Australian (ASX) Stock Market Forum

Credit Suisse collapse rumours

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wayneL said:
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.
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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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Not bad...

1668235913590.png
 
Are you sure this is not just "Fools' Gold" here again?

I think this is a Boom in "Industrial Metals" !
( I apologize to all the GOLD Freaks out there but I have always excluded Gold as an Industrial Metal)"
I also exclude Wheat and Soybeans

Sorry 'bout that

XYZ Yacht.GIF
I think I posted this in the wrong thread?
Cancel if you like?
 
Credit Suisse has issued 889 million new shares at 2.52 Swiss francs per share, as part of a $6.3 billion (4 billion francs) capital raise. The share issue is expected to raise approximately $3.5 billion (SF2.24 billion ).

The bank also confirmed the issue of 462 million new shares by way of a share placement to qualified investors.

Credit Suisse shares hit a record low of 3.55 francs overnight after falling 1.9 per cent. Shares are down almost 60 per cent over the past year.
 
Dona Ferentes said:
Credit Suisse has issued 889 million new shares at 2.52 Swiss francs per share, as part of a $6.3 billion (4 billion francs) capital raise. The share issue is expected to raise approximately $3.5 billion (SF2.24 billion ).

The bank also confirmed the issue of 462 million new shares by way of a share placement to qualified investors.

Credit Suisse shares hit a record low of 3.55 francs overnight after falling 1.9 per cent. Shares are down almost 60 per cent over the past year.
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But they said there was no risk? ?
 
waterbottle said:
But they said there was no risk? ?
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no risk of WHAT ?? ( the risk of telling the truth this time , perhaps ?? )

some commentators are suggesting the Swiss National Bank has been providing swap-lines ( and possibly to other Swiss banks as well as CS )
 
The market experts appear to still hold fears for Credit Suisse.
From Wall Street On parade
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.

The price of a Credit Default Swap reflects the cost of insuring oneself against a debt default by the bank. Who might be desperate to buy protection against a default by Credit Suisse and driving up the cost of that protection? The mega banks on Wall Street that are counterparties to its derivative trades come to mind, as well as hedge fund speculators.

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.

Credit Suisse is Switzerland’s second largest bank, after UBS. It has been embroiled in nonstop scandals that suggest incompetent risk controls inside the bank.

In late March and early April of last year, Credit Suisse lost $5.5 billion from the highly-leveraged, highly concentrated stock positions it was financing via tricked-up derivatives for Archegos Capital Management, the family office hedge fund of Sung Kook “Bill” Hwang. Archegos blew up on March 25, 2021 after it defaulted on margin calls to the banks financing its trades.
Credit Suisse’s reputation took another hit from its involvement in the Greensill Capital scandal and its infamous spy-gate scandal in 2019 where the bank spied on, and followed, various employees.

And if all of this wasn’t enough, on November 2 S&P cut Credit Suisse’s credit rating to one notch above junk. That was followed by more disturbing news on November 23 when the bank reported that its clients had yanked $88.3 billion of their assets out of the bank.
According to an historical timeline on the Credit Suisse website, it was previously known as Schweizerische Kreditanstalt, which was eventually shorted to SKA. The timeline notes that SKA’s New York Branch was granted a license to accept deposits in 1964. Credit Suisse’s New York branch has continued for decades to accept deposits, but they are not insured. In the resolution plan for Credit Suisse that it filed with the Federal Reserve in 2020, it writes:

“Our New York Branch is not a member of, and its deposits are not insured by, the FDIC. CS’ biggest U.S. presence is through its broker-dealer related businesses. Typically broker-dealer activities are resolved with a rapid runoff of the businesses as long as the resolution strategy is supported by adequate operational capabilities, such as the ability to transfer client accounts to peer institutions while causing minimal disruptions to the broader financial markets.”

Wall Street trading houses accepting uninsured deposits resulted in the banking crisis of the early 1930s when thousands of banks failed and people rushed to pull their money from uninsured banks. Congress passed the 1933 Glass-Steagall Act banning the combination of investment banks/brokerage firms with federally-insured banks. (Federal deposit insurance was also created under the Glass-Steagall Act to restore confidence in the U.S. banking system.) The Glass-Steagall Act served the nation well for 66 years until its repeal under the Bill Clinton administration in 1999, allowing trading firms to merge with federally-insured, deposit-taking banks. It took just nine years without Glass-Steagall for Wall Street to collapse in a replay of the crash of 1929.

Despite both Democrats and Republicans promising in their 2016 campaign platforms to restore the Glass-Steagall Act, the idea quickly bit the dust once the Trump administration took office. (See Mnuchin Says Trump Administration Never Intended to Restore Glass-Steagall Act.) Instead of Congress removing the Wall Street trading casino from the nation’s federally-insured banks, Congress has sat back and allowed the crypto circus to spread its risk directly into federally-insured banks.

It’s time for the American people to pick up the phone and demand better from their elected members of Congress.
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Hardly a ringing endorsement, and perhaps explains why the CD's are so expensive.
Am I allowed to say another bear sterns/Lehman bros moment?

Mick
 
Seems the Swiss did just fine in the end. A little bruised but ok.

But maybe they're aiding in the collapse of Adani?? It's one thing when a short seller goes after you - but a european bank taking a small bit of action as well might be the straw to break the ? back?

www.forbes.com

Credit Suisse Reportedly Assigns Zero Lending Value To Adani Group Bonds Following Hindenburg Allegations

The Swiss investment bank has stopped accepting Adani Group’s dollar-denominated bonds as collateral for margin loans.
www.forbes.com www.forbes.com

www.barrons.com

Adani Enterprises Calls Off Equity Offering

In a statement, Adani said that it had decided "not to proceed with the further public offer," saying it " would not be morally correct."
www.barrons.com www.barrons.com
 
since i was only interested in the GFC years after the event i should probably ask who is underwriting ( buying the derivatives ) those crazy banks/hedge funds this time , AIG was the 'too big to fail ' trigger last time , i wonder who it is this time

( surely not the US Fed )
 
waterbottle said:
Largest shareholder has dumped shares. Now they're delaying the release of their 2022 annual report due to accounting issues.

www.wsj.com

Credit Suisse Delays Annual Report After Last-Minute SEC Request

The Swiss bank said the SEC called for more information on the bank’s consolidated cash flow statements from 2019 and 2020, which it later revised.
www.wsj.com www.wsj.com
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am surprised Deutsche Bank isn't in a similar position first , but here we are , vicious rumors now seeming to have some substance
 

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