Click here: The Weekly Beacon – October 7 2022
We will be giving some macroeconomic market updates on a weekly basis. No
recommendations will be given in this commentary and we encourage you to contact us
today if you have any questions regarding any observations.
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This weeks issue: Lehmann Brothers, 2008 Financial Crisis, Credit Suisse, Circuit Breaker, Too Big Too Fail, Bank Stocks, Financial Sector, TD Bank Stock, Bank of America Stock, Leverage, Credit Default Swaps, Elon Musk, Twitter Purchase, Twitter Private, Twitter firings, $54.20, ESG Investing, ESG Banking, BlackRock, UK Cut Policy, UN Stop Raising Interest Rates, The FED, Central Banks, Inflation, Monetary Policy, CPI, OPEC+ Policy, Underinvestment in Energy, Energy Crisis, Why is Gas Rising at Gas Stations, Renewable Reality, Fossil Fuel Usage.
Lehmann Moment?
Unless you were under the age of 16 between 2007 and 2009, we are sure you know the impact that the Financial Crisis had on North America. Even though equity markets are down 20-30% in 2022, it is nowhere near the 2008 level. Investment banks failed for the first time.
It appears many online are pointing to 2 financial institutions that could be the 2022/2023 versions of Lehmann Brothers or Bear Sterns – Credit Suisse and Deutsche Bank. Credit Suisse has more buzz around it and a messier balance sheet, so if something big happens, look there first. We highly doubt anything will break and that a bank will fail. Improved regulations and stress tests have led to a more regulated banking system since 2009 but it is something to mention as it’s a hot topic now (plus it is interesting to look at what retail investors are thinking in today’s markets, they have shown resiliency).
Before we jump into any details at all, this is quite a sign if we say so ourselves. Circumstantial or coincidence, you tell us.
Yes, you are reading that right, the Chairman of Credit Suisse’s last name is Lehmann.
Essentially chatter online started to erupt that Credit Suisse was extremely levered and did not have the assets to pay off debt especially if credit spreads continue to rise. This chatter had a lot of steam behind it.
Here are a few of the tweets that went viral:
