Credit Suisse is Finally Going to Blow
Anyone else excited for the chaos?
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Nah feel a lot less secure about my job now
If one bank fails we are all worse off. The fear factor alone can severely punish not just the industry, but the economy as a whole.
It is in everyone’s interest that CS keeps the ship afloat, even if they have grossly mismanaged the bank.
Agreed, but at some point there’s gonna be a need for a reset. Can’t just keep doing the same things over and over again because governments can bail us out..
No fuck that. These are private enterprises. Some of them have been grossly mismanaged for over a decade.
Let the shitty banks fail. Let the banks that took outsized and unhedged risk fail.
If the economy has to hurt for a while, so be it. People will lose jobs and hurt for a while, and eventually move on to more economically productive roles.
This has become a bailout system in this country which is fundamentally incompatible with free markets and capitalism in general. For the first 230 years of this nation's history, banks and businesses failed and were consumed by others or discarded. Somewhere along the way, in the last 15 years that philosophy has changed.
This path is unsustainable.
The issue is that the private market is just as fucked as the public one. Hence why these banks are like this.
The idea of banks failing is not a recent trend, the FIDC deposit is almost 100 years old for a reason. While for someone like you (who is probably quite qualified) a bad recession is not the end of it all, for the average American it would be disastrous.
The last time the US let the market as sink deep as you would want us to allow, we ended up with the worst crisis since the Great Depression. And a lot of the pains the Western world saw afterwards, such a a polarization of politics or the rise of populism, are a direct consequence of that.
For someone in finance it may be easy to see the long run and understand economic cycles. For the average American who lives paycheck to paycheck (the vast majority), losing their jobs perhaps means pulling their kids out of college or losing their home.
We should change the system, agreed, but it would need to be a decades long project. Another big crisis would only sink us deeper.
truth
Preach
Time to get out of your books, or maybe open the ones about externalities.
People who lose jobs = people lose their healthcare cover in the US. Literally drives mortality rates up.
Also lose homes, etc.
The only part or the economy that benefits from this sort of scandal is the cash rich 0.01% that can deploy capital in distressed opportunities. For for 80+% of the people, that means getting fucked by something that they have zero power on, and they won’t benefit much from the recovery either.
Banks have been failing for 150 years, sure, but we’re also at a highly consolidated point in time. Who gave a fuck when local bank of Tucson failed in 1907, outside of the neighbourhood?
Banks have so much aspects of being public utilities, they should (and are!) be regulated as such. Capital control, returns cap, which go hand in hand with the knowledge that the system won’t let them fail. That’s the meaning of « too big to fail ».
Ya we tried that. Result was the Great Depression
Nobody has the balls to see this shit unravel.
How could a politician sell that to voters. “I brought equality to America, everybody eats shit now, Vote for me!”
The philosophy changed because governments realised that it's cheaper to bail out banks than allow a massive financial crisis to happen.
Worse off in the short-term? Yes. The long-term? It's positive.
Look at the chaos caused on financial markets by SVB, now imagine a global bank like CS going down. Don't want that to happen
Why would anyone who works in finance be excited by the chaos of a major bank imploding?
Exactly, they are acting as if they are shorting the CS SIVB from the get-go, hindsight clowns. Little do they know they will not be able to bring bread to the table in no time if the entire financial system is about to collapse
Short hedge funds are profiting
just don't fucking dance
Edit: Guy^ changed his original comment claiming he was the fortunate one to have been shorting cs/svb and wanted to watch the collapse.
Lmao sure, finra and sec def allows that. Good job on your first day compliance training
Because just about every body who posts "CS is going down! LFG!!!!" assumes that they'll keep their job in the event of an unexpected economic downturn. So usually overconfident morons with only a surface-level understanding of markets, macroeconomics, central banking, etc.
A major bank imploding actually hurts the other banks man.
Think of all the deals CS is in and the headaches it will cause lender groups.
The only sad part is that the idiots that ran CS and made millions will never be held accountable, never see prison and never make financial restitution for their awful decision making.
Makes you wish there was a tangible god sometimes.
A guy that can swoop in and dispense justice for once. I read some article that the CEO of SVB make like 10 bucks last year, it’s like these idiots get rewarded for taking unnecessary risk and never get punished for it.
