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Credit Suisse collapse rumours

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www.marketwatch.com

Citi analyst doesn't see cause for concern for U.S. banks despite Credit Suisse woes

Citi analyst Keith Horowitz said late Sunday the bank doesn't see cause for concern about financial contagion of U.S. banks from Credit Suisse...
www.marketwatch.com www.marketwatch.com

Citi analyst Keith Horowitz said late Sunday the bank doesn't see cause for concern about financial contagion of U.S. banks from Credit Suisse , amid social media speculation about the health of the major Swiss lender. "We understand the nature of the concerns, but the current situation is night and day from 2007 as the balance sheets are fundamentally different in terms of capital and liquidity, and we struggle to see something systemic," Horowitz said. He noted that credit default swap spreads of U.S. banks have widened over the last few weeks, but that U.S. bank stocks "are very attractive here."
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(emphasis mine) ...it's not just Mr Horowitz saying this. Most people who understand banking, investment banking and how the monetary system actually works are saying similar things.

In fact, it is the massive change in balance sheets and risk aversion by investment banks that fundamentally changed the entire nature of the monetary system post GFC.
 
InsvestoBoy said:
www.marketwatch.com

Citi analyst doesn't see cause for concern for U.S. banks despite Credit Suisse woes

Citi analyst Keith Horowitz said late Sunday the bank doesn't see cause for concern about financial contagion of U.S. banks from Credit Suisse...
www.marketwatch.com www.marketwatch.com



(emphasis mine) ...it's not just Mr Horowitz saying this. Most people who understand banking, investment banking and how the monetary system actually works are saying similar things.

In fact, it is the massive change in balance sheets and risk aversion by investment banks that fundamentally changed the entire nature of the monetary system post GFC.
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I can't speak for investment banking, I'm just a punter.

But there's a bit of a conflict with an investment banker saying investment banks are safe. Particularly when the BoE stepped in to save pension funds - they wouldn't have been the only institution being strained.
 
waterbottle said:
I can't speak for investment banking, I'm just a punter.

But there's a bit of a conflict with an investment banker saying investment banks are safe. Particularly when the BoE stepped in to save pension funds - they wouldn't have been the only institution being strained.
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This is exactly what I'm saying about people who don't understand anything.

You do not have to take his word for it, if you understand how banking works, you can figure out for yourself if what he said is right or wrong. Since you don't understand, you take internet hysteria at its word and look past the substance of an experienced banking analysts statement for the surface of "investment banker says investment banks are safe" (he didn't).

As I already said, he is not the only person saying this.

FWIW, BoE didn't step in to save pension funds, I will leave it to you to dig in a bit more and try to understand what they did, who they did it for, why.
 
InsvestoBoy said:
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.
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i do not believe CS or DB will be allowed to fall ( if they get into difficulty alone or in tandem ) HOWEVER what if there is a cascade starting elsewhere that swamps both banks ,

as i read the GFC autopsy , the US wasn't worried until AIG got in big trouble ( instantly most of those derivatives were no longer underwritten/insured , and the banks were trading naked )
 
InsvestoBoy said:
This is exactly what I'm saying about people who don't understand anything.

You do not have to take his word for it, if you understand how banking works, you can figure out for yourself if what he said is right or wrong. Since you don't understand, you take internet hysteria at its word and look past the substance of an experienced banking analysts statement for the surface of "investment banker says investment banks are safe" (he didn't).

As I already said, he is not the only person saying this.

FWIW, BoE didn't step in to save pension funds, I will leave it to you to dig in a bit more and try to understand what they did, who they did it for, why.
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You are right, I don't understand. Is he saying they're safe (I. E. Won't fail) or that they're not (will fail)? Or maybe he doesn't know? ?
 
- Large losses from Greensill and Archegos 'investments'/ scandals
- Has had a revolving door of management (new CFO started Monday)
- Shares fell 8 per cent when markets opened on Monday. Spreads on credit default swaps moved higher.
- Likely 4billion Euro rights issue at discounted price (haircut for current shareholders)

But
  • greater loss absorption capacity. ... some SFr52.7 billion ($81.6 billion) of core and additional tier one capital or 19.2 per cent of risk-weighted assets.
  • The leverage ratio is 6.1 per cent or about half what it was in 2008.
  • Liquidity reserves of SFr235 billion comprise central bank assets, Swiss government bonds and US Treasuries.
 
Dona Ferentes said:
- Large losses from Greensill and Archegos 'investments'/ scandals
- Has had a revolving door of management (new CFO started Monday)
- Shares fell 8 per cent when markets opened on Monday. Spreads on credit default swaps moved higher.
- Likely 4billion Euro rights issue at discounted price (haircut for current shareholders)

But
  • greater loss absorption capacity. ... some SFr52.7 billion ($81.6 billion) of core and additional tier one capital or 19.2 per cent of risk-weighted assets.
  • The leverage ratio is 6.1 per cent or about half what it was in 2008.
  • Liquidity reserves of SFr235 billion comprise central bank assets, Swiss government bonds and US Treasuries.
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BUT it is all about confidence , that confidence might evaporate because of bank activities OR events happening outside the bank

so the question is , are investors ( and depositors ) already concerned ??
 
basilio said:
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.:2twocents
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I was not being specific enough in my original post.
The entire banking system is based on confidence and trust. There is not a single bank no matter how theoretically well run or "safe" that could survive a loss of depositor confidence and a run on the bank.

My observation was two fold. Firstly the fact that the overall financial systems are under severe stress for all the obvious reasons. Secondly the scare raised around Credit Suisse does focus attention on the overall security of the banks.

