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Credit Suisse on the brink of insolvency? (BTC)

What's happening with Credit Suisse, and are they on the brink of bankruptcy? 👀

A thread (1/?)

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1. Quick recap:

Credit Suisse (CS) has been involved in several scandals

(Archegos, Greensill, Mozambique tuna bonds, Bulgarian money laundering, etc).‼️

All these losses have caught up to them, crashing their stock price, causing concern...📉



2. Current Situation

After several key management changes, CS is facing a few critical concerns:

- ATL share price - Spiking Credit Default Swaps (CDS) - Target Capital Ratio dangerously low


CreditSuisse BTC BTC

3. Potential solution

CS is planning to potentially divest its IBD division, while prioritizing and growing its profitable divisions to attract investors.

However, timing isn't great because their profitable divisions are starting to see decreasing valuations...👀‼️📉


4. Will they be insolvent?

No. Most tweets regarding a high CDS are exaggerated...

While a CDS beginning with '2' is relatively high, CDS doesn't exactly represent default risk.

The bigger concern is the credit spreads, which is making debt more expensive...‼️👀


5. Conclusion

While we're likely headed towards a recession, the likelihood of Credit Suisse's insolvency is low given their strong balance sheet.

Plus, in the black swan case that it happened, the Swiss govt would almost definitely bail them out.



If you found this thread informative, Likes & Retweets would be highly appreciated! ♥️

Happy to answer any questions you may have. ;)

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This post is based on this twitter thread.


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