저자: MeetKevin · 외국인
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크레디트스위스가 리먼 브라더스 같은 위기 신호로 거론되지만, 재무제표상 문제는 시스템 위기보다 경영 부실에 가깝다는 주장. 증권 부문 매출 34%, 투자은행 매출 40% 감소에도 일반관리비 43% 등 비용이 늘었고, 분기 손실 1.8조, 현금성 자산 약 2.6억 스위스프랑 수준 등을 근거로 제시. 자금 유출과 금리 인상이 부실을 드러냈다고 해석하며, 감원 등 구조조정 필요성을 언급. 다만 일부 해석은 과장되었다고 봄.
다듬은 글
September 15 2008 is the day Lehman Brothers went bankrupt it was not deemed too big to fail and instead it failed and contributed to the implosion of financial markets that deepened the recession of 2008 and ended up leading to the great financial crisis as the mortgage Market melted down today comparisons are being made that a company called Credit Suisse or Credit Suisse or Swiss bank so depending on how you want to call them is potentially at a Lehman Brothers moment that this Bank potentially with many more assets under management than Lehman Brothers at the time in 2008 could potentially go bankrupt and if it goes bankrupt it could be even more impactful than the bankruptcy of Lehman Brothers so if you remember people leaving their offices with boxes because their company went bankrupt in Manhattan that might happen again so let's go through some of the madness that people are expecting regarding Credit Suisse and this potential Lehman Brothers moment this is a bank by the way that for years if not potentially decades has been involved in scandals and potentially misleading their clients their wealth management clients their investors about the safety of particular products they were investing in especially Bond portfolios which have absolutely been obliterated in recent months that's because most spawn portfolios are down 40 and some Bond portfolios are down 50 to 80 percent and Credit Suisse is really no exception here the problem is we have a bunch of compounding issues at Credit Suisse that could actually lead to not only the substantial reduction and valuation of the company and share price but the potential ultimate bankruptcy a lot of it's is being compared to the scandals that Deutsche Bank went through in 2016 especially since just last year Credit Suisse took one of the largest losses from the implosion of arcago's Capital Management when Bill Huang basically 20x leveraged his hedge funds portfolio and ended up losing all of it potentially leveraging up to 160 billion dollars and Credit Suisse taking some of the largest losses from that disaster so what do we know about Credit Suisse and how is Credit Suisse different from Lehman Brothers well that is what we're going to start with then we'll move into what's potentially happening within the internal structure of Credit Suisse and what could come out of that and why is all of this becoming a problem now in the first place we'll go through everything first let's compare Credit Suisse to Lehman Brothers one thing that's important to remember is that Lehman red this is probably the most important aspect is Lehman Brothers had over 600 billion dollars worth of credit default swaps and even though that sounds really fancy the way I want you to think about that is if you have one dollar of real estate think about a credit default swap as representing about ten dollars of real estate so if your one dollar doubles you double ten dollars instead of having an extra one dollar you would actually have an extra ten dollars that's the power of Leverage via a credit default swap which is a derivative think about it kind of like trading weekly call options okay for those of you option Traders or think about it like going to the roulette table and picking a number all right so that's a credit default stop it works great when you're winning and you're hitting the right number it works really poorly when things are collapsing and that's what happened with the great financial crisis is the real estate market the underlying fundamentals of the real estate market collapsed that's because people had been buying homes with no income no job no assets known as in ninja loans people were coaxed into short-term variable rate loans that started with interest rates at negative percent rates or potentially zero percent taser rates that adjusted within six months to Market rates which were like five or six percent uh and and many people couldn't afford their payments they couldn't refinance their homes as they were promised so they let homes go into foreclosure which led to the collapse in valuations of real estate products and real estate portfolios and when Real Estate came down 40 percent all of a sudden that one dollar which was actually ten dollars became more like uh oh a six dollar loss because of that leverage aspect potentially an infinite loss of uh or a complete loss I should say rather than an infinite loss a complete loss of those credit default swap contracts is the entire real estate market melted down and what you ended up with is companies like Lehman Brothers going completely bankrupt and massive losses at other companies like Goldman Sachs or AIG as well some of which of course were bailed out unlike Lehman Brothers but how is today different from this Lehman Brothers moment well on one hand it's very different in that the crisis we're seeing right now is not one based on real estate valuations plummeting even though the real estate market is starting to turn down we're not seeing the insane leverage in the Banking and Financial system anymore when it comes to credit default swaps related to real estate however we are seeing leverage related to bonds and because the bond market has been getting decimated we've seen substantial losses at Banks because of the bond market certainly nowhere near as Extreme as what we saw during the great financial crisis because of real estate credit default swaps becoming worthless but still substantial losses and substantial losses are one of the reasons why the CEO of Credit Suisse who was actually just appointed back in July to sort of manage a takeover for credits resource sort of restructuring we should say this CEO recently came out and said that the bank is at a critical moment and the financial times has put together multiple pieces about how the culmination of all the failures of Credit Suisse to manage risk over the past few years so this new CEO suggests that he is going to announce a turnaround strategy for the bank at the end of October that turnaround strategy is widely expected to lead to thousands of job cuts and expense cuts and so what I actually decided to do is go through the investor relations report for Credit Suisse to try to understand is this just a poorly run Bank are there problems in the way the company is operating and is that potentially why we're seeing really scary charts that are circulating on Reddit and circulating on Twitter saying and suggesting that uh oh this company's going bankrupt