Sooo you are saying 2008 can happen if CS collapses 💀
Almost makes you think that the US judicial system actually does offer advantages to those with money and power…
Worked in a law firm post college - it absolutely does favor the rich. Power is debatable on context but u can only get as much justice as u can afford.
Lawyers have very high depression rates, substance abuse etc. once they see how our system unfolds. Only area where law doesn’t blindly favor the rich is criminal cases that are obvious - others like fraud embezzlement etc. favor the rich with reduced sentences to next to nothing. Law isn’t about justice about how your attorney maneuvers, speaks, and a bit of luck or avoiding negative Nancy’s in the system. It’s sad but that’s how our nation is.
if they get bailed out - it also sets a bad precedent that risky behavior has no consequences which leads to further risk down the line. The big banks (Citi, JPM, BAML) all have strong capital ratios so not too worried, but some bad apples may have to fall.
Has moral hazard every seemed to actually matter? I'm sure it's directionally correct but I doubt even in world where there are zero bailouts and authorities just let it rip that we would avoid risk buildup in the financial system. The bankruptcy system itself probably adds more to moral hazard than bailout expectations. So does corporate limited liability. I'm not saying either of those things are bad (they aren't), but I would expect financial blowups to be inherent and unavoidable.
If they don't bail out CS when the time comes we're in Lehman territory (also a moral hazard play by the fed) and we will need to bail out far more.
This behavior by banks existed long before there were government bailouts and were often at least as destructive
For whom? What other major banks could reasonably expect to get bailed out by the Swiss government? UBS +.......?
It depends on how the bailout is done.
If it includes firing all the senior people (C-level, relevant product-line heads, etc), wiping out shareholders, etc, I don't think a bailout necessary sets a bad precedent.
If it is just the government handing out money and increasing regulation, absolutely.
It would be very naive of us to think that CS default won't take others down as well.
For context, assets at CS are valued at $1.47 trillion which is 2.5x the value of assets that Lehman had when it filed for bankcruptcy. So, in addition to 50000 at CS losing their jobs, it will literally push financial sector and global economy towards a long-term slump.
Therefore, considering the systematic importance of CS to whole european economy, I think if push comes to shove, it will either get a bailout or bought out by an American Bank.
mate there's no way you are 'excited for the chaos' such a dick thing to say- real people r gonna lose their jobs....
I enjoy how bank shareholders / investors are capitalist in bull markets and turn socialists in bear markets and look for backstops. If you want banks to be bailed out, fine, just don't start complaining about too much oversight / regulation if you do.
It's called hypocrisy and it's quite popular nowadays, not only in bank boardrooms. Some of my favorite examples:
we live in great times. 21st century is paradise.
CS will get capital if required from the Swiss National Bank: https://www.bloomberg.com/news/live-blog/2023-03-15/credit-suisse-in-cr…
So everything should be good for them if this goes the wrong way
Swiss NB doesn't have the firepower. CS has ~500bn in deposits, Switzerland's GDP is ~800bn. This is a massive fucking problem. The Swiss stayed out of the EU to their peril, and I think they're about to find out that you can't have your cake and eat it too. CS is too damn big with all the benefits of a small, regulation-lite, country.
Switzerland will go begging to the ECB and US in short order and will get nothing - there is zero political will to bail out a foreign bank in US, and the Swiss have thumbed their noses at the rest of Europe for decades. I see the way out of this being a merger (at gunpoint) with UBS.
I am nervous for UK banks as well, given their similar lack of fire power to backstop a global bank, but if anyone can do it, Rishi can.
Do you think 50bn francs they got from SNB will be enough to save them?
Yeah everything should be good……….
Worked there. A part of me wants this bank to sink and take the whole european financial system down. Let's wait and look at how the situation unfolds.
why the hate towards euro banking? European finance is 3/4 wealth management.
Because European banking is pure bureaucracy and crony capitalism
CS will survive. Sweds won’t let it die
Damn Vikings and their private banking industry
yes sweden, the infamous tax shelter
mark
First the service industry, now the banking industry. Every industry i work in collapses shortly after getting my footing.
What should i get into next y’all? Slavery? Cobalt mining? Blood farming?
sewing shoes in Asian basements for $2 per month and harsh conditions
Tried that, I went to a non-target that didn’t offer Mandarin. You think I could get in on diversity?
