The End of Credit Suisse

Credit Suisse going down is so sad, it's the largest washing machine in the world

Fantastic video, Bagel. I found your message to be thorough and well-balanced as a seasoned Swiss banker who currently resides in Switzerland. I also understood the underlying justification for why AT1 bond investors could be treated worse than equity holders. I didn't spend the time to thoroughly analyze the question because I don't invest in these kinds of instruments, but you answered a crucial legal query for me. I'm grateful.

The Plain Bagle and Patrick Boyle are the best financial news channels hands down :)

Not a Credit Suisse customer, but I do live in Switzerland and have many friends with CS accounts and/or who have worked there. A lot of people were scared about their deposits and were in lines to get their money out yesterday. Also one friend who worked at Credit Suisse for almost 20 years said he's not surprised in the slightest because literally every 18 months while working there, they had some kind of major restructuring or shake up in management and organization. The internal incentives towards their investment banking business were very rewarding towards big risk taking, with great access to borrow from or against other parts of the business to make big bets with very little consequences for when things went bad. Overall a horrible way to run a business.

Sounds like this is what Buffett was referring to with “Only when the tide goes out do you learn who has been swimming naked.”

Credit Suisse was one of the worst-managed major banks in the world. As someone who works in consulting, I can tell you 90% of my colleagues would be ready to bet CS would be the first major bank to fail in the coming years due to mismanagement and shady practices.

Also, keep in mind - EU is MUCH better/stricter at regulating banks and corporations (and even though Switzerland is not a member of the EU, its corporations in most cases need to follow the EU regulations to operate on its market). If this happened in the US, CS would simply lobby away its demise for another few years and drag many more investors/customers down with itself.

I hope no one in the the CS top management got hurt and they will get their bonuses and golden parachutes for their outstanding performance :)

I'm not surprised by what happened to CS. I worked for them and left almost two years ago. They were a hot mess then and things obviously got much worse since I left. I'm glad I got out when I did.

Your words tell me I should stay calm. Your expressions tell me I should panic.

Dude I legit almost fell off my couch laughing when you said the WWE Smackdown line and cut to the clip. You are the best Richard. Please never stop slipping in those nuggets

Credit Suisse had such a great run before 08, it feels like every management ever since try to either get back to historical high earning and/or ''turn the tide'' by doing stupid risky stuff, fall further, then do more risky stuff.

Matt Levine wrote an entire piece about how the AT1 are considered equity from a regulatory perspective and were intended to be wiped out before stockholders. It seems like most investors did not read the fine print on those contracts (not even CS).

I'll be honest, my whole life I thought it was Credit Susie. I've never heard anyone say it out loud until now.

I love hearing different takes on this by financial channels.

Feeling worried about Credit Suisse being bought out is a bit like feeling bad that Lex Luthor lost all of his money due to overspending on anti-Superman weaponry and losing the faith and investments of his fellow supervillains.

Honestly? Good.

"You won't have Credit Suisse to kick around anymore".

This is why I'm subscribed to this channel. Thank you for explaining this well. Kudos!

When I moved here, I just looked at availability of branches and ATMs - as a grad student, it's not like I have lots of money to worry about. And so I picked Credit Suisse, and have watched it be in the news with my palm planted to my face ever since.

Problem is, the markets are never really rationale when they panic! If the reasons behind the fall of these large banks are their own mismanagement and scandals and all just happen to occur at the same time, its attributed to the banking sector as a whole! Hope this comes to an end soon.

Bagel is trying to paint the situation as if the scandals and dubious practices are what brought down Credit Suisse, but failed to mention that the bank only got into trouble when they loss tonnes of their rich investor's money from bad investments. Shady activities don't matter if investors are making money, as evidenced by so many financial institutions.