One of the world’s biggest banks is on the brink of collapse

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by silvertomars

Credit Suisse CDS spread… balance sheet with assets of 727bn financed with only 42bn tangible equity at end q2… Mcap is a tiny 10bn… CFO today said “Credit Suisse is at a critical moment”… counterparty risks are increasing…

One of the world’s biggest banks insists it is in a “strong” financial position, amid fears of a looming Lehman Brothers moment that could spark a major crisis.

www.news.com.au/finance/business/banking/fears-credit-suisse-is-on-the-brink-of-collapse/news-story/38b7f2d35116cc565820e93a1ce8a6d9

There are a number of banks with severely impaired assets… trading at 70-80% discount to its book value implying huge losses to come from their loan books and/or derivative exposures… a bank in good shape should trade at book value plus a reasonable projected return on that equity…

With Credit Suisse possibly on the brink, the Office of Financial Research from this week: When choosing counterparties, banks tend to pick riskier ones and do not hedge such exposures. These exposures are correlated with systemic risk measures despite greater regulatory oversight after the crisis.

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www.financialresearch.gov/working-papers/files/OFRwp-22-06_counterparty-choice-bank-interconnectedness-and-bank-risk-taking.pdf

ABC Australia is reporting that a major investment bank (likely Credit Suisse) is on the brink, citing ‘a credible source’. The CDS’s of the bank have been trading as if a Lehman Moment was about to hit.

www.forexlive.com/news/there-are-some-serious-rumours-doing-the-rounds-about-a-major-bank-failure-20221002/

‘Big Short’ Burry Warns That a Repeat of the 2008 Crisis Is in Sight. The legendary financier reiterates his warnings of a market collapse on the way.

www.thestreet.com/technology/big-short-burry-warns-that-a-repeat-of-the-2008-crisis-is-in-sight

 

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