Ep.105: What Just Happened To Credit Suisse And Should You Be Worried?

Hello and welcome back to episode 105 of the Market Maker podcast, where I'm joined as ever by my partner in crime and co-founder of AmplifyMe, Piers Curran. And there's only one thing for us to talk about, and we're a little bit early this week because we wanted to put something out about Credit Suisse. It's obviously dominated the headlines, certainly in the last 24 hours. In fact, I think given the fact that they've gone down so much midweek and rebounded so much this morning. I think they've done a 50% round trip, pretty much, when you're talking about market movement. And I thought, just, Piers, given I know you love a bit of sensational journalism, I was going to throw The Daily Telegraph, which is a major UK newspaper's headline, at you. Front page, it read, Swiss bank 'Crash stokes fears of a new global crisis. UK officials scramble to help prop up the bank as the meltdown overshadowed the budget.' I don't know if I could fit any more words into that to make it more sensational, but I think the important thing for us to talk about, you know, you did such an awesome job deconstructing the SVB situation into a way that I think normal mere mortals can understand. So I've had lots of great feedback from that, so I'm hoping we can get a little bit of the same with Credit Suisse. So we'll discuss what triggered the crash, why the shares are now up 20% after they initially fell 30%, um, then how is this different to the recent demise of SVB, any potential contagion effects for the eurozone. The ECB meeting is happening in fact later on today after we're recording this, so get your insights into the way the rates market has moved and then what to look out for next, both from the Credit Suisse perspective as a company and also from a global markets perspective, because certainly this isn't just a, a stock market move. Everything is shifting, the wheels are in motion. So perhaps we could start with what in the heck is going on? Why did their shares fall 30% yesterday? Let's start there.

Well, um, they fell 30% yesterday, but I think you've got, uh, you've got to step back a little bit. You've got to zoom further out than that because this isn't, this isn't a story that started yesterday. This is a story Wow, that started, I guess, back at the beginning of 2021, to be honest. If you— to understand the Credit Suisse situation, then you go back to the start of 2021, where it was a goliath of the global banking industry. Of course, its roots are in the old-school Swiss wealth management side. Okay, but, you know, as it grew, um, it became more ambitious, uh, you know, set about a sort of global growth strategy that also added on much more risky plays like investment bank— investment banking and, you know, sales and trading and prime brokerage and, um, and, you know, get taking on a much more global footprint. But really, in 2021, things started to go sight after a series of sort of big gaffes, you might say, in terms of really bad, really bad plays and scandals and, you know, various sort of bad decisions. So for example, you might remember Archie Goss, which was a fund manager that collapsed And Credit Suisse lost $5.5 billion in that deal. That was in March 2021. Before that, also in March— I mean, March 2021, I guess, is that kind of— that was the month where things started to pivot and go south. And it has been going south ever since for 2 years. It wasn't just the Archegos, it was the whole Greensill scandal, which I won't go into, but essentially Credit Suisse were forced to suspend $10 billion worth of investment funds that were tied up in this specialist finance firm that went south. And thousands of its wealthiest clients had their savings trapped inside that Greensill scandal. And I'm actually not sure if even they've got access back to that fully even now, right? But But look, you've got to go back to 2021, right? And this is where things went south. And ever since then, they've been in scrambling restructuring mode. They've gone through a few CEOs. They've gone through a couple of different kind of strategies in terms of major restructuring. They've flogged their equity trading arm. They're trying to think about doing a kind of bad bank to house their toxic debt and deal with that kind of separately. They've done this kind of deal on the investment banking side, which I'll talk about in a bit more detail, I think, later. It's quite an interesting one, that. But the point being that the share price has been moving heavily south since 2021. For example, in 2021, their shares were trading— well, let's just call it at the start of '21, they're trading at €13 per share. It's now trading at €2. That's even after the massive rally that we've had this morning. It's trading at 2. Um, so let's not get carried away with this rally that we've just seen. But in 2022, and particularly like big losses, okay, they're announcing big losses in 2021, big losses in 2022, they're expecting another big loss in 2023 as this restructuring plan gets rolled out and it's expensive. But what's happened in the meantime is that two things on their private banking side, so their wealth management division, people have been pulling their money out because they don't believe in Credit Suisse anymore. These are your kind of high net worth individuals. And they're like, pfft, there's plenty of other options in terms of big global banks that offer phenomenal private wealth management services. So people have been nervous and taking their money out separately. Depositors, just straight up depositors in terms of Credit Suisse being a retail bank, they've been withdrawing deposits as well. This is well in advance of the Silicon Valley Bank scandal, in quarter 4 of 2022, in fact. I think the deposit withdrawal was something like 37%, percent. 37% of the bank's deposits were withdrawn in Q4. 27% of the division's assets under management, the wealth management division's assets under management, were withdrawn. This is Q4 last year. So this thing's been brewing for a while. Now, clearly, the Silicon Valley Bank situation has now led to and has sparked just a little bit of a panic and almost in some ways a bit of a rethink and actually probably just reintroducing the concept of counterparty risk for a depositor. We haven't thought about it for— well, since the financial crisis, really. It's like anybody listening to this podcast before the Silicon Valley Bank thing, have you ever even for one second thought hang on, is my cash in my bank account, is that safe? Is that actually mine, or might I lose that?

