Credit Suisse collapse rumours

[greggles]

Rumours that Credit Suisse is on the verge of collapse are doing the rounds of the mainstream media at the moment and the company is remaining tight lipped which is only giving more creedence to the rumours in the eyes of many observers. Credit Suisse saw a sharp rise in the spreads on its credit default swaps on Friday sparking speculation that the Swiss bank was in serious financial trouble.

It's predictable that the media is calling this Lehmann Brothers 2, but it does seem as though things are hanging by a thread at the moment and the collapse of a major European bank could be the spark that causes a plunge on global markets.

The Deutsche Bank share price is looking just as bad as Credit Suisse at the moment, and both are tanking worse than they did in 2009.



With the UK economy on a knife's edge, endless rate rises stifling economic growth and an ever-deepening war in Ukraine that continues to seem more and more like a quagmire every day, are the cracks finally starting to appear in the global economy?

 

[basilio]

Yeah...Those exit gates could be looking very crowded. I can understand why speculaters took every dollar off the table today. Tomorrow could well be too late.

 

[Dona Ferentes]

There was a write-up in AFR today showing how this all spiralled.

Whether it's true or not, we'll see

 

[Dona Ferentes]

[In the] memo on Friday night, [CEO of Credit Suisse Ulrich] Koerner assured staff that the bank had a “strong capital base and liquidity position” – in no small part due to those post-GFC rules (known as the Basel III regime) put in place to ensure banks could survive the sort of shocks we saw in 2008.

Unfortunately, in a moment of breathtaking stupidity, Koerner’s memo also said that Credit Suisse was facing a “critical moment”.

and then on Saturday night, local ABC journalist David Taylor tweeted: “Credible source tells me a major international investment bank is on the brink.” ... and while that was a private tweet, it amplified as


no link to ABC as it was not an article, just the twitterverse behaving as it does (and on weekend).

Credit Suisse has told creditors, clients and regulators in recent days that its key capital ratio is 13.5 per cent, which is pretty strong

Credit Suisse rumour mill a sign of dangerous times

Speculation that Credit Suisse is “on the brink” has got completely out of control, as shown by the way a tweet from an ABC reporter took on a life of its own.

www.afr.com

 

[divs4ever]

Credit Suisse wasn't my first thought when i heard about the Fed. emergency ( closed door ) meeting , but it was in the mix that i did wonder about

sadly , the two named are not the only trouble spot ( nor is Europe the only likely epicenter )

regardless who the troubled bank is .. be prepared for contagion

however maybe i will lower my top-up order on extra BOQ ( i really would prefer MYS but not at the current price )

 

[waterbottle]

If a bank is in trouble and we're heading to another GFC then nothing is safe ?

 

[martaart077]

Along the lines of banks and financial troubles, I was thinking of my cash deposit held in my self wealth trading account. I am of the understanding that the money is actually held by self wealth in their trading name and self wealth has created a sub account in my name.
If the proverbial hit the fan, I'm thinking what is mine may end up not being mine.
Shares bought through self wealth are chess holdings in my name but the cash may not be.

 

[basilio]

It is scary.

Simple fact is that the gyrations on the global financial markets last week after Truss's insane mini budget must have resulted in some massive financial plays. It would be no surprise to discover some institutions are under severe stress - if not xucked. This doesn't even touch the multitude of financial pressures from wars, economic hardship, storms and other natural disasters and heightened debt levels across many countries and institutions.

Putting a name to a big bank as potentially insolvent is just opening the box. If fear and contagion spread we will see a 2008 repeat. But this time we have a disastrous hot war with Russia to deal with and a financial system that is already stressed with Covid and years of extra borrowings from the previous GFC.

 

[Smurf1976]

Simple fact is that the gyrations on the global financial markets last week after Truss's insane mini budget must have resulted in some massive financial plays. It would be no surprise to discover some institutions are under severe stress - if not xucked.

The Fed and other central banks keep raising rates until something breaks. Happens practically every cycle.

I think we've now seen the first meaningful breakage which represents the tipping point. Regardless of CS, there's clearly a lot of stress out there right now.

