Credit Suisse Just Dropped 80%// Financial Crisis Started

Credit Suisse will need up to $9bn to prevent a collapse of the troubled Suisse bank. Its P/B value is now just 20 cents on the dollar!

Felix said the credit suisse swagger just went from bad to worse at tax fraud to the litany of complaints against credit swiss let me explain what that’s all about what does it mean is it a financial crisis to come or is it just a blip somewhere in a little swiss village well let me tell you all about it before we do that i want to encourage you to get your hands

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Department is investigating credit swiss for uh well helping people with um money laundering tax evasion type stuff the sort of thing that almost brought ubs to its knees some 10 years ago or so there is a whistle blower um which is always nice it’s an insider that they apparently continue to assist americans with concealing assets from the united states after

2014 which is when the swiss banks got you know slapped around quite significantly by the us um they’ve gone away with the lying to the united states says an attorney for the whistleblowers and um the bank denies it of course we’ve implemented extensive enhancements since 2014 to root out individuals who seek to conceal assets our clear policies to under close

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Undercloud accounts it doesn’t mean they haven’t got some that slip the net or some big ones that slipped in that somewhat knowingly so they are basically um every scandal that has been around in the last 12 months they’re a part of from tuna to archegos from everything else and um there is also a trial going on around um fx um conspiracies essentially which

Is going on literally today which is all sorry school it’s the main one there so they might need about nine billion swiss francs or dollars approximately in the next two to three years now this bank has a market cap of 11 billion uh raising 9 billion when you are worth 11 is a bit of a challenge uh shareholders are unlikely to swallow an 80 dilution so they’re

Continuing to sell the family silver uh hopefully their structured product unit um demand oriental in in zurich um and they’re hoping that they’re going to somehow survive or get some sort of bailout the us government sent them about 3.1 billion dollars two days ago um at least in my view uh somebody in switzerland urgently requested 3.1 billion dollars the swiss

Central bank didn’t have it i’m not making this up it’s all documented uh look at my twitter and um who could that be who in switzerland nobody all year along in switzerland has cried for that amount of dollars or any amount of dollars so it’s a bit bit staggering really but also of course it’s staggering before we look at some more details and credit twists is

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We’ve got students on all of those levels uh go to coaching and book a call with us have a chat how we get you there and um moving on swiftly credit suisse’s default protection costs is up here right that’s where it is um deutsche bank is also a little bit in trouble but it’s down there barclays is down there so insane difference right five

Times markets are shorting credit swiss that’s what happens you know the cockroaches come out and they’re short i mean can’t really blame them they want to make money uh so the shorter free float is is now up here at uh about seven percent you might say that’s not very high i i’m invested in all sorts of arc funds which i you know shorted at 20 or whatever but

They’re for a bank this is pretty staggering stuff and the share price in blue here continuing to to drop this is also quite important if you’re a trader you will appreciate that bid ask spreads are important so there’s somebody bidding there’s somebody asking the gap in a liquid market that functions well as a couple of cents in a non-liquid market that spread

Gets very very very wide and that’s exactly what’s happening here so the spread is almost two which is insane and this is on a bond so it means liquidity has dried up nobody wants to touch the stuff the people who have it want to sell it the people who want to buy it don’t want to pay much for it and they’re not coming to any kind of of meeting here no exchanges

Going on off that and um look at this this sums up what the market thinks of credit suisse price to book ratio on credit suisse is just over 0.2 0.2 this is a bank why wouldn’t the price to book value ratio be at about one at least right you’d think that what they have on their books is worth what it says on the books we think there is an 80 haircut coming 80

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Percent and deutsche bank’s the same by the way um which is about the same size in terms of market cap now much much bigger credit derivative exposure uh than than credit suisse so a bigger problem so what’s going to happen here well either we’re going to find some sort of shining knight in a in a in a caftan or something he’s going to bail them out with some oil

Money or something or governments are going to step in and when governments step in what happens it’s stimulus yeah it’s stimulus it’s inflationary as well so if you go back to the same idiocy we’ve been on since 2008 and apparently we’re going to solve by bailing ourselves out again and again and again much like the brits are doing with quantitative easing that’s

What they back back to yup governments buying bonds quantitative easing uh yellen said yesterday that they are studying the u.s bond market why because liquidity is starting to dry up why because the biggest buyers of u.s treasuries are the fed they’re not buying they’re selling the chinese they’re not buying the japanese can’t afford to buy because of the crazy

Currency exchange they can’t afford to hedge and therefore no one’s buying liquidity dries up what happens things happen look at the uk so more quantity easing to come entirely possible that we could do get bailed at some point but for now macro dominates everything you saw the inflation numbers today uh pretty staggering stuff so we continue to be on our bearish

Sentiment what does that mean great time to buy stocks great time to trade great time to make money all the volatility volatility is definitely there check it out give us a call felix friends coaching i appreciate you watching i appreciate you tuning in thank you very much see you on the next one

Transcribed from video
Credit Suisse Just Dropped 80%// Financial Crisis Started By Felix \u0026 Friends