Give me flashbacks to the run on Barclays in like—

Right.

'09.

It's been so far away from people's minds, right? But now it's back, and they're like, oh, well, hang on, this bank that seems like it's really important over in the US, hang on, that's gone. That's gone south. Okay, maybe I should think about my money and whatever bank that's in and maybe why is it safe? And I think on that front, when you're looking globally, I mean, I guess we were all looking for, right, in the US it was Silicon Valley Bank, who's next? And is it another US bank that's set up like Silicon Valley Bank? And we talked about that in the pod last week in terms of how it's set up and it's quite unique depositor base. And right, which bank's next? Which one's going to fall next? You know, little did we imagine that it would be one of Europe's very largest banks that could perhaps be next in line to go south. So, um, yeah, the, the SVB saga has just triggered another episode in what is an already multi-episode saga for Credit Suisse that goes back to the start of 2021.

So, so let me, let me bring it up to the current week then, and I'll just give you the running order here of how things came to light. So on Tuesday, the bank revealed that its auditor PwC had identified, quote, material weakness in its financial reporting controls, leading to the delay of the publication of its annual report. So if that wasn't Bad enough, but this is often what happens. It's a domino effect, and that initiates then the move, sparking what is already a fairly anxious market, as you say, on the back of SVB. Then on Wednesday, the Saudi National Bank come out, and their chair said that the answer is absolutely not when asked if the, um, if they would basically be open to providing capital to Credit Suisse. And SNB, the, the Swiss National Bank— the Saudi, excuse me, National Bank, not to get confused with the, the central bank. The Saudi National Bank bought a 10% stake in Credit Suisse last year. So they were like the savior at the point of where everyone was bolting for the door. And they basically came out and said, look, we can't do that again. And absolutely— he actually said absolutely not. And then that was what really fired things off yesterday. And, and caused the collapse. But were you surprised by, by how quick all of that came out and the severity of the move or not?

I'm— what, I wasn't surprised, no, because they're the most vulnerable. And look, in the end, you know, in the end, are Credit Suisse like Silicon Valley Bank? Absolutely not. There's, there's very, very little, hardly any similarities at all. In terms of their depositor base, in terms of their— what securities do they own on the asset side of their balance sheet, in terms of their capitalization and all the rest of it, there's no similarities at all. But Credit Suisse are the weakest bank in Europe. For the reasons I've just said. And so in the end, this is just that— as I said, it's that counterparty risk has just suddenly been— the spotlight has suddenly been shone on it and to the point where people are going, well, actually, you know what? I don't care that Credit Suisse are not like SVB. I'm just going to take my money out anyway just in case. Or it might even be— you could say it's panic, right? With all these depositors withdrawing money, you could say it's panic and it's irrational. I'm not sure that's quite right though, because if you're sensible and you're thinking, right, am I worried that other depositors are going to take their money out? If I'm worried that other people are going to do it, well, then I should do it as well. Because if everybody does it, this bank's going to go south and then my money's going to be stuck. So that's quite a rational thought process.

I heard a really good quote from a guy in the US. I can't remember who he worked for, but he basically said— he was talking about all of the CFOs and the conversations that would have been happening on the day prior to the SVB all transpiring. He was saying basically the rumors were on the CFO street was if you're gonna panic, just make sure you panic first.

Uh, yeah, very good. I mean, so, but, but I guess the thing is, right, what, what really triggered it? Is this— how serious is this for Credit Suisse? Well, you, you were just talking about the timeline there, and basically on yesterday afternoon, Credit Suisse were kind of reaching out to the Swiss authorities to try and encourage them to kind of deliver some kind of public statement of confidence. And so at 8 PM Zurich time, there was a statement, and it was— the idea was to try and reassure markets, and the statement was, if necessary, the Swiss National Bank will provide Credit Suisse with liquidity. Okay. Then at 2:00 AM local time, Credit Suisse released a statement. Now, before I even talk about what's in the statement and what they said, the fact they're having to release a statement at 2:00 AM in the middle of the night, that right there— forget what it says— that right, the timing of it tells you that this is very, very, very, very, very serious, that Credit Suisse are right up against the wall and are genuinely on the brink of collapse. You don't release 2:00 AM statements having strong-armed the government into trying to reassure markets the day before if something is not cataclysmically wrong.