Go into tech. Learn coding. Work at Google and let me know so I can prepare my shorts
No crashes would have happened if we didn’t live on a interest based society and had morals simple
ur right, living in an interest based society really is fucking things up but its a very unpopular thing to say
im bout blowww
Del
Don’t worry this thing works at CS and will help fix this with fluidity, I mean, liquidity
https://twitter.com/Tim_jbo/status/1636375924823433217?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1636375924823433217%7Ctwgr%5Ee440cbd947db5c2476e71b74a0f21e20d3937685%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.newsweek.com%2Fpips-bunce-credit-suisse-executive-gender-fluid-identity-bank-1788557
I am really ready for this trend to be over
It’s bad, it’s not about talent. Just weirdo shit for attention and viability
I see the alphabet/ integer crowd is in force on WSO
This shit show is making me really glad my IB offer got rescinded and I am going to be working in corp dev for the next 2-4 years. I am going to be getting deal reps for a major, well-banked, Fortune 250 without having to deal with this mess as directly.
this shit show will probably affect your corp dev job too. just lol if you think you'll be getting deal reps while the global economy gets fucked
When did I ever say that my job wouldn't be impacted... all I said was that I would be getting deal reps in a more stable situation where the impacts would be less direct. And this is true. Did you stop reading at the "Fortune 250" part of my comment? This can't possibly be the hot take you misrepresent it as being.
I will be working at a company where most of the business is just an old economy cash generation machine and there is a newer, emerging component of the business. In this newer, emerging component of the business, this cluster fuck could actually be beneficial to my company's dealmaking. A huge number of the newer businesses that are competing with this emerging component of the business have viable businesses if they can survive this mess. In other words, if this gets bad that will open up a ton of opportunities for us to buy low. If things get back to "normal" tomorrow than the normal deal flow would be there. And our cash cow will still be printing money because like with tobacco, some industries just print money all the time. Sure there will almost guaranteed to be less total deals (which no one has disagreed with) and the deals will likely be of a different type but going from looking at 100 deals a year to 50 certainly counts as getting deal reps for a team of 9, does it not?
Banking is all about trust. Once consumers lose trust, it’s all over
https://www.ft.com/content/17892f24-4ca0-417f-9093-289b019a0852?sharety…
UBS to merge with CS based on FT
Everything, everywhere all at once!
Shit bank, must die.
Rip my internship this summer ☠️
I start full time this summer and am worried as fuck
Same, have no idea what's happening
At least u don't have a family to feed compared to existing cs employees :) that's the bright side of it. U have plenty of time to apply elsewhere
Same for me in Zurich. No way to find an alternative on such short notice. Worried as fck.
Just received reassurance from the team that my internship (IBD - Zurich) is not in jeopardy ... hope that helps
Good for you man. Is this notice from the HR of your team? I’m an incoming IBD SA in Apac and still heard nothing from the team.
I am an incoming Summer Associate at US and have yet to hear anything……..
So did Michael Klein just get clapped after selling his bank to CS for $175m in form of convertible note & warrants?
https://www.credit-suisse.com/articles/media-releases/2023/02/en/acquis…
He's the one who asked for this mess, deserves it.
Worked at this firm. Can't say I'm surprised. Full of bureaucracy, internal fighting, and mid-level managers who are toxic, incompetent, and have no interest in developing new talent. Which is understandable given all the crap happening in recent years: the high performers have already jumped ship given the shitty bonuses. It's almost coming to a point that working at CS is viewed as a negative: all the scandals, the bonus installments joke, being left holding the bag in Archegos incident, etc. Also it's funny how the handled Archegos: they scrapped almost the entire prime brokerage team. PB is good business, it's just you don't have the risk management in place. But nah. The upper management team is actually decent, decent people and smart, but don't have the guts to trim the incompetent mid-level fat.
They have always been the most aggressive in pricing in many of the markets businesses, which gives them decent volume and revenue at the expense of margins and also leaves less margin for error.
Finally somebody says it. Taking on more risk for less incentive is the "picking up pennies in front of a steamroller" strategy that was also common to SVB.
Gen Z man.
Imagine being excited about a potential global economic disaster “for the meme”.
You're also Gen Z, AN2.
Also, OPs a VP
People just cope in different ways man. I have a buddy who has/had an offer at CS and he's memeing to cope.
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