Credit Suisse puts Zurich hotel up for sale in urgent liquidity dash
- Thread starter The_Krakenite
- Start date
I had been debating on the 'Buy the Dip'... however, all the alarm bells are ringing on this one. I'll never forget seeing this same shit-show happen with Bear Stearns... same thing. And pretty much everyone who listened to Cramer and bought the falling knives in the same scenario ended up losing the farm.
I think there are better rewards for this kind of risk... But power to those who want to load up and pray.
I think there are better rewards for this kind of risk... But power to those who want to load up and pray.
Last edited:
Well, forget about Cramer. He's only a parrot that spits out what is fed to him by the higher up.
There's so much similarity between Lehman Brothers and Credit Suisse, you can't make this stuff up.
How Lehman's Executives Lied About Their Assets To Fool Everyone About Their Financial Health
The health of Lehman's balance sheet was such an important question in 2008 that the bank went out of its way to claim multiple times that it was reducing the size of its balance sheet. Let's start with the earnings call in June 2008.
"Regarding our balance sheet, we reduced our gross assets by $147 billion over the quarter, which exceeded the targets that we set," chief executive Dick Fuld said at the start of the June 16th conference call in 2008.
"Turning now to leverage, we reduced our gross assets by $147 billion -- from $786 billion to $639 billion -- in the second quarter and we reduced net assets by $70 billion -- from $397 billion to $327 billion. As a result, we reduced our gross leverage from 31.7X times to 24.3X at May 31, and we reduced net leverage from 15.4X to 12X prior to the impact of last week's capital raise," chief financial officer Ian Lowitt said on the same call.
Thanks to the bankruptcy examiner's report, we now know this was not true. Lehman's deleveraging was largely an accounting fiction. Fifty billion of it's supposedly $70 billion reduction in assets was produced entirely through the Repo 105 transactions.
The importance of this deception cannot be overstated. Their should be no doubt in anyone's mind that the amount of leverage and the size of the balance sheet was pretty much all that mattered at the time. The catch phrase at the time was "Earnings are the past. The balance sheet is the future." The extra details the firm was offering on that June conference call were meant to reassure everyone about the health of the balance sheet.
On that same call, the third question came from Merrill's Guy Moszkowski.
Guy Moszkowski, Merrill Lynch
Just a follow-up on the question about the asset sales and whether there were vintage concentrations or anything like that. How about with respect to timing? Were the sales pretty much ratably spread over the quarter, or were they more skewed toward either the earlier or the latter part of the quarter?
Ian T. Lowitt, Chief Financial Officer
They were spread over the whole quarter. I mean, it was a focus of the entire firm to de-lever through the course of the quarter. That was obviously a focus which shifted attention, to some extent, and I think that impacted the quarter in some ways. But it was even across the whole quarter so there was no concentration in terms of the timing. That was true across all of the elements, so that would be true within residential as within commercial.
This wasn't true at all. In fact, according to the bankruptcy examiner's report, $50 billion in alleged "sales" were actually repos timed to reduce the balance sheet for exactly the period necessary for earnings reporting.
Source: https://www.businessinsider.com/how...-everyone-about-their-financial-health-2010-3
There's so much similarity between Lehman Brothers and Credit Suisse, you can't make this stuff up.
How Lehman's Executives Lied About Their Assets To Fool Everyone About Their Financial Health
The health of Lehman's balance sheet was such an important question in 2008 that the bank went out of its way to claim multiple times that it was reducing the size of its balance sheet. Let's start with the earnings call in June 2008.
"Regarding our balance sheet, we reduced our gross assets by $147 billion over the quarter, which exceeded the targets that we set," chief executive Dick Fuld said at the start of the June 16th conference call in 2008.
"Turning now to leverage, we reduced our gross assets by $147 billion -- from $786 billion to $639 billion -- in the second quarter and we reduced net assets by $70 billion -- from $397 billion to $327 billion. As a result, we reduced our gross leverage from 31.7X times to 24.3X at May 31, and we reduced net leverage from 15.4X to 12X prior to the impact of last week's capital raise," chief financial officer Ian Lowitt said on the same call.