Well, don't worry. We'll get the insight of that night when it comes out on Netflix.

Obviously, what's happening is the outflow of deposits and the outflow of assets under management is accelerating. I already told you about the stats in Q4, which were horrific. I can't even imagine. It's got to be a bloodbath. Now, if someone requests their money back, if you're a depositor and you go, I want— that's my money. I'd now like it back, please. Well, the bank needs to give it you back, right? But have they got the cash to give it back? And this is the whole problem. And that's why SVB went under. And that's why Credit Suisse might have gone under and might still if it were not for this kind of news where they're borrowing. So the announcement at 2:00 AM was that we, Credit Suisse, were taking decisive action to preemptively strengthen its liquidity by—

that's a key word.

Yeah, preemptive. I think it's a bit late to be preemptive, so I don't think anybody believes it's preemptive. Most people believe it's— replace preemptive with possibly too late. Anyway, they're borrowing 50 billion Swiss francs from the Swiss National Bank under what's called a covered loan facility, as well as a short-term liquidity facility. Um, and, and both of those facilities are fully collateralized by high-quality assets. Um, so basically they're taking an emergency liquidity injection of 50 billion Swiss francs, I assume, to cover all of the massive deposit withdrawals requests that are coming in. They're also— and this was maybe clever, we'll see— they also said further to that, we are going to step in and buy back 3 billion Swiss francs worth of senior debt securities, basically some of their risky toxic debt, which a lot of their customers are worried about, is kind of overburdening their balance sheet. So they're going to try and buy back and therefore scratch off some of the kind of riskier debt that they've got. But yeah, so look, that's why the share price has bounced very strongly today, but it's still trading at €2. Yeah.

The other interesting part of the statement that they made was obviously going head on to really make it clear how they're different to SVB and about this impact of, of higher rates that triggered that kind of situation. They said the volume of duration fixed income securities is not material compared to the overall high-quality liquid assets portfolio, and in addition, they're fully hedged for moves in interest rates. And then they went on to talk about how highly collateralized, almost 90% with more than 60% in Switzerland. Average provision rates are so much higher. So all the stats came out about the kind of subject to higher standards of capital funding, liquidity leverage requirements, all the rest of it.

Yeah. And all of that is true. And all of that is very strong, clear evidence why they're not an SVB type risk. That's definitely true. That doesn't mean they're safe. And in the end, the more depositors that request their money back, well then, the more the share price is going to drop and the more likely they're going to, in the end, go bankrupt. If everyone wants their money back, well then you're dead. So how bad—

European equities then got also hammered. So let's broaden out the view a little bit about the broader European banks, because they all took a hit yesterday.

Yeah.

So is that just a sentiment play, uh, inflation rather than a single, uh, nothing to do with specifically any of these other banks themselves?

It's, it's a, well, it's, it's a very sector-specific scenario, which I think I go back to the point that I think I made— did I make it in the pod last week? Maybe it was on LinkedIn. But my point was that SVB is a really good example of an unintended and unpredictable and unforeseen sort of secondary dimension effect of a very steep interest rate hiking cycle. Okay. It's like one of those things, it's— because when you raise rates so fast, stuff breaks and it takes time for— as we always discuss on the pod, interest rate increases, it takes time for that to have a meaningful feed-through effect onto the underlying economy. Right. We always talk about a 6 to 9 month lag. Right. Well, here we are. Right. It's a 6 to 9 month lag from a super steep hiking cycle. As stuff's breaking and it's stuff that you never thought about, you didn't know about, you didn't quite predict or foresee, and just stuff is breaking. And I think that generally a lot of people are worried. If you take the whole banking system, a lot of people are worried about this idea that they do all own this long duration debt that you were talking about and that SVB had a whole load of, All these banks own this stuff, a much smaller proportion in the case of most other banks, right? But they own this stuff and they haven't marked it to market. They bought it at really high prices before the rate hikes cycle began. And the actual value of that— those securities are now lower, and that's not being reflected in the value of these businesses. It's not reflected in their share prices. Well, now it is. So I think These bank share prices have come under pressure as investors reprice for them the value of their securities on their book by selling their shares and the share price moving lower. That's one thing. You've then got the more vulnerable within the banking community, obviously Credit Suisse being right up at the top of that list. And when you look at the share price sell-offs across the European banking sector, on Wednesday, Credit Suisse sold off 35%. Okay, well, the next in line was Commerzbank. Commerzbank, they, they were hit by 22%. Um, then it's Banco Sabadell, and I'm gonna be honest, I don't know who they are. I'm not a banking expert. I don't particularly invest in banking stocks. So, but they'll be vulnerable. BNP Paribas, they sold off 20%. SocGen were off 20%. Uh, Finco Bank were off 18%. You've got Standard Chartered, ING Group, Barclays sold off 16% at one point. Santander were down 16%. These are massive numbers. Now that's, that's a, that's, that's a very sentiment -driven move on that one day. Credit Suisse goes, everything else goes as well. There's a lot of correlation here, there's a lot of panic in there. I would say that whilst I'm not a buyer of Credit Suisse at €2 a share, these other banks, I would say, unless you think this is the beginning of another financial crisis, then these massive sell-offs in some of these other banks is unwarranted, is unjustified. That's probably my kind of spin on it. But what happens in the next 24, 48 hours is absolutely critical. And just because Credit Suisse have taken on this 50 billion Swiss franc emergency loan from the Swiss National Bank, Don't for one second think that means Credit Suisse are out the woods and they've been saved. Um, if I was a betting man, I'd probably still favor that they won't make it as they are, and they'll get bought, they'll get sold, they'll get broken up. There's a few different—

