Credit Suisse - Is it going to go bust, if so what happens?

Credit Suisse - Is it going to go bust, if so what happens?

Author
Discussion

Gecko1978

8,098 posts

144 months

Monday 13th March
quotequote all
Carl_Manchester said:
Credit Suisse CDS has hit an all time high.

Over last say 6 months would be more useful plus what are CDS doing at other firms

Carl_Manchester

Original Poster:

10,775 posts

249 months

Monday 13th March
quotequote all
that graph you seek, it's on page one. CS is way out west.

Gecko1978

8,098 posts

144 months

Monday 13th March
quotequote all
Carl_Manchester said:
that graph you seek, it's on page one. CS is way out west.
Lol yep it is

Carl_Manchester

Original Poster:

10,775 posts

249 months

Tuesday 14th March
quotequote all

Oops (subscription required).

"Credit Suisse finds ‘material weaknesses’ in financial reporting controls"

https://www.ft.com/content/3605c3fb-973d-440d-88e3...

Gecko1978

8,098 posts

144 months

Tuesday 14th March
quotequote all
Carl_Manchester said:
Oops (subscription required).

"Credit Suisse finds ‘material weaknesses’ in financial reporting controls"

https://www.ft.com/content/3605c3fb-973d-440d-88e3...
It feels like you are willing it to fail and I am not convinced it will. The material weakness comment has also been. Made about a number of banks over the years that are still here. (I know this having seen feed back from regulator when working on projects to enhance those controls)

PeteinSQ

2,228 posts

197 months

Tuesday 14th March
quotequote all
My friend works at CS in the US and I know that a lot of people got a big fat zero for a bonus this year. I hope for his sake that they don't go under.

86

1,820 posts

103 months

Tuesday 14th March
quotequote all
Gecko1978 said:
pquinn said:
Bluequay said:
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
A banks share price and it's solvency are not necessarily related.
They are when a run starts like it did with SVB.
I worked at SVB untill end of last year. So I won't comment on solvency or customers I will say broadly they are well run and it looks like this incident was driven by external factors.

I might add I also have worked at CS and it was different
Looks like they didn’t understand duration risk. Seems they also didn’t understand their business model highly leveraged and below threshold of regulatory stress testing oversight

https://amp.theguardian.com/business/2023/mar/11/s...

https://www.foxnews.com/politics/head-risk-assessm...

Four Litre

1,737 posts

179 months

Tuesday 14th March
quotequote all
86 said:
Gecko1978 said:
pquinn said:
Bluequay said:
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
A banks share price and it's solvency are not necessarily related.
They are when a run starts like it did with SVB.
I worked at SVB untill end of last year. So I won't comment on solvency or customers I will say broadly they are well run and it looks like this incident was driven by external factors.

I might add I also have worked at CS and it was different
Looks like they didn’t understand duration risk. Seems they also didn’t understand their business model highly leveraged and below threshold of regulatory stress testing oversight

https://amp.theguardian.com/business/2023/mar/11/s...

https://www.foxnews.com/politics/head-risk-assessm...
Just goes to show how some of these big companies lose their way and forget the basic principles. Well I guess a lot of them can sit at home now and congratulate themselves on how diverse and inclusive they were. Its a shame as I guarantee a lot of the clowns that brought this problem around will be re-hired to repeat the same behaviour elsewhere, whereas others further down the tree without any say in what went on will be the ones who suffer.

Gecko1978

8,098 posts

144 months

Tuesday 14th March
quotequote all
Four Litre said:
Just goes to show how some of these big companies lose their way and forget the basic principles. Well I guess a lot of them can sit at home now and congratulate themselves on how diverse and inclusive they were. Its a shame as I guarantee a lot of the clowns that brought this problem around will be re-hired to repeat the same behaviour elsewhere, whereas others further down the tree without any say in what went on will be the ones who suffer.
Essentially C suite took cash an ran everyone else is back to work in short term either for the state in the US or HSBC in the UK. Life simply goes on

wibble cb

3,263 posts

194 months

Wednesday 15th March
quotequote all
PeteinSQ said:
My friend works at CS in the US and I know that a lot of people got a big fat zero for a bonus this year. I hope for his sake that they don't go under.
I don't think the swiss govt will allow them to go under, they are designated an SIB, so will get rescued in some way or other.

https://en.wikipedia.org/wiki/List_of_systemically...

