Stock enthusiasts would be wise to keep a close watch on what is happening at Deutsche Bank, which shook up its business and said it planned to lay off thousands of traders and other workers.

One of Deutsche Bank’s main problems has been the derivatives it holds. Derivatives are just what the word implies — they are securities derived from other securities, and they are very complicated.

But the important fact to remember is that Deutsche Bank traded these derivatives with other financial firms. So, is this going to be another Lehman Brothers situation whereby one bank’s problems becomes other banks’ problems?

Pay close attention to this.

If the situation gets out of hand, the Federal Reserve and other central banks will have no choice but to cut interest rates even if it’s not the best thing for the world economies.