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Things not going well for Credit Suisse


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Relax, rumor has it Jim Cramer says they are fine.

But seriously, Credit Suisse looks to be in big trouble.  Bear Sterns/Lehman Bros. kind of trouble.

I also hear that Deutsche Bank is hurting (still? or again?).

Central banks are stuck between taming inflation (and letting the banks fail risking systemic failure) or bailouts (stoking inflation).  Not great, Bob!

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1 minute ago, Hefeweizen said:

... Weirdly it’s US banks that seem much less levered than some of the euros. 

Perhaps because they aren't having to deal with the stress of forex moves (strengthening dollar against their local currencies).  Fed may be forced to pivot on the rate raising to ease the stress on Euro banks.

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Just now, bernorange said:

Perhaps because they aren't having to deal with the stress of forex moves (strengthening dollar against their local currencies).  Fed may be forced to pivot on the rate raising to ease the stress on Euro banks.

Wouldn’t that be the ultimate fuck you to people.  Yeah we’re tightening but our banking buddies in Europe are hurting so we’re back to QE.

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This is such a weird time to be following the global financial news.

I don't even know where to start. All we really need now to completely throw absolute chaos is to see a massive implosion of the Chinese real estate market sparking a ton of defaults and the corresponding bank runs that could collapse their banking industry as well. (Note at the time, I do not have any information implying that there is any more of an impending real estate collapse in China than during the last 6 months)

If the euro and Chinese banks all implode, then what?  I don't like to do doomsday scenarios, but I do like to try and gameplan on what to do if they do happen as those extreme events tend to be some of the best opportunities to generate extreme returns.

 

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Posted (edited)
8 minutes ago, Laxtonto said:

This is such a weird time to be following the global financial news.

This is fuck all (for now) compared to late 2007 - early 2009.

Quote

If the euro and Chinese banks all implode, then what?  I don't like to do doomsday scenarios, but I do like to try and gameplan on what to do if they do happen as those extreme events tend to be some of the best opportunities to generate extreme returns.

Everyone gets inundated with articles to buy gold, silver, shitcoins, guns & ammo.

Just like every other time the markets act naughty.

Edited by Fudge Nuggets
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Just now, Fudge Nuggets said:

This is fuck all (for now) compared to late 2007 - early 2009.

Don't remind of those days... I was finishing up a degree and looking to get a "real job" during that. One of the reasons I ended up going to grad school and eventually getting a PhD..

 

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3 minutes ago, Laxtonto said:

Don't remind of those days... I was finishing up a degree and looking to get a "real job" during that. One of the reasons I ended up going to grad school and eventually getting a PhD..

 

I got very lucky back then in that I was assigned to a natural gas development project that was years behind schedule and a few billion $ over budget when they brought first gas on line in January 2009.  It was also in a part of the world that no one wanted to go.  The major international oil and gas company running the show wasn't going to shut down shit and since no one else would want to go there I had probably the safest job in my company at the time.

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9 hours ago, Laxtonto said:

Don't remind of those days... I was finishing up a degree and looking to get a "real job" during that. One of the reasons I ended up going to grad school and eventually getting a PhD..

 

I graduated in 2009 with a degree in Forestry. It took me a year and a half just to get a job that paid over $10/hr. I should have just gone back to school to get a degree in engineering. 

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34 minutes ago, NotActuallyALonghorn said:

I graduated in 2009 with a degree in Forestry. It took me a year and a half just to get a job that paid over $10/hr. I should have just gone back to school to get a degree in engineering. 

Yep, lots of Smokey the Bear mother fuckers make the easy transition to engineering.

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To think, this is all because of Bill Hwang.

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Most experts have pointed out that yes, Credit Suisse’s rapid CDS jump does mean investors think the firm has a higher probability of defaulting on its loans. But if you zoom out a little, that probability is still very low

From yesterday which is a good reality check:

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As of 9 a.m. New York time today, five-year CDS on Credit¬†Suisse¬†Group AG was trading at about 350¬†basis¬†points, meaning roughly ‚ÄĒ¬†roughly! ‚ÄĒ¬†that I would have to pay you $3.50¬†per year for this bet, and you‚Äôd pay me $100 if Credit¬†Suisse¬†defaults. What does this tell you about the market-implied probability that Credit¬†Suisse¬†will default on its debt? Well, Credit¬†Suisse¬†CDS was trading at about 250¬†basis¬†points¬†on Friday,¬† about 135 in June, about 57 at the start of the year. So it tells you that the market-implied probability of default has gone¬†up¬†a lot. But it is still absolutely¬†low. You would not charge me $3.50 per year for $100 of insurance against Credit¬†Suisse¬†defaulting unless you thought the chances of that happening were slim.

 

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  • 3 weeks later...
On 10/3/2022 at 10:48 AM, Laxtonto said:

Don't remind of those days... I was finishing up a degree and looking to get a "real job" during that. One of the reasons I ended up going to grad school and eventually getting a PhD..

 

I kid I kid.

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