Back in 2008 Australia was only hours away from a run on the banks before the Government formally announced it would guarantee deposits up to $250k .

For a bit of history about how the GFC was impacting on banks across the world check out this story from that time.

www.theguardian.com

Financial crisis: what the world's central banks and governments have done

A round-up of banking guarantees and monetary policy changes across the globe
www.theguardian.com www.theguardian.com
 
basilio said:
I was not being specific enough in my original post.
The entire banking system is based on confidence and trust. There is not a single bank no matter how theoretically well run or "safe" that could survive a loss of depositor confidence and a run on the bank.

My observation was two fold. Firstly the fact that the overall financial systems are under severe stress for all the obvious reasons. Secondly the scare raised around Credit Suisse does focus attention on the overall security of the banks.

Back in 2008 Australia was only hours away from a run on the banks before the Government formally announced it would guarantee deposits up to $250k .

For a bit of history about how the GFC was impacting on banks across the world check out this story from that time.

www.theguardian.com

Financial crisis: what the world's central banks and governments have done

A round-up of banking guarantees and monetary policy changes across the globe
www.theguardian.com www.theguardian.com
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yes despite my dislike for K. Rudd and his crew , he did make some correct decisions ( even if some of the schemes were badly implemented )
 
basilio said:
I was not being specific enough in my original post.
The entire banking system is based on confidence and trust. There is not a single bank no matter how theoretically well run or "safe" that could survive a loss of depositor confidence and a run on the bank.
Click to expand...

I would encourage people who actually care to consult the recent 2Q22 release from CS, page 40, `Liquidity and funding management` and have a read https://www.credit-suisse.com/media...closures/results/csg-financialreport-2q22.pdf
 
InsvestoBoy said:
I would encourage people who actually care to consult the recent 2Q22 release from CS, page 40, `Liquidity and funding management` and have a read https://www.credit-suisse.com/media...closures/results/csg-financialreport-2q22.pdf
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about CS , not really ( in a compassionate way )

i remember their interaction with Linc Energy , now i came out of that smelling of roses , but i still have empathy for my fellow retail shareholders , who were lured onto the SGX before the axe fell ( i couldn't find a cost-efficient way to migrate to the SGX so dumped the holding and parked the cash into a better stock )

now the contagion if CS or DB ( or say a major Japanese bank ) failed that is liable to inflict some pain on me as the ripples spread through an over-leveraged financial system ,

so my question ( to myself ) is , IF there is a bank run , can i find a silver lining to exploit
 
divs4ever said:
about CS , not really ( in a compassionate way )

i remember their interaction with Linc Energy , now i came out of that smelling of roses , but i still have empathy for my fellow retail shareholders , who were lured onto the SGX before the axe fell ( i couldn't find a cost-efficient way to migrate to the SGX so dumped the holding and parked the cash into a better stock )

now the contagion if CS or DB ( or say a major Japanese bank ) failed that is liable to inflict some pain on me as the ripples spread through an over-leveraged financial system ,

so my question ( to myself ) is , IF there is a bank run , can i find a silver lining to exploit
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Just buy some silver(and gold) mate :D I have some physical as well as stocks for that silver lining in case everything goes under.
 
bluekelah said:
Just buy some silver(and gold) mate :D I have some physical as well as stocks for that silver lining in case everything goes under.
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am forward buying ( hoarding to some ) staple goods , and other stuff to barter in harsher times , now maybe your silver is safe ( hidden under the floorboards at HOME ) but when the 'emergency ' hits the government will expect you to surrender your gold to the safe hands of the government , one way or another
 
divs4ever said:
am forward buying ( hoarding to some ) staple goods , and other stuff to barter in harsher times , now maybe your silver is safe ( hidden under the floorboards at HOME ) but when the 'emergency ' hits the government will expect you to surrender your gold to the safe hands of the government , one way or another
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thats why we stackers often go on fishing trips and accidentally loose our gold overboard. OOPS... ;)

By the way, our gov can only implement a bullion tax, currently theres capital gains tax but no GST on gold. Gone are the days where sovereigns and florins were currency. Theres not much gold/silver being stacked anyways compared to credit card debt or mortagage debt lol and savings are all in digital AUD form in the banks, so RBA wont turn to gold to shore up the currency. Well if they needed to they do have supposedly 80tonnes stored in the UK lol... Should probably take that back to the perth mint or to canberra at some stage.

Anyways cant make citizens do anything nowadays, just look at covid there were so many protests etc.. When SHTF financially RBA will just do more printing and devalue the AUD. Much like what BOJ did after the 1990s crash japan had. Thats when the precious metals will retain their purchasing power.
 
i tend to avoid debt ( even buying somebody else's , in the last four years ) , reckon a kilo of salt ( or rice ) will still be worth something ( unlike a kilo of banknotes ) , those coins might be still worth something , some are fairly old

good luck on it being safe in London ( or even in Switzerland ) ask Venezuela on that subject
 
divs4ever said:
?i tend to avoid debt ( even buying somebody else's , in the last four years ) , reckon a kilo of salt ( or rice ) will still be worth something ( unlike a kilo of banknotes ) , those coins might be still worth something , some are fairly old

good luck on it being safe in London ( or even in Switzerland ) ask Venezuela on that subject
Click to expand...

bluekelah said:
Just buy some silver(and gold) mate :D I have some physical as well as stocks for that silver lining in case everything goes under.
Click to expand...

I'll invest in guns and ammo. Where do all y'all live again
 

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