Credit Suisse

The shit show has begun.

Everything is cula bula, the bank is in the process of updating confidence .
Oh Fuck.

Nothing new. Last time around…


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Remember when Ireland was told it couldn’t touch the bond holders.

Well these Alternative Tier 1 Coco bonds have come along since, and today the Swiss completely wrote off $17bn worth.

Even the shareholders may get cents in the dollar, but investors in these AT1/Cocos get cleaned out. The back of the queue.

What that means to future credit availability, pensions and insurance costs will be worked through for some time.

Credit Suisse writes down $17 billion of debt, angering holders | Reuters

Credit Suisse writes down $17 billion of debt, angering holders

LONDON/NEW YORK, March 19 (Reuters) - Credit Suisse said 16 billion Swiss francs ($17.24 billion) of its Additional Tier 1 debt will be written down to zero on the orders of the Swiss regulator as part of its rescue merger with UBS (UBSG.S), angering bondholders on Sunday.

FINMA, the Swiss regulator, said the decision would bolster the bank’s capital. The move reflects authorities’ desire to see private investors share the pain from Credit Suisse’s troubles.

Why Credit Suisse ‘CoCo’ Bonds Are Causing So Much Anxiety

How does this impact the wider CoCo market?

The decision to ignore market convention — that shareholders are the first to take a hit before AT1 bonds face losses — could prove to be a huge blow to the $275 billion AT1 market and raises serious doubts about the prospects for other lenders’ CoCos. To compound the misery, it’s also the market’s biggest loss, far eclipsing the one other instance of a lender’s CoCos being wiped out. Back in 2017, junior bondholders of Spanish lender Banco Popular SA suffered an approximately €1.35 billion loss when it was absorbed by Banco Santander SA to avoid a collapse after failing to plug a big capital hole. On that occasion, the equity was also written off, while regulators forcibly wrote off its CoCos. Credit Suisse’s writedown is far bigger and must raise serious questions about what comes next for the market.

How is DB looking?

Markets don’t look like they are buying what the Fed and ECB are selling so far anyway…

DB dropped >12% at the open and then pulled back a bit

fair play to the swiss for holding their ground on the bondholders, our mental midgets prefered the bellyrubs and rolled over of course. Id say Deutsche Bank has a world of crud on their books, the next domino to fall.

considering rates are going to have to go down inflation of tangible assets is going to absolutely rip now…


I’m going to invest it all in wheel barrows

So when the point is reached where the can is no longer kicked down the road (and we can argue about when that will happen although when you’ve got the everything bubble, what’s left?)…place your bets - hyperinflation or depression…

CS, UBS and DB all down 6% on the open

DB currently down 14%

Bring on the CBDC - safer place.

11th Oct 2010

Don’t believe anything until it has been offically denied.