Thanks to the bankruptcy examiner's report, we now know this was not true. Lehman's deleveraging was largely an accounting fiction. Fifty billion of it's supposedly $70 billion reduction in assets was produced entirely through the Repo 105 transactions.
The importance of this deception cannot be overstated. Their should be no doubt in anyone's mind that the amount of leverage and the size of the balance sheet was pretty much all that mattered at the time. The catch phrase at the time was "Earnings are the past. The balance sheet is the future." The extra details the firm was offering on that June conference call were meant to reassure everyone about the health of the balance sheet.
On that same call, the third question came from Merrill's Guy Moszkowski.
Guy Moszkowski, Merrill Lynch
Just a follow-up on the question about the asset sales and whether there were vintage concentrations or anything like that. How about with respect to timing? Were the sales pretty much ratably spread over the quarter, or were they more skewed toward either the earlier or the latter part of the quarter?
Ian T. Lowitt, Chief Financial Officer
They were spread over the whole quarter. I mean, it was a focus of the entire firm to de-lever through the course of the quarter. That was obviously a focus which shifted attention, to some extent, and I think that impacted the quarter in some ways. But it was even across the whole quarter so there was no concentration in terms of the timing. That was true across all of the elements, so that would be true within residential as within commercial.
This wasn't true at all. In fact, according to the bankruptcy examiner's report, $50 billion in alleged "sales" were actually repos timed to reduce the balance sheet for exactly the period necessary for earnings reporting.
Source: https://www.businessinsider.com/how...-everyone-about-their-financial-health-2010-3
%%
NOT sure he was dumb enough to recommend a farm size position ;
but i remember his '' BAC going to $60 in a heart beat'' LOL= Never happened, but funny in hindsight.
Some people pray before they do stupid stuff or stupid risk;
actually i took risk in college age i would never do now.
CS stock closed below $5 SEPT \that says the polar bears are right to slam it+ no telling how many longs got out before $5
If I were you, I wouldn't mind buying the dip. This liquidity problem that CSFB has should be temporary and it's just the result of this one deal gone bad but the company overall is solid. And it looks like this one deal is just confined to this one division and doesn't really affect the rest of the division and business segments of the company so once this s*** blows over, CSFB should be able to get back on its feet and continue to be profitable. I personally know somebody who worked at CSFB. It's a great company to work for, strong solid quants, innovative software engineers, and very talented traders there. But that was years ago, I dunno about now.
I would stay the bleep away from European banks.
I looked into things about a year ago and the five biggest banks in Europe were all trading at less than 1 for their price to book ratio.
IMO, that means no one believes the audited financial statements.
How can one sanely invest in that environment?
Do you really want to buy into the next Wirecard? Look at how badly that one was handled. The auditors acted like amateurish clowns and the regulator was more interested in going after those exposing the fraud, than properly investigating and punishing the criminals.
https://www.credit-suisse.com/media...csg-special-committee-bod-report-archegos.pdf
I didn't make it through all 172 pages of this report, but I think if you read the first 10 you won't want to give them your money.
I looked into things about a year ago and the five biggest banks in Europe were all trading at less than 1 for their price to book ratio.
IMO, that means no one believes the audited financial statements.
How can one sanely invest in that environment?
Do you really want to buy into the next Wirecard? Look at how badly that one was handled. The auditors acted like amateurish clowns and the regulator was more interested in going after those exposing the fraud, than properly investigating and punishing the criminals.
https://www.credit-suisse.com/media...csg-special-committee-bod-report-archegos.pdf
I didn't make it through all 172 pages of this report, but I think if you read the first 10 you won't want to give them your money.
%%
Looks like all the market disagrees;
maybe if they own some RE, stock maybe worth pennies.
$5= penny stock.
Sorry for >50,000 men + women that work there..................................
As said, history doesn't exactly repeat, but it sure rhymes...
Where is Roaring Kitty when you need him? All it takes is one squeeze and all the shorts are gone.
%%
Sometimes true\ but\
if it cant clear $5.00, looks like the kittys, lions\ bull elephants are going to stomp the stock into the ground??
