Tuesday, March 21, 2023

In Spite Of Government Bail out And Takeover by UBS, Swiss bank giant Credit Suisse loses more than 60 percent of its value


As we reported on Monday, the collapse of Swiss banking giant Credit Suisse sent shock waves through global stock markets that are still reverbrating. Banking and finance corportions experienced a sharp drop in value following the announcement by Swiss authorities that troubled Credit Suisse would be taken over by UBS Group. In an effort to prevent an international banking crisis, central banks took action to alleviate concerns, the UK’s Daily Mail reported.

In premarket trading today, Credit Suisse shares continued to fall, now having dropped 60.5% since news of the bank's financial troubles broke at weekend. When markets opened this morning they hit a new low while UBS itself experienced an 8% loss. These movements came after a frenetic dumping of European banking shares on Asian markets, where what little investor confidence there had been in official measures to contain a banking crisis evaporated quickly, the report continued.

On Sunday, after a cash injection of €54billion by Switzerlands Central Bank had failed to save the retail banker, the most notable intervention since the global financial crisis of 2008 occurred, with UBS acquiring Credit Suisse for 3 billion francs ($3.2 billion) in a sudden merger, and the world’s leading central banks committing to daily dollar funding offerings. In a deal orchestrated by Swiss regulators, UBS Group AG agreed to take over the 167-year-old Credit Suisse Group AG and absorb potential losses of up to $5.4 billion, said the outlet.

The central banks of the world announced coordinated actions to stabilize banks. They also provided access to a loan facility that allows banks to borrow dollars from the United States if needed, which was a common practice during 2008’s crisis. However with the status of the US$ as global reserve currency no longer assured, a repeat of that policy may not guarantee the same result.

The UBS acquisition has caused investors to focus on the huge financial loss that Credit Suisse bondholders will suffer. This has increased anxiety about key risks such as contagion and the fragility of U.S. regional banking systems, said the report. There is also a continuing concern about the financial health on mant banks in the European Union.

Key player in the deal to save Credit Suisse were the central bank of Switzerland, the Swiss National Bank. That’s the very same central bank that had quietly bailed out UBS, the new owner of Credit Suisse, during the financial crisis of 2008 with the assistance of similar dollar swap lines from the Federal Reserve (the “Fed”) – the central bank of the U.S.

In 2011, following an audit of its activities by the Government Accountability Office into its activities the Federal Reserve “In October 2008 the Federal Reserve Board allowed the Swiss National Bank to use dollars under its swap line agreement to provide special assistance to UBS, a large Swiss banking organization. Specifically, on October 16, 2008, the Swiss National Bank announced that it would use dollars obtained through its swap line with FRBNY [the Federal Reserve Bank of New York] to help fund an SPV [Special Purpose Vehicle] it would create to purchase up to $60 billion of illiquid assets from UBS. According to FRBNY data, from December 11, 2008, through June 2009, Swiss National Bank drew dollar amounts generally not exceeding about $13 billion to help fund this SPV that served a function similar to that of the Maiden Lane SPVs. Federal Reserve Board staff acknowledged that this was an atypical use of swap line dollars as the swap line agreements were initially designed to help foreign central banks provide dollar loans broadly to institutions facing dollar funding strains.”

Little wonder then that the takeover of Credit Suisse by UBS has failed to restore confidence and in fact seems to have increased investors nervousness about what may be about to happen in global finance.

As markets opened today, European bank shares plunged by more than 5 percent. Credit Suisse’s shares plunged over 63 percent while those of acquirer UBS fell nearly 13 percent. The wider European STOXX 600 dropped 1.6 percent before making a modest recovery.


The Demise Of Dollar Hegemony: Russia Breaks Wall Streets's Oil-Price Monopoly In a move that went almost completely unreported in mainstream media, Russia has recently opened a market for the trading of physical and 'paper' oil (futures) in Moscow in Roubles. This is the most blatant challenge yet to the domination of the US dollar in world trade.

The Demise Of Dollar Hegemony: Russia Breaks Wall Streets's Oil-Price Monopoly
Significant moves in the global chess game have just rendered the huffing and puffing of warmonger Obama meaningless and will break Wall Street's monopoly in controlling oil markets. The move is part of Vladimir Putin's long-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, in effect ...

Corporate Banker's $1.5 Quadrillion Conspiracy: EU Accuses 13 Banks Of Operating A Derivative Trading Cartel Debt, how much of a threat to ordinary people is it? The truth might frighten you which is why bank bosses, government leaders and media pundits are not eager to tell the truth. What can we do? Not much in the short term, in the long term, reclaim the sovereignty of our nations and our individual sovereignty and tell the world view thinkers their crazy ideas have maxed out their credit.

Believe The Phoney Narrative Or Be Branded a Conspiracy Theorist.
Right now the west is in big trouble, the move led by Russia and China to dump the petrodollar as global currency has provoked the Americans to lead the wesern allies into an economic war that we cannot win. Why not? One word: debt. A shooting war is the only option but it's by no means certain the allies would win that.

