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That is a recipe for near-instant hyperinflation. Lehman Bros. wound up with nothing to be broken up and sold off... that was their problem. And there aren't any banks big enough to stop the interconnections from cascading.Credit Suisse is too big to fail (and cause systemic distress). Central banks won't let that happen (if they can help it). It may get broken up and sold off. Debts may get moved around the grand shell game table. But we aren't going to see a catastrophic collapse. The show must go on (until it can't).
You are spot on, IMO. This is volatile. It is also being kept out of the news (sorta like 2008, IIRC).I told my wife and kids that all will be known in October. They will try to contain a calamity until after the midterms, but I don't think the market can make it that long. It's getting dicey.
Saudis take 10% stake - $1.5B.
bingo. they would kill all of us to 'save' (their) criminal enterprises (they) call 'banks'Credit Suisse is too big to fail (and cause systemic distress). Central banks won't let that happen (if they can help it). It may get broken up and sold off. Debts may get moved around the grand shell game table. But we aren't going to see a catastrophic collapse. The show must go on (until it can't).
That $4 billion capital raise that was supposed to shore up confidence in global banking behemoth Credit Suisse turns out to have been too little, too late. Yesterday, 5-year Credit Default Swaps (CDS) on Credit Suisse blew out to 446 basis points. That’s up from 55 basis points in January and more than five times where CDS on its peer Swiss bank, UBS, are trading.
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Things don’t look any brighter this morning for Credit Suisse. Its shares are trading in Europe at 2.67 Swiss Francs or approximately $2.82 – an all-time low. Year-to-date, shares of Credit Suisse have lost 66 percent of their value as of yesterday’s close on the New York Stock Exchange.
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Credit Suisse is "definitely stable," Chairman Axel Lehmann told Swiss broadcaster SRF on Monday, adding that the embattled bank had seen a stabilisation in the outflows of client funds.
The bank has reported sharp outflows as wealthy clients move assets elsewhere, while the bank battles to recover from a string of scandals by focusing more on its flagship wealth management franchise and pruning back investment banking.
"Thankfully, the outflows have stabilised," Lehman told SRF in an interview to be broadcast on Monday.
Funds were also starting to return to the bank, he said, particularly in its Swiss home market.
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Reports that Saudi Crown Prince MbS is looking to invest $500 million in Credit Suisse along with other investors for a total $1B investment have stopped the stock slide.
Brave or stupid IDK . Catching a falling knife IMO.Reports that Saudi Crown Prince MbS is looking to invest $500 million in Credit Suisse along with other investors for a total $1B investment have stopped the stock slide.
What kind of an avalanche of Trillions can be stopped by a single Billion? 1/17000Throwing good money after bad. The derivatives book is $17 Trillion. Good luck with that. Actually no, I will enjoy watching it implode.
What kind of an avalanche of Trillions can be stopped by a single Billion? 1/17000
I think a good analogy would be a bug on the windshield. Din' stop the car.
Credit Suisse is the latest bank - out of many this year - coming out and considering a large cut to its bonus pool. The bank, which has been under intense criticism amidst ongoing questions about its liquidity, and has been spending its money suing its critics, is considering a 50% cut to its bonus pool, Bloomberg reported Wednesday morning.
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On Thursday, Credit Suisse shares tumbled as much as 12%, after the Swiss bank unexpectedly posted a bigger-than-expected loss for the fourth quarter and even more unprecedented client outflows, exacerbating the difficulty for new CEO Ulrich Koerner in returning to profitability by next year.
The second-largest Swiss bank (although it's probably far smaller now) posted a fifth-straight quarterly loss of 1.39 billion Swiss francs ($1.5 billion), worse than consensus estimates of a 1.14 billion loss as revenue of 3.06 billion Swiss francs also handily missed expectations of 3.35 billion. But while the operating loss was hardly a shock for a bank which has been in a constant state of chaos and turmoil, what stunned analysts was what KBW analysts called a “quite staggering” level of customer capital outflows which hit a record 110.5 billion francs in the quarter, and although the bank said that some money has been coming back, it also concedes it’s now at a worse starting point for 2023.
That was also the big reason why Credit Suisse gave an outlook for the first quarter and the full year that one analyst has labeled as “bleak.” The bank said it will post a “substantial” pretax loss in 2023; the fact that it knows this just one month into the year is very concerning, and as Bloomberg Intelligence analysts said, the scale of outflows and a plunge in investment-bank revenue “frame the difficulties ahead.”
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Credit Suisse continued its long death spiral yesterday, losing 15.64 percent of its market value in one trading session to close at $3.02 on the New York Stock Exchange. The trading action came on the heels of an earnings report that was excruciatingly bad – even for Credit Suisse.
The Global Systemically Important Bank (G-SIB), which means it’s interconnected to other G-SIBs that could bring down the global financial system, reported yesterday that its clients had yanked over $100 billion in just the fourth quarter — which was more than eight times the outflow in the third quarter. Its pre-tax loss for the quarter was $1.51 billion, marking its fifth consecutive earnings loss.
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Deutsche Bank... what others?
Fears are growing for Credit Suisse’s Irish business, the Sunday Times reported. The crisis-hit bank is preparing to shut its prime brokerage unit, the sole focus of its Dublin branch. The move will result in the loss of 50 jobs and comes amid a radical restructuring of the Zurich-based lender, the report said.
Credit Suisse reported its biggest loss since 2008 last week. The bank signalled in November 2021 that it intended closing its Irish prime brokerage desk, which serves hedge funds, but did not say when. The bank has also remained silent about the strategy for the Dublin branch, raising fears it does not intend to replace the prime brokerage business, which was set up in 2016 to much fanfare, the Sunday Times added.
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Citing sources, Reuters notes that the Swiss bank is offering a 6.5% annual rate on new three-month deposits of $5 million or above - and a rate as high as 7% for one-year deposits - far above matched maturity Bills, and suggesting that to attract a client, the bank is forced to eat a loss. ...
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Credit Suisse Group AG is one bank that caught our attention this morning. The shares of this troubled bank, trading in Switzerland, plunged as much as 15%, hitting a new record low. ...
The selling pressure on Credit Suisse shares returned thanks to the collapse of SVB, sparking a crisis of confidence throughout the banking industry in the Western world. As a result, the Zurich-based lender's five-year credit default swaps jumped to a record high of 448 basis points, data compiled by Bloomberg show.
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Credit Suisse Group AG published its annual report, slated for release last Thursday but was delayed by the US Securities and Exchange Commission over "material weaknesses" in its internal controls over financial reporting.
In the annual report on Tuesday, the embattled Swiss lender said, "management did not design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements."
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Despite initiating a campaign to regain clients, Credit Suisse reported that client deposit outflows continued this month. As a consequence of the outflows, the bank also admitted that it had utilized its liquidity buffers. It warned these circumstances have "exacerbated and may continue to exacerbate" liquidity risks.
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