More than a decade has passed since the 2007-2008 financial crisis when Lehman Brothers, the fourth largest investment bank in the United States, collapsed and declared bankruptcy. Nearly 14 years later, Credit Suisse and Deutsche Bank, two of the largest banks in the world, are suffering from distressed valuations and banks’ credit default insurance levels are approaching levels not seen since 2008.
Credit Suisse and Deutsche Bank valuations bombarded – investors discuss systemic risks to global economy
During the first week of October, the global economy continued to look bleak as energy and gas prices hit record levels, inflation in many countries is the highest in 40 years, supply chains are fractured, stock markets have plummeted, and tensions have risen between the West and Russia.
Amidst this poor economy, two of the biggest investment banks are floundering from distressed valuations. Market data shows that Credit Suisse Group AG (NYSE: CS) and Deutsche Bank AG (NYSE: DB) are trading at extremely low values not seen since the 2008 financial crisis.
At the end of August, Deutsche Bank analyzed the problems associated with Credit Suisse, and the bank’s analysts pointed to a $4.1 billion gap that must be filled in order to combat the financial institution’s financial well-being. Moreover, Credit Suisse’s credit default insurance levels are similar to the same levels of credit default swaps that Lehman Brothers had before the bank went bankrupt.
Ulrich Koerner, CEO of Credit Suisse recently explained that his company is facing a “critical moment” and stressed that the Swiss-based financial institution has a “strong capital base and liquidity position”.
Major investor says Credit Suisse’s credit swaps are trading like a ‘Lehman moment’
Not everyone agrees with Koerner as a report from Investing.com states that “a large investor dealing with Credit Suisse says the investment bank is a disaster, [and] CDS credit swaps are traded like the “Lehman moment” [is] on the cusp of a hit.” However, Managing Partner of Compcircle Gurmeet Chadha does not believe there is a major market anomaly that will reveal itself.
“Since 2008, once a year Credit Suisse [and] Once in [two] Deutsche Bank years on the verge of default, ‘Shatha chirp. “In every patch — this speculation begins to emerge. In my little experience — a black swan event never announces itself.”
Credit Suisse analysts downgrade their stock to a sell rating pic.twitter.com/SghqtoFnhS
– Dr. Barik Patel, BA, Chartered Financial Analyst, ACCA. (ParikPatelCFA) October 2, 2022
Fragmentation comment did not put an end to the speculation surrounding the two banks and many believe that disaster is imminent. Twitter account “Wall Street Silver” Tell 320,000 followers.
“The collapse in Credit Suisse’s share price is very worrying,” Wall Street Silver said. “From $14.90 in February 2021, to $3.90 currently. With P/B = 0.22, markets are saying they are insolvent and possibly insolvent.”
Credit Suisse, the four main numbers:
160 b cash
400b upon request
900b Leverage Exposure
40b Equity– Charlie Munger fans (@CharlieMunger00) October 1, 2022
A situation analysis published in Search Alpha notes that both Credit Suisse and Deutsche Bank are trading at distressed valuations and further says that Credit Suisse “will have to go through a painful restructuring”. The author of Search for Alpha writes that “[Credit Suisse] Traded at 0.23x tangible book [and] Deutsche Bank is trading at 0.3x tangible book value.” However, the author of Research Alpha says Deutsche Bank is operating through the storm by taking advantage of interest rates. The author adds
Investors should avoid [Credit Suisse] and buy [Deutsche Bank].
Investors believe that the two financial giants are facing a major crisis and do not believe the statements made by the CEO of Credit Suisse. Some have criticized the process of checking banks because they believe that Credit Suisse and Deutsche Bank as well Until their necks are in debt Bad loans.
“Tell me the true number of bad loans owed on Credit Suisse to hedge funds and family offices like Archegos,” Wallstformainst CEO Jason Burack chirp in August. “Because anyone who fully trusts their accounts also believes in unicorns and the tooth fairy.” At the time of writing, “Credit Suisse” is a very good term popular vertical direction On Twitter Sunday morning (Eastern time) with 46,000 tweets.
What do you think of the financial issues surrounding Deutsche Bank and Credit Suisse? Tell us what you think about it in the comments section below.
photo credits: Shutterstock, Pixabay, Wiki Commons, Editorial Image Credits: Natalie Rench and Rostislav Agave
disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the Company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
from San Jose News Bulletin https://sjnewsbulletin.com/trading-like-a-lehman-moment-credit-suisse-deutsche-bank-suffers-from-troubled-valuations-as-banks-default-credit-insurance-close-to-2008-levels-bitcoin-economics-news/
No comments:
Post a Comment