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Monday, October 03, 2022

CS & DB: Have You Ever Seen A More Perfect Union Of Banks On The Road To Zero?

* See UPDATES below...

The following monthly comparison chart illustrates the lock-step movements of Credit Suisse (CS) and Deutsche Bank (DB) since September 2001. 

Neither one recovered from the fall from their lifetime highs set in April 2007...right before the 2008/09 financial crisis.

They're both trading at or near their lifetime lows...just above zero.

No matter what pundits and bank executives say, and notwithstanding the fact that they were on the List of 29 Banks Deemed 'Too Big To Fail' by the G20 Financial Stability Board (published in November 2011), exactly how solvent are these banks, since charts don't lie?

Perhaps they funded one-too-many ESG company, or Bitcoin...the top 100 ESG companies are listed here.

The following monthly chart compares the Swiss Franc (CHF/USD) with the Euro (EUR/USD).

With some minor variations since October 1989, these currencies have traded in similar trajectories, as well. The Euro has experienced much more volatility and wild swings, while swings in the Franc have been tighter and more muted.

We'll see if the divergence of the lower monthly swing high set in the Euro in December 2020, versus the higher swing high of the Franc (leading to the sharp decline of the Euro below parity with the USD and to a lower swing low), will, eventually, drag the Swiss Franc below parity and a new swing low, as well.

Such a scenario [a CHF plunge to a new swing low (below its large sideways trading range) and hold below USD parity] could spell the downfall of Credit Suisse and, potentially, Deutsche Bank.

The following ZeroHedge article offers some insights relative to problems at Credit Suisse.

ZeroHedge excerpt

* UPDATE Oct. 5...

So, has CS bottomed? We'll see what happens. 

Either way, their chart is portraying severe weakness...presumably reflecting credit risk, which is not something that should be ignored in the face of an impending global recession.

* UPDATE Oct. 14...

So, this latest news is interesting...

ZeroHedge excerpt

ZeroHedge excerpt

Keep an eye on CHF/USD and on CS for developments.

At the moment, they are both down on the day, while CHF/USD is down on the month and CS is slightly off its October low.

BUT...no Fed panic...yet...

* UPDATE Nov. 23...

So far, the cash exodus from Credit Suisse in Q4 has been massive and historic...with no end in sight.

ZeroHedge excerpt

Its stock, CS, has plunged, once again, to 3.83 this morning, retesting September's low, with virtually no support below, except last month's record low of 3.70.