Interest rates are bringing a knife to a gun fight. The impact of interest rates on the money supply is indirect. The impact of additional taxation is direct. As long as we are running gigantic fiscal deficits interest rates will continue to be the effect of shooting spit wads at a bowling ball to make it stop.
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100%, we need a fiscal response here, not just a monetary response.
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Is that read top to bottom then left to right?
Euro banks tanking today, led by Credit Suisse
Chain reaction has started in Europe.
We have been tracking this all morning.
Credit Suisse is ripe for a takeover now. They are treading water from a regulatory standpoint as losing their wealthy clients had materially weakened them capital-wise.
There is way too much debt in the economy. I donāt see how they can keep raising rates further now. We are not talking about idiosyncratic risks anymore, these are systemic.
I will save the world by buying more emmenthaler
Credit Suisse is a globally systemic important Bank.
This is serious.
But they also have a nuclear option. If the viability of the bank is threatened they can trigger about 40bn of Tier 1 and Tier 2 capital to shore up the balance sheet.
That means investors lose their shirts. But thats life.
so uhā¦you gonna buy the dip?
Not me. I kind of need the cash to pay off my piano just in case I get fired.
The next big recession hasnāt really been playing out like I thought it would. I saw it as being more similar to the tech bubble whereby a bunch of phony companies would go bankrupt and software engineers would face a winter but big banks? Didnāt think so.
I am staying far away from bank stocks right now.
We have no way to know how much the contagion has spread.
Plus Credit Suisse has huge credibility problems already. Its too much of a high-risk punt.
Whelp, work day started. Iām going to check in on how my colleagues across the pond are feeling.
look at credit suisseās all time stock time series.
That shit has never been profitable from a shareholder perspective.
to the moon or no go
By buying the dip, I meant ranch dressing to go with the emmenthaler.
Actually, thatās disgusting. Wouldnāt do that either.
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Gonna check the news. Iām expecting lots of stock Getty images of blue jacket men face-palming themselves.
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selfie?
Get some roast beef or sliced prime rib, add that emmanthaler, make a sandwich. Then get a nice jus going, thatās the dip you want.
Must be serious as Credit Suisse has scrapped bonuses for executives.
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Its worse than that now.
Credit Suisse has asked the Swiss Central Bank to intervene.
Circling the drain at this point.
Credit Suisse has had issues for years so this is not surprising.
I expect a bit of a flight to quality for investors in the banking sector. The big Canadian banks have not been severely affected price wise so far and they weathered the 2008 crisis relatively well because they were well-capitalized and well run. Hoping for similar outcome this time because of my personal
Investments in them!
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