Recession Credit Suisse - DOOM

[jamesbrown]

It isn't a shock in general, because everyone can plainly see what is happening and central banks have been telegraphing the changes.

However, the financial system is complex and the levels of risk/exposure to certain instruments that are highly sensitive to rates are not always transparent until it's too late. For example, in zeroing out the AT1 bonds of CS, holders of CoCo bonds more generally will currently be doing their nut and the whole market will be repricing risk, just because they wouldn't have anticipated being behind shareholders when taking a hit (even though they knew, in theory, their bonds could be zeroed out, which is indeed the whole point of them).

[GigiBronz]

it's quite simple, banks get deposits and then they invest that money in supposedly risk free assets. It's all a happy go lucky.

The products they were invested in were gov bonds so that went agains them and with the withdrawals they could not meet capital requirements.

Everyone was expecting interest rates to go up, there is no surprise there for the sector. The regulators are asleep at the wheel and the bankers were milking as much as they can and kicking the can down the road. Of course everyone knew, but short terms bonuses are more important than long term solvency.

Most likely a few other banks will follow.

The financial system is a mechanism of extracting capital from the working class and moving it into their pockets. By that definition it works as intended.

[Fraidycat]

Deutsche Bank next? Deutsche Bank shares slide 13% after sudden spike in the cost of insuring against its default

[jamesbrown]

Ouch

SVB and CS were never going to be the end of this. The markets won't be happy until there has been a proper bank run/failure or the rate rises have been paused/reversed or some other obnoxious intervention adopted

[GigiBronz]

Deutsche Bank next? Deutsche Bank shares slide 13% after sudden spike in the cost of insuring against its default

yes, this seems very likely. DBK will be the next domino piece that will fall resulting in other failures

The timeframe is uncertain as they’ve been going up and down and current prices / CDS costs have been encountered in the past.

All will go down when our ruling masters will allow it to go down.

[Largely Ginny]

yes, this seems very likely. DBK will be the next domino piece that will fall resulting in other failures

The timeframe is uncertain as they’ve been going up and down and current prices / CDS costs have been encountered in the past.

All will go down when our ruling masters will allow it to go down.

Wonder what the Friday 1pm news stream from Plymouth has to say about all this

[SueEllen]

Wonder what the Friday 1pm news stream from Plymouth has to say about all this