because look the cost of ensuring yourself or your bond portfolio against the default of Credit Suisse has skyrocketed you can see the line on the right is almost similar to the peak as what we saw in 2008 so in other words the cost to insure yourself or protect yourself on the right is about the same as the cost to protect yourself in 2008 which is sending the signal that oh no it's getting so inexpensive to ensure ourselves against loss because of Credit Suisse there must be some serious fundamental issues at the company and here's just sort of another image of that that's circulating around on Reddit and so a lot of folks are saying that's it that's it this is Lehman Brothers all over again see the cost to insure yourself is so high like in 2008 that's it the financial crisis is here and my goal is to try to understand is there something in the investor relations report that actually shows me okay no this is just a bank that sucks versus a bank that's about to be just sort of the tip of the iceberg for a financial crisis and a financial meltdown and so that's exactly what we're going to do let's take a look at their financials so the first thing that I noticed that's most important and I went through this with course members in detail this morning we went through all of these Pages uh and and did some digging so this is sort of a quicker or synopsis a version of this and one of the things that we noticed is that in their wealth management division they had net revenues that had declined 34 we have a 34 decline in year-over-year revenues which is fine because a lot of companies have actually had these sort of 34 percent declines that's because the markets have gone down less people are trading so the amount of Revenue that you can make through managing other people's money or investment banking services is obviously declining this is the management Division division which has their revenue down 34 but what blows my mind and sends me a signal that maybe the problems at this Bank are really just one of poor management is the following take a look at this section right here it's called the general and administrative expense section it usually has to do with things like litigation and payroll expenses salaries and the company actually in the report cites exactly these issues some litigation expenses but also substantially higher salaries in order to retain talent and so what's remarkable is while their net revenues declined 34 percent under wealth management they actually bloated their General and administration expenses by 43 and their other compensation increased by nine percent so you would think think that when all of a sudden your revenues are going down 34 that you would see a decline in compensation for your Bankers uh or or the salaries that people earning or the just the head count that you have at the company but no the company actually became so bloated that their entire wealth management division this is their wealth management page their entire wealth management division actually lost roughly 100 billion dollars or 96 billion francs it's almost a one to one so if you hear me say dollars or swish Swiss Francs they're roughly the same they're about one to one but that's not even that bad what's actually worse is that if you jump over here to the Investment Bank side you could see the same thing happening here a 40 decline in revenues for the Investment Bank matched by compensation expenses that increased uh or sorry General and administrative expenses that increased 31 and compensation expenses that increase 10 percent why does that make sense to where all of a sudden a bank think that used to be profitable under the investment banking side well at least in the first quarter they were profitable in the second quarter lost 1.1 billion dollars in just one quarter while they're paying these massive freaking salaries and their banking or their Investment Banking revenue is down 40 percent now I think this is where it's just worth taking a quick little pause and saying look if there were some massive issues in terms of like credit default swaps that all of a sudden are becoming worthless uh which I mean don't get me wrong like bonds are kind of losing a lot of value right then then we would expect to see massive write Downs on the balance sheet of this company for assets losing a lot of value but what actually seems to be happening here is their clients their customers are losing a lot of money and therefore their revenues are declining in wealth management and Investment Banking while at the same time they're spending more money on people so so far what I'm seeing in this report is is actually not something that makes me think that oh this is a company that's losing a lot of money to bad Investments it's actually a company that just sucks at being a business remember one of the biggest things that I say because obviously you know that I'm starting this company house hack this startup one of the things that I say leads companies and businesses to bankruptcy is too much staff too much payroll and how are you losing 30 to 40 percent in Revenue but growing your your staff and bloating your staff that that seems illogical right and you could see here sort of one of their disclaimer primarily due to head count growth Investments is one of the reasons they're seeing this substantial uh sort of move in in expenses but on top of that they're seeing their clients or in my opinion we're seeing their clients uh getting pissed off and so you actually see about two billion dollars in outflows of customer deposits so you're seeing people leave the bank now I wouldn't go as far as calling this like a run on the bank I would just say that people are pissed off probably because Credit Suisse is losing them money and at the same time they're having to refinance their debt at a higher in interest rate and you can see that here because they're paying off old debt and refinancing new which rates are obviously higher so let's just briefly try to reconcile some of what's going on so you have losses at the company because of bad risk management right so they're not only did you lose money on archangos but you lost money through other scandals and litigation so you have expensive scandals and litigation so we can you know maybe what we'll do is we'll even write these down just so we can look at this nice and cleanly together here so we have scandals and risk failures right that would be like archangos that's that's the first thing and that's very expensive then they have more employees right that's more expense uh and at the same time revenue is going down this isn't assigned to me of like a systemic crisis so far on the financial system it's a sign that this Bank sucks right uh now there are losses uh are leading to withdrawals right