These securities are complicated and technical. The cliff version is that they are bonds that convert to equity when banks need regulatory capital.
This weekend these were wiped out. CS equity was not wiped out and the bank will still pay bonuses.
Who the **** is going to hold a bond that is subordinate to equity? The SNB just blew this market up which will make the cost of regulatory capital even more expensive.
I have a scheme to exploit this but it is too complicated to explain on the interwebz.
Credit Suisse Bond-Wipeout Threatens $250 Billion Market
The deal would write down more than $17 billion of the bank’s riskiest bonds.www.wsj.com
"If only we had better regulations none of this would be happening."
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Is this showing UBS as having the same level exposure at CS?
Sent from my iPhone using the svtperformance.com mobile app
My opinion of the most significant event of the last year was the bond break from march to june 22 which put all this other crap into motion. I stand by that statement."Its not systemic"
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"It not even the most significant market event in the last year"
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This is what all the banks hold on their balance sheets. A chart that goes up is not good....
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The contagion is spreading from rate markets to credit markets. This will be the next leg. Banks are shoring up their balance sheet. The result is a tightening of credit. As credit tightens, defaults will pick up as corps have difficulty refinancing.
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My opinion of the most significant event of the last year was the bond break from march to june 22 which put all this other crap into motion. I stand by that statement.
If you fear a market tank why not just transfer an amount from equities into a cash equivalent within your 401k? Unless you really want to buy a hard asset of course.I’m going to pull 200k out of my wife and I’s 401Ks before markets tank. Where should we put them to profit in the mean time?
A lake house or cattle as mentioned by @Rb0891
Edit: i should clarify this with an /s
I’m going to pull 200k out of my wife and I’s 401Ks before markets tank. Where should we put them to profit in the mean time?
A lake house or cattle as mentioned by @Rb0891
Edit: i should clarify this with an /s