What’s going on at Credit Suisse / Deutsch Bank?

[KarlMac]

Twitter is alive with rumours about a ‘Lehman style collapse’, there’s plenty of articles from less reputable sources (crypto/small cap investment websites) but no big names carrying the story so far.

GFC2, European Boogaloo? Scaring central banks into taking action? Social media based doomsday wishful thinking?

Both banks have had a surfeit of cock ups over the last few years, from money laundering, ACM/Hwang collapse etc…

Take your bets!

https://www.swissinfo.ch/eng/bloomberg/credit-suis...

[Some Gump]

Google first page has stories from telegraph, reuters, etc etc. Not just the crypto tin foil hat websites now it seems.

[Juanco20]

It does feel like we're heading for an economic collapse unlike any seen before.

[JagLover]

Apparently their Credit default swap rates have reached GFC levels which sounds concerning on the face of it.

[Earthdweller]

Just reading that their debt is $2800bn .. Lehman bros was $600bn

That’s a lot of money

[Gecko1978]

I thought DB had been at risk for years since 2008 CS i was unaware of seems like the European melt down may occur who bails out DB is it the ECB

[Superflow]

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

That’s a lot of money

Looks like someone left the heating on.

[Tango13]

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

That’s a lot of money

What the fk have their risk analysis people been doing or should I say not doing to allow that sort of debt to accumulate?

On a more positive note both 'The Big Short' and 'Margin Call' were excellent films so I'm sure we'll see more of the same in the future

[valiant]

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

That’s a lot of money

Jeez! If they go under won’t that have a catastrophic effect on the whole financial system?

Don’t really know how high finance works bar a little googling but $2800bn is more than entire countries income.

[Murph7355]

Both have been limping for some time I think... Will be interesting to see what happens and how they are dealt with (DB from an ECB perspective, and CS from a parochial Swiss one).

[isaldiri]

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

Where are you seeing that their debt is $2800b? Their total liabilities look to be considerably smaller than that number.

[pork911]

Tango13 said:

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

That’s a lot of money

What the fk have their risk analysis people been doing or should I say not doing to allow that sort of debt to accumulate?

On a more positive note both 'The Big Short' and 'Margin Call' were excellent films so I'm sure we'll see more of the same in the future

won't be as entertaining dramatising working from home

[RogerDodgerSuperTodger]

pork911 said:

won't be as entertaining dramatising working from home

that gave the conspiracy theorists some proper wk material

[Tango13]

pork911 said:

won't be as entertaining dramatising working from home

Writing a decent script about a load of zoom calls will be tricky

I had to watch 'Margin Call' twice as Demi Moore stays fully clothed throughout and I thought I had missed a subtle plot twist somewhere

[RichTT]

isaldiri said:

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

Where are you seeing that their debt is $2800b? Their total liabilities look to be considerably smaller than that number.

[biggiles]

$ 2800 bn is the AUM of *both* DB and CS together, according to one person on on twitter and is mentioned in this article https://www.livemint.com/news/world/recession-trig...

If true, it's "interesting" to note DB+CS have a greater AUM than Lehman, but it's nothing to do with their market cap / share price / debt / balance sheet.

[Earthdweller]

isaldiri said:

Earthdweller said:

Just reading that their debt is $2800bn .. Lehman bros was $600bn

Where are you seeing that their debt is $2800b? Their total liabilities look to be considerably smaller than that number.

It was on a Twitter thread I saw earlier

[isaldiri]

biggiles said:

$ 2800 bn is the AUM of *both* DB and CS together, according to one person on on twitter and is mentioned in this article https://www.livemint.com/news/world/recession-trig...

If true, it's "interesting" to note DB+CS have a greater AUM than Lehman, but it's nothing to do with their market cap / share price / debt / balance sheet.

Is it though? DB look like they have 1300 billion total liabilities, CS have around 700b (of which per 2022 expected balance sheet ~180b is accounted as debt). CS tier 1 capital ratio is 19%, DB is 14.9%. Comparison to Lehman having '600b debt' as posted earlier doesn't really mean anything after all - especially when it's er... wrong in the first place.

CS credit default swap movements clearly shows the market believes the bank has a problem (similar to DB) but it's not anywhere near to an imminent 'going to default' stress level either.

[eyebeebe]

The AuM mentioned is the „Assets under Management“ that belong to the clients of the wealth management and asset management divisions. Only the cash part of those assets will be shown on the balance sheet as liabilities. The vast majority of the AuM is securities and aren’t shown on the banks‘ balance sheets, as they are neither assets of the banks nor liabilities, as they are held in the clients‘ names.

[Caddyshack]

Juanco20 said:

It does feel like we're heading for an economic collapse unlike any seen before.

I don’t think this news would warrant that conclusion.