that also makes sense like if you're if you're using them for Investment Management Services and banking services but then they lose you a lot of money because they parked you into bonds that they thought were safe like uh UK guilts and then all of a sudden they lose 50 in value well you might be a little pissed so you're seeing scandals and risk failure more employees more expensive Revenue going down losses leading to withdrawals at the same time as all of this you're having to refinance uh debt that you have whoopsies uh at a higher interest rate and the issue again with refinancing at a higher interest rate is you end up having higher interest expenses so I appear to have lost my page oh here we go so now you have higher interest expenses which again leads to more money that's going out of this company's uh pocket right so more interest expense so really so far what we have is a company again that is failing to manage its business appropriately and you could actually see that a little bit by looking at their cash flow statement and how much actual cash they have so here's how much cash that they have if you do the math here and you add up their short-term assets they've got about 353 million dollars in short-term assets you subtract short-term liabilities of about 90 million dollars you get to only about 263 million dollars of cash that this company has 263 million dollars of cash when you jump on over to the cash flow statement you kind of start seeing uh oh we are losing 1.8 billion dollars a quarter right now because we suck at operating our company and that includes interest expense right so we're spending 1.8 billion dollars in expenses but we only have just under 300 million dollars available and on top of that when we consider our operating investing and financing activities we actually just eradicated about 5.3 billion dollars of cash available we are out of money at this bank so not only are we sucking but we're straight up out of cash at this bank now I don't profess to know absolutely everything about this bank but just by actually looking at the financials rather than just relying on people ranting on Twitter about how things look like 2008 and clearly this is a sign that the end of the world is coming and this collapse spells the beginning of a great financial crisis 2.0 rather than just believe that headline nonsense which you know there's headline and there's detail I'm a detail person okay if you're a headline person sorry you're probably going to have some crazy emotions but you know I think by now we should learn that headlines are Sensational details are what matters when we actually look at this company we go wait a minute it's no surprise that the company is potentially going to lay off 5 000 workers I did some quick math and I think that in order for them to just go back to break even they actually need to cut more jobs they need to cut maybe between 7 500 to 10 000 jobs that would be about uh 10 well maybe about 15 to 20 percent of their Workforce of about fifty thousand fifty one thousand individuals world why so this fear that this is the Titanic you know and just the beginning of a fleet of crashes I think is a little overblown I could see though why people are freaking out because they're looking at a bank that just straight up sucks and it it sends these signals that maybe there's a larger underlying issue in our economy but to me again this is this is all uh being created or being exposed like the bad management of this bank is being exposed because the Federal Reserve is hiking rates extremely aggressively which is making their interest more expensive and is devaluing the bonds of their customers their customers are leaving and losing money the company has too many employees and it all points back to the fed the Glory Days Are Over as the FED basically is telling us the fed's saying look The Glory Days Are Over stop spending money tighten your belt and if you're Bad Company the Market's just going to eat you up the market is going to make you go bankrupt unfortunately this company has seen their market capitalization fall uh somewhere around 70 percent they're starting talk has just plummeted over the last year and when you look at their market cap they've got about a 10 billion dollar market cap they're trying to raise eight billion dollars the only way they can really do that is selling off assets so now they're thinking about selling off like their trading unit and their Brazil unit which are massive money losing units anyway and then if they do end up selling those off they're still going to have to potentially raise four billion dollars from markets but if you remember uh you know when when you like right now today we we are in a relative what I would say liquidity crunch or crisis globally where there's not a lot of cash to support uh these sort of Bank financing or company financing activities where the company goes hey we're just going to Issue four billion dollars of uh New Stock and so what ends up happening is much like ape ape you end up saying hey we're gonna dilute shareholders a lot well then what happened so uh to the stock well the stock ends up losing 60 percent of its value you in six months or actually less than six months in like two months just like ape did which is what I warned the reason I warned that stock the talk stock ticker symbol ape would likely Fall substantially is because when companies tried to dilute their shareholders in a liquidity crisis where people are like we don't have enough cash right we're getting gobbled up in the market everybody's wealth is going down we don't have money to keep supporting the liquidity needs of this company then what happens is you end up getting selling pressure that is actually more impactful than it should be because there just aren't enough buyers available at discounted prices and that's unfortunately going to lead CS stock which is Credit Suisse to to likely uh continue its plummet now ironically even though it's down uh 59 in the past year and 75 in the past five years it's actually green today it's green today at 1.78 potentially because people think okay or are realizing hey like this is not the sign of and then the market is rising slightly too with the exception of obviously of Tesla um you know maybe maybe this is not the sign of a systemic Global crisis but this is actually just a sign of a poorly managed bank and and if they can cut their Workforce the way the CEO is suggesting maybe they'll be able to get through this so these are my thoughts on the Credit Suisse coming disaster hopefully this Insight helps you and if you found it useful consider sharing in my opinion what I believe to be the truth uh and a subscribe for more thanks so much bye
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