Credit Sus af
106: What is going on with Credit Suisse?
Monday Recap
Disclaimer - Apparently other newsletters are using the credit sus moniker - we weren’t aware and made the graphic/merch yesterday.
Yesterday was one of those days that you genuinely couldn’t follow everything if you wanted to.
There was a point in time where most people saw the “not financial advice” warning and got real tired of it or thought it was a joke.
But now those warnings make a little bit more sense.
The SEC dragged his sack on some foreheads this morning by charging Kim Kardashian, forcing her to pay $1.25M to settle SEC charges for failing to disclose a payment she received for shilling a crypto asset on Instagram.
This is yet another instance of celebrities getting caught up in the crypto bull market and not understanding the impact of their endorsements and blind recommendations. One also has to wonder if Gensler is pissed he never got an invite for a sex tape.
Last June Kardashian shamelessly pawned Ethereum Max to her over 250 Million followers saying, “ARE YOU INTO CRYPTO??? THIS IS NOT FINANCIAL ADVICE BUT SHARING WHAT MY FRIENDS JUST TOLD ME ABOUT THE ETHEREUM MAX TOKEN."
Gensler will be on CNBC this evening to talk about the bust lmao. And for the record can I just say how elite Twitter is for current events and breaking news. Gotta get that out there. When have you been able to see some SEC chair’s tweets before?
If you aren’t using twitter to get ahead on market sentiment and breaking updates you aren’t trying hard enough. Just for updates though, sucks otherwise.
In a surprisingly bullish twist for the day the UN is calling for central banks and the Fed to stop hiking interest rates or it will lead to a global recession.
Sounds like these guys either have some super underwater long positions or they know that we’re already f*cked and want to be on everyone’s good side when that’s exactly what eventually plays out.
All indices ended up well into the green and equity investors got a chance to catch their breath before potentially more red to come in October.
Elon Musk has enraged social media goers, Ukrainians, and others with his rant today on Twitter. After a rant about the progress and status of the conflict in Ukraine, Elon decided to speak about Nuclear War.
Let’s talk about the rumors surrounding Credit Suisse. The bank has gone through some challenging issues over the last several years and the stock price is down nearly 6-% in the last year with no send of the selling in sight. Activity and pricing on Credit Default Swaps on the bank are soaring in prices not seen since 2008.
We’ll share our view on how credible this threat really is to the market, but it begs the question….
How long until similar firms start to have issues and pressure build up?
Rumors swirled through markets Friday and Monday about large liquidity and financial health issues for Credit Suisse rooted from a memo that was sent out and Credit Default Swap prices that have surged considerably in the last week alongside a dismal stock price - down about 60% in the last year and marred by a number of scandals, losses, and messy ventures.
Rumors have since emerged of troubles at Suntrust Humphrey and UBS as well though they aren’t verified.
Credit Suisse, with a new CEO at the helm, has some leaks to plug if they want the ship to stay afloat.
Right now all three of the major credit ratings agencies including Moody's, S&P and Fitch present a negative outlook on Credit Suisse - but is this really similar to a Lehman moment as most are saying in the media and online?
Quick reminder since we’ve added a high number of subscribers in the last week and people are asking about the cadence of our content….
We typically do 1 paid post per week and another post Friday for all subscribers. We have upped the cadence of our publications for paid subs to an extra one per week for 2 total given recent market volatility and geo political tension. We’ve kept pricing low so everyone can benefit but it’s simply a matter of how much input and time goes into the deeper ones.
We’ve received feedback that the subscription pays for itself over and over again due to the straightforward explanations, commentary, and focus pieces we do.
The goal is to make everyone sharper, up to speed faster, and more knowledgable about a wider range of areas. I’m not an expert - Arb Letter is a raw straightforward synthesis of information and context so you can understand what’s actually happening in the world and markets.
Most of our new subscribers choose to go paid for full archives, premium posts, interviews, and exclusive content/commentary. We’ll continue to do our free overview Fridays but much of our new free time and effort will go into continuing to grow the paid version to improve content, topics covered, cadence, and contributors. Want to stay transparent about our plans for this endeavor and where the most value will be found moving forward.
So what is going on with Credit Suisse?
Alright Credit Suisse, Lehman Brothers, size lord Deutsche Bank Traders, and Credit Default Swaps. Let’s get it.