America's GDP Surges 4% in Quarter 2 - Jonathan Creek Shows How The Trick Is Done
This morning the US Bureau of Economic Analysis, an agency of the Commerce department revealed Q2 GDP statistics which blew made nonesense of estimates, showing year on year growth for the second quarter at 4.0%. This was explained as the result of a surge in Inventories and Fixed Investment, while exports added only 1.23% to the GDP number. The full breakdown by component is shown below.

Foreign Exchange Market Rigging: Another Conspiracy Theory Exposed As Truth
The people who findly imagine themselves to be realists, rationalists and scientific thinkers have been yelling conspiracy theory for a long time now at those of us with the nous to work out what's really going on. well evidence is overrated because by the time it has come together the scam has been done and the perps (Goldman Sachs and the usual suspects) are away with the money.

Corporate Banker's $1.5 Quadrillion Conspiracy: EU Accuses 13 Banks Of Operating A Derivative Trading Cartel
Debt, how much of a threat to ordinary people is it? The truth might frighten you which is why bank bosses, government leaders and media pundits are not eager to tell the truth. What can we do? Not much in the short term, in the long term, reclaim the sovereignty of our nations and our individual sovereignty and tell the world view thinkers their crazy ideas have maxed out their credit. Was The Banks' Cypriot Smash And Grab A Rehersal
Washington Signals Fears Over Dollar
European sovereign debt crisis could cause Eurozone implosion – ex-BoE chief
Are government economists and mainstream media finally catching up with what The Daily Stirrer and Boggart Blog’s finance expert Phil T Looker has said since we started publishing? Former Bank of England chief Mervyn King has written an article warning that Eurozone deabt problems pose a bigger threat to the EU than a British OUT vote in the referendum

CEO Of World's Leading Shipping Company Delivers Downbeat Assessment Of Global Economy
While governments and mainstream media news continue to peddle a rosy picture of economic prospects, achieved by statistical jiggery pokery, money printing and they good old fashioned political ploy of telling blatant lies, the real economic indicators tell us this economic view is an illusion. Every month governments tell us the unemployment figure is down but do not tell us how many people have been eliminated from the figure

Baltic Dry Index Crashes. The Global Economy Is Coming To A Standstill
Since we reported in November that The Baltic Dry Index, published by London's Baltic Exchange, had hit record lows, this little known but very important trade index has continued falling. Which means there is not much stuff moving round the world, which means not much trade is getting done. Which means we're in trouble.

The Mysterious Case Of Dubai's Disappearing Gold
The story came to light when previously unknown Dubai gold trading house, Gold.AE suddenly announced it was going out of business. This news sparked wide interest in Gold AE and it was discovered the trader had been the middle man through which Turkish physical gold was moved "legally" to Dubai, from where it travelled on to Iran (after Dubai 'investors' had pocketed millions in fees and commissions, as payment for sanctions busting trades.

Why Iceland Recovery Is Being Ignored In Mainstream News
Iceland is a small country with less that half a million people so is not a good comparison with Britain. It's recovery from near bankruptcy in the wake of the 2008 financial crisis however is due to the rejection of politically correct, globalist politics so in that light it serves to illustrate that to suggest Britain (60 million people) cannot survive outside the EU is just globalist scaremongering.

Even The BIS Is Shocked At How Broken Markets Have Become.
If the Bank of International Settlements (BIS) the bank where banks and governments do business is worried about the state of the markets, we are in bigger trouble than anyone is letting on.

You’re not feeling the economic boom are you? Here’s why
Our government keeps talking about economic recovery, so does the Obama administration in the USA and the bureaucratic dictatorship of unelected penpushers in the European Union headquarters, Brussels. but in the perception of most people, things are not getting better, in fact they are getting worse. So where's this economic 'growth' they keep talking about. Well nothing is ever what is seems to be, all the economic growth is in prostitution, drug dealing, gun running and smuggling ...

Things That Make You Boggle ... Like The Misplaced Confidence Of Academics
Why are economics academics always so sure that their predictions are correct. Given the abysmal record on economists on calling the economic trends correctly even after they have happened let alone ahead of the trend, you would think exponsents of the dismal science would be a little more cautious in proclaiming their gusses as evidence backed facts. They never seen to learn however.

New Global Crisis Imminen, New Geneva Report Warns The Geneva Report refers to a “poisonous combination of high and rising global debt and slowing nominal GDP [gross domestic product], driven by both slowing real growth and falling inflation”. The total burden of world debt, private and public, has risen from 160 per cent of national income in 2001 to almost 200 per cent after the crisis struck in 2009 and 215 per cent in 2013. “Contrary to widely held beliefs, the world has not yet begun to delever and the global debt to GDP ratio is still growing, breaking new highs,” the report said.

[ Bankers rigged markets ] ... [ Banks new scandal ] ... [ Debt: feeding the monster ] ... [ The Fiscal Cliff ] ... [ Making Money From Nothing ]