Friday, June 15, 2012

New Credit Crisis? What This Bank's Stock Is Telling Markets

New Credit Crisis? What This Bank's Stock Is Telling Markets
Published: Thursday, 14 Jun 2012

Shares of Credit Suisse fell below levels the multinational banking giant hit during the U.S. housing crisis, signaling an even deeper and broader credit crisis may be awaiting global markets, many investors said.

Credit Suisse [CS 17.97 -1.87 (-9.43%) ], the second-largest Swiss bank, with offices in 46 countries, plunged nearly 10 percent in U.S. trading Thursday to below the $18 level hit in 2008 and then again in 2009.

“Most market participants I talk to continue to underestimate the importance of the European banking system to global asset markets,” said Enis Taner, global macro editor at RiskReversal.com. “European bank balance sheets are more than twice the size of U.S. bank balance sheets and given that the current crisis in Europe is at its root a banking crisis, the situation is potentially more concerning than 2008.”

Credit Suisse was the outlier Thursday as the U.S. financial sector and theU.S. stock market [.SPX 1329.10 14.22 (+1.08%) ] gained ahead of crucial Greek elections this weekend.

The markets are anticipating a win by the pro-bailout party in Greece this Sunday and then an announcement in the near future of a bigger rescue plan for the euro [EUR=X 1.2628 0.0002 (+0.02%) ] with the full backing of Germany.

But Credit Suisse’s price action may be signaling that a solution to the crisis may not be as easy to come by, especially as the amount of debt in the region, and cost of that debt, rises.

The specific reason for Thursday’s plunge was a call by the Swiss central bank for Credit Suisse, which has 2 million private banking clients worldwide, to increase its capital position.

The central bank’s demand implies a capital shortage of about 11.5 billion Swiss francs ($12 billion) for Credit Suisse and and an eight billion Swiss franc ($8.4 billion) shortfall for UBS [UBS 11.73 0.14 (+1.21%) ], "which needs to be filled in the coming seven years,” wrote Dirk Becker, an analyst for Kepler Capital Markets, in a note to clients.

“The long deadline and the strong profitability of both banks should allow these capital gaps to be filled organically," Becker added, "but the SNB is getting nervous about the Euro crisis and the deepening recession and wants its banks to protect themselves against possible market dislocations.”

The Financial Select SPDR ETF [XLF 14.205 0.165 (+1.18%) ], which contains the biggest U.S. banking institutions, has more than doubled since its post-Lehman Brothers collapse low reached in early 2009.

While Credit Suisse is certainly more entwined in this nearby crisis, that doesn’t mean U.S. banks can stay immune if the global financial system locks up and raises the cost of funding for everyone, traders said.

“There is another huge leg down coming in the U.S. financials,” said Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital. “In fact, once U.S interest rates rise similar to what is happening in Europe, the fallout for the banks will be worse than 2008.”

—With reporting by Patricia Martell.

Source/Extract/Excerpts/来源/转贴/摘录: CNBC
Publish date: 14/06/12

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock