Admitting to collecting fees from a notorious sex criminal is somehow only the third-worst thing that has happened to Deutsche Bank in the last 24 hours.

Well, here's something you don't want to see if you're a global megabank teetering on the edge of collapse:

German lender Deutsche Bank reported a weaker-than-expected net loss of 3.15 billion euros ($3.51 billion) for the second quarter of 2019.

Analysts polled by research firm Refinitiv had estimated a net loss of 1.7 billion euros for the period, due to the bank’s massive restructuring program announced earlier this month. The German bank itself had previously said it expected to report a net loss of 2.8 billion euros for the quarter.

Missing on a net loss expectation of €1.7 billion is pretty bad. Missing by more than €1.4 billion? Well, that's Deutsche Bank. 

That said, Deutsche CEO Christian Sewing took pains to remind everyone that things can only get better:

“We have already taken significant steps to implement our strategy to transform Deutsche Bank,” Christian Sewing, the bank’s CEO said in a statement Wednesday.

“These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing.”

Sure, Deutsche would likely be profitable if it hadn't had to excise almost its entire US investment banking operation and continue to excise the demons that have possessed it for years and resulted in tens of billions of dollars of fines. 

But that's also not really true, is it? 

While every other bank has been feeding at the trough that is this absurdly long economic expansion, buoyed by a bizarre event that has allowed most of them to inflate their balance sheets through enormous share buybacks, Deutsche Bank has spent the same period getting absolutely curbstomped by its own legendarily terrible internal controls and the nightmares that came of them. This period of batshit growth is coming to an end one way or another, and Deutsche will be as exposed to what comes next as everyone else. And it might happen to Sewing & Co. even sooner considering that Deutsche seems to be refocusing on Europe, where the global recession has already commenced. 

We're seeing reports that Deutsche still wants to keep some revenue from equities trading despite laying off most of the people that trade equities for it, which seems like a solid plan, but also how? And it's openly admitting that it cannot withstand much more global trade uncertainty [Boris Johnson spent the morning promising a no deal Brexit outside his new digs at 10 Downing St.] and has been caught very wrongfooted on the global environment of interest rates [to which we say, "come on, you guys"].

We won't even get into the whole thing about Deutsche still being incapable of policing itself, evidence of which is the revelation that it was still executing admittedly troubling transactions for convicted sex offender Jeffrey Epstein up until a few months ago, but it does go to the heart of Deutsche's neverending quest to start the process of getting better.

It never really occurred to us that Deutsche might not survive this period of troubles, but that was when we thought the period had a notional endpoint. We are no longer laboring under the misconception that Deutsche Bank is close to solving its own problems because it is now plain that more problems lie around the next corner, and that Christian Sewing is taking those turns still weighed down by the intricate and cloying sins of his predecessors.

This was a startlingly terrible quarter, even for Deutsche Bank, and it has to augur the beginning of the end for Deutsche's old way of doing things or the beginning of the end of Deutsche Bank doing anything.

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