I think the shareholders would be SOL though.

Carl_Manchester

Original Poster:

10,775 posts

249 months

Wednesday 15th March
quotequote all

"Credit Suisse Top Holder Rules Out Investing More After Drop"

https://www.bloomberg.com/news/articles/2023-03-15...

"How Switzerland’s once-feted banking industry became a national embarrassment"

https://www.telegraph.co.uk/business/2023/03/14/cr...

Subs. required.


Digga

37,846 posts

270 months

Wednesday 15th March
quotequote all
It's been like watching a slow motion train wreck. Any firm whose CEO's office is in the revolving door at reception is clearly going to struggle.

Carl_Manchester

Original Poster:

10,775 posts

249 months

Wednesday 15th March
quotequote all
CNBC are saying that trading has been halted after a 21% price drop on the CS shares.

https://www.cnbc.com/2023/03/15/credit-suisse-shar...

and here goes the CDS (to 'da moon!)



Swiss regulator statement incoming in 3....2.....1.......

Edited by Carl_Manchester on Wednesday 15th March 11:10

turbobloke

97,901 posts

247 months

Wednesday 15th March
quotequote all
Carl_Manchester said:
CNBC are saying that trading has been halted after a 21% price drop on the CS shares.
Wider sector fallout incoming?

Carl_Manchester

Original Poster:

10,775 posts

249 months

Wednesday 15th March
quotequote all

It does not feel that way to me unless you are talking about other zombie banks like Unicredit.

But in these situations (the emperor has no clothes type situations), usually a huge fraud is uncovered somewhere in the financial system.

Madoff escaped being found out when he should have been found out as he got lucky and got bailed out but I do wonder if/where we will see one amongst the incoming carnage. e.g. Jérôme Kerviel



Four Litre

1,737 posts

179 months

Wednesday 15th March
quotequote all
Carl_Manchester said:
CNBC are saying that trading has been halted after a 21% price drop on the CS shares.

https://www.cnbc.com/2023/03/15/credit-suisse-shar...

and here goes the CDS (to 'da moon!)



Swiss regulator statement incoming in 3....2.....1.......

Edited by Carl_Manchester on Wednesday 15th March 11:10
Surely only a matter of time now. Apart from a bailout they are toast.

Gecko1978

8,098 posts

144 months

Wednesday 15th March
quotequote all
Four Litre said:
Carl_Manchester said:
CNBC are saying that trading has been halted after a 21% price drop on the CS shares.

https://www.cnbc.com/2023/03/15/credit-suisse-shar...

and here goes the CDS (to 'da moon!)



Swiss regulator statement incoming in 3....2.....1.......

Edited by Carl_Manchester on Wednesday 15th March 11:10
Surely only a matter of time now. Apart from a bailout they are toast.
Yeah if I read correctly UniCredit and Monte dei Paschi, as well as Societe Generale all suspended

Gecko1978

8,098 posts

144 months

Wednesday 15th March
quotequote all
pquinn said:
Bluequay said:
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
A banks share price and it's solvency are not necessarily related.
They are when a run starts like it did with SVB.
LLoyds, Credit Suisse, RBS, SVB worked at all of them and look what's happened....#don'thireme

Carl_Manchester

Original Poster:

10,775 posts

249 months

Wednesday 15th March
quotequote all
Four Litre said:
Surely only a matter of time now. Apart from a bailout they are toast.
A few people on twitter have done the CDS maths and the implied risk Credit Suisse going bust is now 38% or, just over 1 in 3 chance.

Source is 'Holger Zschaepitz'.

Gecko1978

8,098 posts

144 months

Wednesday 15th March
quotequote all
Carl_Manchester said:
Four Litre said:
Surely only a matter of time now. Apart from a bailout they are toast.
A few people on twitter have done the CDS maths and the implied risk Credit Suisse going bust is now 38% or, just over 1 in 3 chance.

Source is 'Holger Zschaepitz'.
Will the ECB raising rates put further stress on them. If SNB sold shares I suspect that would do it