Australian (ASX) Stock Market Forum

Credit Suisse collapse rumours

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moXJO said:
I'll invest in guns and ammo. Where do all y'all live again
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better buy armor as well , am real close to Springwood and Slacks Creek ( was gang territory not so long back ) not sure who took over after Newman tamed the bikies ,
 
tech/a said:
Bombs, Drones, and heat sensors tend to make grouping in numbers unwise. Really with what we can get a hold of---- I have a great stash of Rocks to throw.
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I think they follow the Afrikaner method. Good communication networks with trained mobile squads.
 
For those that like to look at what the market is doing rather than what they think it should do, the problems at Credit Suisse have been apparent for some time.
The share price has declined by 58% this calendar year, and by 73% over the past 5 years, and down by 95% from its all time high in 2007.
UBS, the other major Swiss banks, has declined by 8% this calendar year, and by 8.5% over the past 5 years, and around 30% down from its 2007 all time high.
The reliance on soothing support from the analysts at the likes of City, JPM, or BOA need to be taken with a grain of salt, as Wall Street On Parade points out
Various analysts on Wall Street were issuing votes of confidence on the bank yesterday. Unfortunately, one can’t rely on the analysts at other global banks on Wall Street to tell the truth about how bad the situation is at Credit Suisse. The derivative desks of these same banks are highly likely derivative counterparties to Credit Suisse and could lose billions of dollars if it defaults and catch the contagion it leaves in its wake. In fact, many of these banks are likely demanding more cash collateral from Credit Suisse on those derivative trades as we type these words.
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Good luck to anyone who belives anything coming out of the mouth of one of the big banks.
Mick
 
once again CS wasn't the first name to spring to mind when a troubled bank rumors started spreading , there are several banks operating way out on the risk curve ( but i can't see the US Fed rushing to take 'extraordinary measures ' to bail an Australian bank , it is more likely a Northern Hemisphere one )
 
divs4ever said:
once again CS wasn't the first name to spring to mind when a troubled bank rumors started spreading , there are several banks operating way out on the risk curve ( but i can't see the US Fed rushing to take 'extraordinary measures ' to bail an Australian bank , it is more likely a Northern Hemisphere one )
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FED cant to anything if the bank is not locally registered and FDIC insured.

There is a huge "shadow banking type" system trading in "Eurodollars" all over the world which will start to collapse as rates go up. CS is probably just on of the many Euro banks that will go down.

IMO it seems US is intent on bringing down Europe this cycle. With the recent suspicious nordstream pipeline bombings etc.. Perhaps they will try to crash Europe to have more control over NATO countries.
 
divs4ever said:
i would have thought healthy , vibrant economies make better allies , but then i am a contrarian
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USA is all about causing conflict so that they can sell arms and exert control globally. Also excuse to move their troops in to secure critical resources for their country..

Remember the Iraqi conflict? Previously the sector was national with help from French oil company Total. After the invasion, troops were stationed at oil fields in Iraq. and american companies like ExxonMobil / Chevron / BP / Shell took over
edition.cnn.com

Why the war in Iraq was fought for Big Oil | CNN

Yes, the Iraq War was a war for oil, and it was a war with winners: Big Oil.
edition.cnn.com edition.cnn.com

I am not sure what resources Europe has, maybe lots of gold in Switzerland? (theres lotsa wheat in Ukraine for sure) But I am sure Europeans are buying lotsa american military hardware at the moment, USA arms companies must be making money hand over fist, especially with the ukraine conflict ramping up. The free weapons to Ukraine are probably new stuff they can actually test in the field or use as demos for arm sales, as well as to prolong the conflict so they can continue to sell more arms.
 
those weapons are not 'free' they come at a cost in human lives , now , and obligations to come later

let's see how much grain Ukraine will Ukraine harvest in the coming season considering how many men under 60 have been conscripted to the fighting ( let's see if they start conscripting women as well )
 
bluekelah said:
USA is all about causing conflict so that they can sell arms and exert control globally. Also excuse to move their troops in to secure critical resources for their country..

Remember the Iraqi conflict? Previously the sector was national with help from French oil company Total. After the invasion, troops were stationed at oil fields in Iraq. and american companies like ExxonMobil / Chevron / BP / Shell took over
edition.cnn.com

Why the war in Iraq was fought for Big Oil | CNN

Yes, the Iraq War was a war for oil, and it was a war with winners: Big Oil.
edition.cnn.com edition.cnn.com

I am not sure what resources Europe has, maybe lots of gold in Switzerland? (theres lotsa wheat in Ukraine for sure) But I am sure Europeans are buying lotsa american military hardware at the moment, USA arms companies must be making money hand over fist, especially with the ukraine conflict ramping up. The free weapons to Ukraine are probably new stuff they can actually test in the field or use as demos for arm sales, as well as to prolong the conflict so they can continue to sell more arms.
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They are not free weapons, they are paid by gov so the manufacturers and employees still profit ,pay tax .plus when it is free offered by NATO, it is actually USD back to the US paid by Europeans.
America is the clear winner from this.Second only by China.
How Europe can play this game is beyond belief.Suicide
 
Getting back to what was the original content of this thread, Wall Street On Parade writes about a research report put out last week during the Hurrican Ian news that basically went unreported by the MSM.
I have no doubt some here on ASF remember the GFC, and what sort of financial scamming by the big banks caused the GFC mayhem.
Complex derivitives.
An artificial financial instrument created by the banks, for the banks, but insured against loss by the Fed.
The research paper does not provide the names of the banks it studied. But it doesn’t have to. We know from the report published quarterly by the Office of the Comptroller of the Currency that the bank holding companies of JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America and Morgan Stanley hold more than 80 percent of all derivatives held at all banks in the U.S. today.

