"The SNB forced bailout for Credit Suisse has NOT solved any systemic CREDIT risk.
It just transferred risk from a terminally ill patient $CS to a patient that is in the ICU $UBS
This was largely an INTEREST RATE RISK event. It will morph into a CREDIT RISK event as the economy slows and credit reprices.
The banks are woefully undercapitalized for this one-two punch. We are just entering the first innings of the banking crisis imo, as depositors and bank shareholders realize that 20X leverage to equity capital base is very risky. But that’s banking…
Most bankers don’t have a handle on their true economic risk profiles. Forty years of declining interest rates have lead to horrible risk management practices. The capital destruction in bank stocks is due to a reversal in interest rates. Just wait until the credit contagion adds to these losses because credit quality of the loan book declines meaningfully.
Houston, we have a problem. The Fiat ponzi is built on sand.
#bitcoin ."
Greg Foss
