Deutsche Bank collapsing

Shares in Germany's biggest bank haven't been this cheap for more than 20 years.
Deutsche Bank stock slumped as much as 6.5% on Monday. The trigger appeared to be reports over the weekend that the German government has ruled out state assistance for the troubled bank.
Monday's losses pile on the pain for investors, who have seen the bank's market value collapse by 52% this year.
Deutsche Bank (DB) has been hit by a series of body blows that have weakened its finances.
It spent billions settling charges that it conspired to manipulate global interest rates and colluded with other banks to rig foreign exchange rates; its margins have disappeared due to record low interest rates and the cost of new regulations; and it has just been slammed with a $14 billion demand from the U.S. Justice Department over its role in the global financial crisis.

The L Word

Despite German Chancellor Angela Merkel reportedly stating otherwise, "it's not necessarily a Lehman moment," said Boockvar, "because we have to assume that the German government in some way will bail them out."

If Deutsche Bank goes down

And yet it has become increasingly hard to ignore the slow-motion car crash that is Deutsche Bank, or to avoid the conclusion that something very nasty is developing at what was once seen as Europe’s strongest financial institution. Its shares have been in free-fall for a year, touching a new low of 10.7 euros on Monday, down from 27 euros a year ago. Over the weekend, the German Chancellor Angela Merkel waded into the mess, briefing that there could be no government bail-out of the bank.
But hold on. Surely that is an extra-ordinary decision? If the German government does not stand behind the bank, then inevitably all its counter-parties – the other banks and institutions it deals with – are going to start feeling very nervous about trading with it. As we know from 2008, once confidence starts to evaporate, a bank is in big, big trouble. In fact, if Deutsche does go down, it is looking increasingly likely that it will take Merkel with it – and quite possibly the euro as well.

Asia doesn't want our Treasuries anymore

Overseas creditors have played a key role in financing America’s debt as the U.S. borrowed heavily in the aftermath of the financial crisis to revive the economy. Since 2008, foreigners have more than doubled their investments in Treasuries and now own about $6.25 trillion.
Central banks have led the way. China, the biggest foreign holder of Treasuries, funneled hundreds of billions of dollars back into the U.S. as its export-based economy boomed.
Now, that’s all starting to change. The amount of U.S. government debt held in custody at the Fed has decreased by $78 billion this quarter, following a decline of almost $100 billion over the first six months of the year. The drop is the biggest on a year-to-date basis since at least 2002 and quadruple the amount of any full year on record, Fed data show.
Big holders of Treasuries are selling for a variety of reasons, but they’re all tied to each country’s economic woes. In China, the central bank has been selling U.S. government debt to defend the yuan as slumping growth leads to more capital outflows. Japan, the second-biggest foreign holder, has swapped Treasuries for cash and T-bills as prolonged negative rates in the Asian nation pushed up dollar demand at local banks.

Losing in Afghanistan

By a variety of indicators, ISAF and the Afghan government it supports are losing the war. According to data recently released by the Pentagon to one of the authors, violence in Afghanistan following Obama’s 2009 troop surge has remained at levels vastly exceeding those observed during the initial years of the war. Meanwhile, measures of insurgent activity, from kidnappings to weapons sales, have remained at levels at or above those observed when the United States “surged” troops into the country. Perhaps most alarmingly, since 2010, when ISAF began tracking combat outcomes on a consistent basis, the number of insurgent attacks resulting in the deaths of Afghan police officers and soldiers have continued to steadily climb.
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First, it is unlikely that the Taliban’s spread in Afghanistan can be thwarted. Despite the United States’ current and continued presence in Afghanistan, the Taliban is challenging the Afghan government’s control of entire provinces, including Kandahar and Uruzgan. Meanwhile, the Special Inspector General for Afghanistan’s Reconstruction recently reported that, since January of this year, the Afghan government has lost control of an additional five percent of its districts. It now controls only 65.6 percent of them. Another source estimates that a full one-fifth of Afghan territory is “controlled or contested” by the Taliban.

IS returns to Afghanistan

Officials and witnesses in Afghanistan say fighters linked to Islamic State have regained control of most of the militant group's former strongholds in the country, weeks after retreating to remote mountain hideouts in the face of major Afghan security operations.
The troubled areas are located in Achin, Naziyan, Kot and Haska Meena districts of the eastern Nangarhar province, which borders Pakistan.

al-Qaeda returns to Afghanistan

The military is now hunting al-Qaida leaders in seven different provinces, indicating a high level of growth since the U.S. invasion in 2001, Commander of all U.S. forces in Afghanistan Army Gen. John Nicholson admitted to reporters yesterday.
Al-Qaida operations have increased throughout Afghanistan since the end of U.S. combat missions in 2014. The U.S. assisted an Afghan-led operation in 2015 that destroyed the largest al-Qaida training camp seen in the history of the Afghan war. U.S.-backed Afghan forces raided another al-Qaida training base Sept. 19. The base was well stocked with weapons, suicide vests, and fake identification.

U.S. taxpayer funded corruption in Afghanistan

Out of 168 nations ranked, Afghanistan clocks in just two shy of last place at 166. Six in 10 Afghans reported having to pay bribes to facilitate government transactions, and as many agreed their country became more corrupt from 2007 to 2010—a bad situation made worse.
Now it turns out this isn’t just the expected corruption of an impoverished, undeveloped, war-torn nation. It’s corruption on steroids, and the United States government is supplying the juice.
“Our report points out that while corruption in Afghanistan pre-dates 2001, it has become far more serious and widespread since then,” SIGAR head John Sopko summarized in a recent speech, adding, “The result [of U.S. nation-building attempts] for Afghanistan was systemic corruption—pervasive and entrenched, affecting the courts, the army and police, banking, and other critical sectors.”
In fact, corruption has become such a pervasive part of Afghan life since 2001 that cultural attitudes about paying bribes have dramatically shifted in just a decade and a half. Where once bribery was shameful, now it is met with tacit acceptance as a necessary evil.