The report is authored by Dasol Kim, a Research Principal at OFR, and Andrew Ellul, a Visiting Fellow at OFR and Professor of Finance at Indiana University’s Kelley School of Business. In a blog post last Thursday, they summarize their findings as follows:

“In a recent working paper analyzing who banks chose as counterparties in the over-the-counter (OTC) derivatives market, the authors found that banks are more likely to choose riskier nonbank counterparties that are already heavily connected and exposed to other banks, which leads to an even more densely connected network. Furthermore, banks do not hedge these exposures, but rather increase them by selling rather than purchasing credit derivative swaps against these counterparties. Finally, the authors found that common counterparty exposures are correlated with systemic risk measures despite greater regulatory oversight following the 2008 financial crisis.” (Italic emphasis added.)

Let’s pause right there for a moment. The sentence we italicized above is the most frightening thing we have read since the Financial Crisis Inquiry Commission released its report on the 2008 financial crisis.

Selling credit default swaps (the most dangerous form of derivatives) allows the mega banks to collect ongoing payments from the entity that it sold the protection to, very likely hedge funds. But because the mega bank already has exposure to that lower-rated counterparty because it’s on the other side of its own derivative trades, it should be buying credit default swaps on that counterparty to hedge its own risk. This suggests that, once again, the mega banks on Wall Street are taking on catastrophic risks to dress up their profits and deliver fat annual bonuses to traders and top brass while counting on the taxpayer and the Fed to bail them out when they blow up.

For an idea of what can happen when a mega bank sells credit default swaps, consider how Howie Hubler, a star bond trader at Morgan Stanley, lost $9 billion. Hubler was one of those who made early derivative bets that the lowest-rated subprime bonds would fail during the 2007-2008 financial crisis using credit default swaps. He bought protection by purchasing credit default swaps on subprime debt. But because Hubler had to pay out premiums on these credit default swaps until the price collapse came, he sold $16 billion in credit default swaps on higher-rated debt, obviously to collect the premiums to offset what he was paying out while he waited. When the $16 billion turned out to be toxic as well, Morgan Stanley lost at least $9 billion.

According to a government audit of the Fed’s secret loans to the trading houses on Wall Street from December 2007 through early July 2010, Morgan Stanley was the second largest recipient (after Citigroup) of the Fed’s secret bailout loans, receiving a total of $2.04 trillion in cumulative loans from the Fed.
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Will Credit Suisse be the new Bear Stearns?
Mick
 
so who has all those derivatives ... THAT was the pivotal moment in the GFC and with a breaking German economy why aren't we watching the German banks ?? ( ditto for the UK banks )
 
not in Europe , thank you

your new asset is liable to be frozen ( or caught in a Covid lock-down )
 
Though most attention so far has focused on disposals from Credit Suisse’s investment bank – with executives confident of selling all or part of the profitable securitised products business – the board has also turned its attention to raising funds by selling non-core parts of its domestic business, known as the Swiss Universal Bank.

The parts that have been considered for sale include:
  • a stake in the SIX Group, which runs the Zurich stock exchange;
  • an 8.6 per cent holding in Allfunds, a listed Spanish investment company;
  • two specialist Swiss banks, Pfandbriefbank and Bank-Now; and
  • Swisscard, a joint venture with American Express.

Also, they are in the final stages of plotting a heavy round of job cuts, which could affect up to 6000 of the group’s 50,000 global employees.
 
This is a screenshot of their Balance Sheet (end of 2021)

Screen Shot 2022-10-17 at 5.53.19 AM.png

There are $11 Trillion in derivatives. Of that $8.8T are Interest rate swaps. It is these that are doing the damage.

Last week the Fed. sent to the Swiss Central Bank $10B in swaps, destined for the CS bailout. This is the first $3.5B

Screen Shot 2022-10-17 at 6.03.26 AM.png

CS will be, is being bailed out as we speak. The Fed will not make a second Lehman error as CS is a major player in world banking.

That being said, the entire fiat edifice is close to failure.

jog on
duc
 
The rumours were true, despite all the noise about investment bankers writing support articles for investment banks.

$4 billion loss Wtf?!!!! Now going for a cap raise from some sweet gulf money


finance.yahoo.com

Credit Suisse to Raise $4 Billion to Fund Sweeping Overhaul

(Bloomberg) -- Credit Suisse Group AG took the most dramatic steps yet to repair the bank, unveiling a restructuring that will see a multi-billion dollar capital raise, thousands of job cuts and carve out of the investment bank.Most Read from BloombergNew Covid Boosters Aren’t Better Than Old...
finance.yahoo.com finance.yahoo.com

Lehman moment?
 

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