Christian Sewing has finally found a situation in which he holds some cards.

Last Friday, we saw a little news drop and have spent the last week wondering how it didn't make more of a splash:

Deutsche Bank AG has decided that none of the more than $4 billion it promised to spend on consumer relief after the global mortgage crisis will go to distressed U.S. homeowners, according to a report by the monitor of the 2017 settlement.

Instead, the consumer-relief money will be spent on originating new loans, according to the Feb. 13 report by the bank’s monitor, Michael Bresnick.

Deutsche Bank is essentially telling the Justice Department "Remember that $4 billion we were gonna pay out to make up for all the shit we pulled during the mortgage crisis? Yeah, well, we're not...Doing that."

It's understandable that Deutsche wouldn't want to pay all that money to settle yet another ancient screwup, but it's beyond our imagination to conceive that this report has been met with the news cycle's equivalent of a lazy shoulder shrug.

The decision reverses pronouncements by the bank and the U.S. Justice Department that some of the funds -- part of an overall $7.2 billion settlement over bad mortgage bonds sold before the 2008 crisis -- would go to aiding people who were in imminent risk of defaulting on their mortgage payments, have especially high interest rates or owe more on their mortgage than in the value of their home.

The change in plans “may disappoint distressed homeowners and others, including the many individuals who have reached out to the monitor over the past two years, hoping to receive different types of consumer relief from the bank,” Bresnick wrote in the report, which was posted online.

It's also pretty hard to fathom Deutsche trying this under a Justice Department run by Eric Holder with Jack Lew over at Treasury. Based on evidence and reason, those two would have had a political field day publicly destroying what was left of Deutsche's reputation in the US while quietly figuring out a way to make everyone walk away whole. But with the Justice Department smack dab in the middle of the Matt Whitaker-Bill Burr transition and Old Stevie Mnooks over at Treasury, Deutsche is taking its shot.

And we can't help but applaud the move.

Seriously. 

It's been said that we can be a bit hard on Deutsche Bank, and we can sort of understand that opinion, but we love what we're seeing here from our frenemies in Frankfurt.

Deutsche Bank is in the late stages of a fatal series of crises that have essentially leveled the bank. In fact, a major reason why this story is being ignored might be that Deutsche has had two other news items hit in the last few days. One of those being the fact that while it was screwing up all those mortgages, the bank also managed to lose $1.6 billion on a muni bond trade. The other being that people inside the bank panicked immediately after Trump won the election, realizing that a few years in the White House would provide The Donald with the perfect context to never pay back the $340 million in loans he has with Deutsche, his biggest lender.

The timing of these stories and Deutsche's decision to be like "Nah, bro" on a $4 billion agreement with the Justice Department is not - in our opinion - coincidental. Deutsche knew that the bond story was coming down the pike, and that it would still drop jaws even after everyone has grown numb to the volume and size of Deutsche's fuckups over the last decade. Meanwhile, the bank's now-infamous association with Trump has grown into something of a cottage industry for conspiracy types...and the House Financial Services Committee.

In something of a "Chicken or the Egg?" scenario, it's become difficult to truly figure out if Deutsche Bank's notoriously poor controls led to its Trump problem or if Deutsche Bank's notoriously poor controls led to Trump's Deutsche Bank problem.

Whichever it might be, the problem is real and it's becoming more apparent. The Democratic-controlled House is ramping up an investigation into Trump's Deutsch debts and who actually holds the paper. Financial Services Committee Chair Maxine Waters has even reportedly brought on Wall Street's worst nightmare Bob Roach to investigate the connections, a development that cannot delight anyone in Frankfurt or Trump Tower.

Investigations take time, but leaked documents can be read and disseminated pretty quickly, and if there are documents that are potentially dangerous to this administration, they're with Deutsche Bank. 

And here we arrive at why we're impressed with the aforementioned balls out baller move by Deutsche CEO Christian Sewing.

Sewing has experienced a decade of pain since taking over Deutsche less than a year ago. He's been the sin eater for everyone that's come before him and he's publicly come to to the conclusion that every dollar inside Deutsche Bank is - at this point - sacred. He does not want to [and might not be able to] pay out another $4 billion to the US government, and with Trump loyalists like Whitaker and Mnuchin being the counterparty here, he's gambling that he doesn't have to.

Everyone that's come into Trump's orbit since he kicked off his campaign has been touched by the swirling chaos that whirls around this president. If - for instance -Sewing is sitting on proof that Trump's [or Jared Kushner's] debt was sold to Russia via the bank's clusterfuck of mirror trades that saw about $10 billion move with questionable legality from Deutsche through a variety of questionably legal places, why would he not sit back and put his $4 billion check in a drawer? If you're a Trump loyalist at Justice or Treasury, are you really going to ask Christian Sewing to open a drawer right now? And if you're Christian Sewing, you can easily open it. After all, who knows what come out of it? And all that schieße went down before you got the gig.

There's also the matter of Trump leaning on the Justice Department to kill the investigation into his businesses going down in New York's Southern District. According to The NY Times, Trump has been using Rudy Giuliani and Whitaker like blunt instruments on the SDNY, attempting to bully and screw with the Feds who are using Michael Cohen and a lot of other bad stuff to make Trump and his family very very nervous. That would seem like a subplot to Trump's Deutsche worries, except the Federal Prosecutor in charge of the investigation, a guy named Robert Khuzami, has had other jobs in his life. And one of those jobs was, you guessed it, General Counsel at Deutsche Bank US.

Basically, we see the makings of a German-style Mexican standoff here. Deutsche Bank is on the precipice of collapse and desperate to staunch the bleeding. Are Trump and his team $4 billion worth of certain that their political death isn't sitting on a server in Frankfurt? And would Deutsche pull the trigger on mutually-assured destruction if Sewing feels like he has no other option?

We somehow doubt that anyone involved here is really interested in finding out.

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