Monday, February 18, 2008

What A Difference A Week Made....Credit Suisse Discovers Another $ 2.85 Bilion "Fair Value Reduction"

As one who has listened to the entire conference call from Credit Suisse just one week ago i can assure you that this will spook the markets. Credit Suisse was besides Deutsche Bank and Goldman Sachs viewed as one of the big winners during the turbulence. But there was always doubt that their numbers might be too good to be true...... Credit Suisse is proving that this might be the case..... Should be very bad news for the confidence in the marketplace overall...... I assume the "arrogance" from the Credit Suisse management won´t be as obvious as during the last call...... Stock tanking 7 percent......

Als einer der sich vor einigen Tagen die Telefonkonferenz angehört at bin ich mir sicher das diese Meldung hohe Wellen schlagen wird. Bisher galt die Credit Suisse zusammen mit der Deutsche Bank und Goldman Sachs als einer der Gewinner der Marktturbulenzen. In der Vergangenheit sind immer wieder Zweifel aufgekommen ob "die Zahlen nicht zu gut sind um wahr zu sein" ...... Credit Suisse liefert hier eine Steilvorlage für diese Vermutung......Ich bin mir zudem sicher das die "Arroganz" von Seiten des Managements während der nächsten Telefonkonferenz sicher nicht wieder so ausgeprägt sein wird wie letzte Woche .... Aktie zur Eröffnung 7% tiefer......

Thanks to Randy Galsbergen

Credit Suisse Further to its commitment to provide transparency, Credit Suisse today announced that in connection with the operation of ongoing control processes, it has undertaken an internal review that has resulted in the repricing of certain asset-backed positions in its Structured Credit Trading business within Investment Banking.

The current total fair value reductions of these positions, which reflect significant adverse first quarter 2008 market developments, are estimated at approximately USD 2.85 billion (having an estimated net income impact of approximately USD 1.0 billion).

In the first quarter to date, we estimate we remain profitable after giving effect to these reductions. The final determination of these reductions will depend on further results of our review and continuing market developments. We will also assess whether any portion of these reductions could affect 2007 results. Finally, our internal review, which has identified mismarkings and pricing errors by a small number of traders in certain positions in our Structured Credit Trading business, is continuing.

> Here the Full Year Results from Feb. 12th & Webcast

Qatar was maybe a little bit premature....

Sieht ganz so aus als wenn einige Investoren heute leicht erhöhte Temperatur haben werden.....

Qatar fund buys Credit Suisse stake

The QIA’s move comes after Credit Suisse posted robust fourth-quarter results underscoring its resilience during the credit crisis,......

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9 Comments:

Blogger jmf said...

Credit Suisse down 6.8% after unexpected pricing errors

Now suspended

12:05 AM  
Anonymous Anonymous said...

It's down about 9% at the moment.

The title of that last link probably should have been "Qatar fund buys Credit Suisse steak"... haha

1:09 AM  
Blogger jmf said...

Moin Anon,

they have sheduled a call at 15.00 cet.....

Should be entertaining.......

1:18 AM  
Blogger jmf said...

Another Creduis Suisse in the making....


All that’s missing at BarCap is a little clarity

In terms of what has actually gone into that £1.64bn, it’s all a tad unclear. Even with the benefit of note 18, which starts down on page 61.

There’s £846m, which includes £722m of losses against ABS CDO super senior exposure, £60m of other credit market exposure and £58m on committed leveraged finance positions. We’d note that £58m, on drawn leverage finance positions of £7.4bn looks a little puny.

Barclays’ monoline exposure, which Bob Diamond on Tuesday professed himself “not uncomfortable” with, rose by a factor of 10, from £140m at the half year stage to £1.4bn by the end of December. Barclays’ has £1.3bn of hedges against its £6bn gross ABS CDO super senior exposure, none of which is with monolines - which rather begs the question of who it is with.

Elsewhere writedowns of £823m net come on other US subprime and Alt-A exposure, and its exposure to the monolines and CMBS. But we can’t see what write-downs, if any, Barclays has taken on its ballooning exposure to assets backed by a monoline guarantee - or indeed on its £5bn exposure to subprime or £4.9bn exposure to Alt-A.

2:00 AM  
Anonymous eh said...

J-M,

Aber it is mostly 'full steam ahead' for the markets. Verrückt. But when die Märkte move this way it does present trading chances.

6:28 AM  
Blogger jmf said...

Moin Eh,

i totally agree. I would have thought that some kind of Monoline spin attempt would have hit the markets today.

I have assumed that this hope was the main reason for the strong futures.

It really wonders me that we havn´t sold off so far....

The short side is getting more interesting if this move can hold a few more days....

Unfortunately i´m visiting the UK during the next week and i won´t be able to made trades.

6:42 AM  
Anonymous eh said...

J-M,

Unfortunately i´m visiting the UK during the next week and i won´t be able to made trades.

Schade.

I am fairly regularly in London, but I do have internet/trading access when I am there.

7:01 AM  
Blogger jmf said...

Moin,

i will have access too but i don´t know if i will have the time to track all the spin and the mood of the market.....

The fundamantals won´t change for the next few years....

7:09 AM  
Blogger shtove said...

Anyone expecting a similar move from Deutsche Bank? They too look in great shape, until ...

1:54 PM  

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