 

[wayneL]

All an inevitable occurance. They learnt nothing from GFC and as I and others said at the time, they simply delayed the inevitable and a bigger problem.

Buckle up, boyos.

 

[waterbottle]

All an inevitable occurance. They learnt nothing from GFC and as I and others said at the time, they simply delayed the inevitable and a bigger problem.

Buckle up, boyos.

They'll probably keep can-kicking. UN weighing in begging for a Fed pivot

U.N. agency warns of recession linked to 'imprudent' monetary policy

GENEVA (Reuters) -A United Nations agency warned on Monday of the risk of a monetary policy-induced global recession that would have especially serious consequences for developing countries and called for a new strategy. "Excessive monetary tightening could usher in a period of stagnation and...

finance.yahoo.com

 

[qldfrog]

They'll probably keep can-kicking. UN weighing in begging for a Fed pivot

U.N. agency warns of recession linked to 'imprudent' monetary policy

GENEVA (Reuters) -A United Nations agency warned on Monday of the risk of a monetary policy-induced global recession that would have especially serious consequences for developing countries and called for a new strategy. "Excessive monetary tightening could usher in a period of stagnation and...

finance.yahoo.com

Tbe UN....of all...

 

[The Triangle]

Wasn't it this time last year the media were all saying the same thing about Evergrande? It was going to cause GFC 2.0 and the market was going to collapse and this is the end?

Turned out it was a storm in a teacup. A few down days in the market and all was forgotten.

 

[waterbottle]

Wasn't it this time last year the media were all saying the same thing about Evergrande? It was going to cause GFC 2.0 and the market was going to collapse and this is the end?

Turned out it was a storm in a teacup. A few down days in the market and all was forgotten.

Not really, Chinese real state has continued to deteriorate since then (mortgage holders refusing to pay). It just I didn't end up as the GFC 2.0

 

[The Triangle]

Not really, Chinese real state has continued to deteriorate since then (mortgage holders refusing to pay). It just I didn't end up as the GFC 2.0

Exactly.

 

[divs4ever]

Wasn't it this time last year the media were all saying the same thing about Evergrande? It was going to cause GFC 2.0 and the market was going to collapse and this is the end?

Turned out it was a storm in a teacup. A few down days in the market and all was forgotten.

probably a major papering-over job as it would depend on WHO was exposed to Evergrande debt ( if it was US banks and hedge-funds , suddenly a Chinese implosion doesn't look so joyous , ditto for EU high-risk investors )

 

[InsvestoBoy]

All an inevitable occurance. They learnt nothing from GFC and as I and others said at the time, they simply delayed the inevitable and a bigger problem.

Buckle up, boyos.

I will take the under.

Banking and investment banking is very different now from the GFC, many lessons in fact have been learned.

I think forward returns on ex-AU investment banks (where valuations are already rich) will be above benchmark and they have strong tailwinds with both rising rates and volatile rates.

I think investment banks are oversold on GFC fears from people who don't understand anything and could offer strong upside surprise.

I do not believe either CS or DB will fail.

 

[waterbottle]

I will take the under.

Banking and investment banking is very different now from the GFC, many lessons in fact have been learned.

I think forward returns on ex-AU investment banks (where valuations are already rich) will be above benchmark and they have strong tailwinds with both rising rates and volatile rates.

I think investment banks are oversold on GFC fears from people who don't understand anything and could offer strong upside surprise.

I do not believe either CS or DB will fail.

As in, they won't fail due to the factors causing a GFC or do you mean they won't ever fail?

 

[InsvestoBoy]

As in, they won't fail due to the factors causing a GFC or do you mean they won't ever fail?

Obviously I am not saying they won't ever fail.

I am not really sure what "they won't fail due to the factors causing a GFC" means, it's not a coherent statement.

 

[waterbottle]

Obviously I am not saying they won't ever fail.

I am not really sure what "they won't fail due to the factors causing a GFC" means, it's not a coherent statement.

That's OK, I've got my answer thank you