My post of November 4, 2011 contained a list of
29 banks that were deemed "Too Big To Fail" by the
Financial Stability Board of the G20.
One of those banks was Switzerland's Credit Suisse Bank (CS). Another was Germany's Deutsche Bank (DB).
I last wrote about both of these banks in my post of October 3, 2022.
Their movements were identical from September 2001, and both were trading at or near their lifetimes lows...just above zero. They had never recovered from the fall from their lifetimes highs set in April 2007...right before the 2008/09 financial crisis.
My article contained a lot of information detailing their weaknesses, which were reflective of their credit risk in the face of an impending global recession.
Today, Credit Suisse is back in the news, as it has made a new lifetime low of 1.78, so far, today. Deutsche Bank also gapped down to a low of 10.06, thus far. Sellers are still firmly in control of CS, and have been for most of the time since its high of 73.01 made in April 2007, as shown on the following monthly comparison chart.
U.S. and European markets are down considerably today, on this news.
(World Markets at 2:15 pm ET)
The following ZeroHedge articles detail the issues facing, not only Credit Suisse, but "the entire European banking sector (stock and credit) [which] is cratering," at the moment.
ZeroHedge excerpt
ZeroHedge excerpt
ZeroHedge excerpt
ZeroHedge excerpt
So, will we see a bank bailout from the Swiss National Bank (Swiss Central Bank), or other entity...for CS and any other distressed European banks?
By the way, regardless of whether CS is bailed out, there's a reason why it's plunged to almost zero in value...and, I doubt whether throwing more money at it will change its trajectory, or merit, as a viable and trustworthy bank, in the long term.
Will that contagion spread to American banks, some of which are already collapsing, as detailed in my last post?
Why is reckless behaviour by bank executives continuously rewarded with bailouts by Central Bankers and governments around the world, at the expense of taxpayers...with no consequences?
N.B. On a related note, I compared the charts and price action of Germany's DAX with the EUFN (Europe's MSCI Financials ETF) several times last year, here (March 7, 2022) and here (July 16, 2022).
I warned of a strong divergence between the DAX and the EUFN in my March 7 post. I noted that, while the DAX had been in a long-term uptrend, the EUFN had been in a volatile and whippy general downtrend. It was a warning of weakness for the DAX (and the EUFN, as well as other European indices). Both plunged a great deal from then, until they bottomed in October, as shown on the following monthly comparison chart.
They've both rallied since then, but have come to a screeching halt and have reversed course this month. In fact, the EUFN has plummeted far worse than the DAX, so far. The Sellers are firmly in charge of EUFN.
If the EUFN continues to outpace the DAX on further downside movement, it's a signal that the DAX may follow soon, thereafter...both worth monitoring over the coming weeks and months, in addition to CS and DB.
* UPDATE March 18...
A takeover deal may be imminent, whereby UBS Group AG (UBS) acquires all or part of Credit Suisse...we'll see what happens...
Price action on the following monthly chart of UBS depicts the fact that this investment bank has never recovered from the negative fallout of the 2008/09 Financial Crisis.
It's been trading in a sideways range between 10.00 and 23.00, since it bottomed in March of 2009..quite the switch from its record high of 66.26 set in April 2007.
The Balance of Power is currently in the hands of Sellers.
A break and hold above 23.00 could inspire confidence in this bank, if it did acquire CS, and entice new shareholders to place their bets accordingly.
However a break and hold below 10.00 could see this bank enter crisis territory and flop, as well.
One to watch over the coming days/weeks.
* UPDATE March 19...
The following ZeroHedge article provides further updates on the negotiations between UBS and CS...it seems a deal has been reached.
If the Swiss National Bank is prepared to assist in this acquisition with a sizeable monetary contribution, this must be a very dire situation, indeed!
Will this end in a nationalization of banks in Switzerland -- and, perhaps in other countries -- at some point...and end capitalism, as we know it?
* UPDATE March 20...
Swiss (and European) bond holders are not happy with the deal involving CS, UBS and the Swiss National Bank...
Swiss and European banks look weak, as shown on the monthly comparison chart of CS, UBS, DB and EUFN (European Financial ETF).
In fact, keep an eye on DB for signs of further weakness, as it struggles with problems associated with its CDS (credit-default swaps)...
