Deutsche Bank is exiting or cutting back are predominantly based in New York and London so it seems very likely the axe will fall harder in the UK and US than in Germany."

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Readers should note that Deutsche Bank (Germany) set up a whole series of little sub-bank entities, and sub-sub-bank entities, to attempt to cash in on the big US boom in so-called "Mortgage-backed securities."  In doing that they purchased and re-structured the California operation "Bankers Trust of California," part of the NY operation "Bankers Trust," notoriously engaged in sub-prime and alt-A mortgage fraud and abuse.  They got canned numerous times by various State's Attorneys General, fined billions of dollars, at one point fined $5 billion dollars in one Federal Action, and the bad news never stopped coming.  In their US operation, at least, they got so caught up in the fraud frenzy that they lost whatever ethical bearings they might have once had, by hiring all those dubious characters in those shifty outfits that they bought up and re-incorporated as DB sub-entities. 

Deutsche Bank is referred to in the trade as Douche Bank, because their personnel and ethics are those of douches.  It is a slang well-deserved. Personally I think DB is going to fold or otherwise get re-structured, as no matter how many they fire, DB is not going to disinfect itself from the stench of its massive ethical frauds and misconducts.  Not a stock to buy, not a partner to have in financing, so stay away.

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