"The earlier filing of fraud charges against Wall Street banking titan Goldman Sachs by the US Government Securities and Exchange Commission (SEC) was only the tip of a huge fraud iceberg. Now a US mortgage insurer has charged one of the most aggressive banks involved in the US subprime mortgage scam of fraud. The bank is none other than Deutsche Bank. This case is also likely to be just the “tip of a very big iceberg.”
According to Bloomberg financial writer and author, Michael Lewis, under Ackermann’s leadership at Deutsche Bank, the bank, through its New York offices, set out to outdo Goldman Sachs in the home mortgage securitization bonanza of the past decade. Lewis documents the fact that Deutsche Bank in New York was selling what it knew were toxic waste or junk mortgage bonds on US subprime mortgages to “stupid German investors in Duesseldorf” as one Deutsche Bank New York bond trader told Lewis.
The “stupid German investors in Duesseldorf” it turns out, were IKB, the daughter of the German state Kreditanstalt für Wiederaufbau. The interesting point is that Ackermann’s DB sold what were allegedly fraudulently-constructed “AAA” CDO’s or Collateralized Debt Obligations, some of the highest risk fraudulent derivatives from Wall Street mortgages to IKB at a time Deutsche Bank knew or should have known that the US mortgage default crisis was beginning to explode. In effect it appears that the DB dumped its toxic waste onto IKB. At the same time Deutsche Bank was selling exotic US real estate collateralized debt obligations too the “stupid German investors” at IKB, it was aggressively organizing other Wall Street banks and hedge fund managers to bet on the crash of that same mortgage bubble. No one at Deutsche Bank headquarters in Frankfurt seemed to mind so long as the profits rolled in from all parties.
To add injury to insult, or even more injury to injury, Deutsche Bank’s Ackermann personally sent a notice to the head of the German bank regulator, BaFin-Chef Jochen Sanio, on July 27, 2007, kindly alerting the German regulators that IKB held a pile of toxic bonds and that the bank could be in trouble. Ackermann even went public to the press and admitted he knew because Deutsche Bank had sold the toxic financial securities to IKB.
That announcement by Ackermann is credited with bringing IKB to the brink of bankruptcy and necessitating a state taxpayer rescue of billions. What the charitable Herr Ackermann did not divulge is how much profit his bank might have made in the collapse of IKB. The collapse of IKB, as I detail in my Der Untergang des Dollar Imperiums, was the catalyst to explode the multi-trillion Euro US financial bubble worldwide, a bubble which today is far from deflated..."
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