yeah, yeah. Well, let's talk about that. Let's talk about what happens for Credit Suisse specifically next, because I agree it might not continue to look— it might continue to exist but not look the same, essentially. And what might that be, and what are the options? And then let's talk a little bit about Christine Lagarde, because she hasn't slept all night, and now she's got to step up to bat. And was an absolute shoo-in for a pretty substantial rate hike again in Europe, and we're yet to see the outcome of that. It's coming down the pipe shortly, and I want to get your take on that as well. So what are the options for Credit Suisse from here?

Yeah. And so I would say reputationally, they're in shreds, tatters. So that's why I think I would still favor that we don't have a Credit Suisse after this episode like we've had before it. Now, what happens? There's a few options. UBS are the other big Swiss banking giant, of course. And The government in the past have always said, look, we prefer a two, two-bank system to give— just from a competition point of view. So they've liked obviously the fact that you've got UBS and Credit Suisse as rival entities. Both are systemic risks to the functioning of the Swiss economy. Okay, so let's make that point. Credit Suisse aren't going to go bankrupt and just die. They will get rescued somehow. And how might that happen? So UBS coming in and taking over, and UBS taking control, like HSBC bought the UK arm of Silicon Valley Bank earlier— well, on Monday, right? And they bought it for £1. Was the official price. Okay, so that's then another bank taking on— so you've got this other bank's balance sheet, which is super powerful. UBS have been having a great time. Whilst Credit Suisse have been suffering over the last 2 years, UBS have really been smashing it. So they're, they're going in the opposite direction reputationally. They're, they're really strong. So, you know, that would then be a very positive thing for depositors, right? Credit Suisse depositors, Credit Suisse high net worth individual customers who've got your money in the Credit Suisse asset management arm. You want to pull that out at the moment because you don't believe in Credit Suisse anymore. But if Credit Suisse now becomes UBS, well, okay, that's different. Okay, I will probably keep my money there. So you'll immediately stop the hemorrhaging of of cash, right? So UBS are probably the most likely. I don't know what the Swiss government would think about the fact that then from a competition point of view, you then become a one-bank system. So I don't know how they might view that. If they would prefer to not have that anti-competition issue, and therefore if they blocked a UBS move, well, really You've only got then foreign banks that are other likely suitors. And I don't know what the Swiss government would feel— I don't know how they would feel about a foreign bank. So who are the other foreign banks? Well, Deutsche Bank would be an interesting one because Deutsche Bank have had a strategy. I mean, they've had their own big issues, of course, over the last decade, gone through massive restructuring and actually have started to come out the other side of that. And they wanted to pivot more to their wealth management side and focus more on the safer, less volatile wealth management portion of their business, but they've been struggling to grow it. Obviously the great thing about Credit Suisse is a massive wealth management business. So Deutsche Bank picking up Credit Suisse because of a wealth management play would make sense. Another one would be BNP Paribas, the French bank. They lack a successful private banking arm as well. BNP Paribas quite weak in Asia. So Credit Suisse would help tick a couple of those boxes. So BNP Paribas could be an option. You've then got, obviously, as always, the Middle Eastern sovereign wealth funds who are flush with cash from the energy crisis. So, but as we've seen this week, right, they've kind of backed off, you know, stepping in at this point to to provide more capital for Credit Suisse. So whether that's likely or not, I don't know.

I think that was— I don't know the details, but I think partly was due to regulatory requirements. So once you go over certain thresholds, you're committed.

Yeah. To buying the whole lot.

Much more onerous to do other things that you need to, I guess, part of the governance of the size of the stake. Becomes much more, um, yeah, much more onerous.

But the, the other option is the Swiss government buy equity, much like what happened in the financial crisis, right? Lloyds and Royal Bank of Scotland.

Yeah. And on that point, the analysts at JPMorgan this morning were talking about, um, the central bank guaranteeing Credit Suisse's retail and wealth management deposits, and thus then forcing it to sell off its investment banking arm. So I guess that could be a way of just maintaining that two-bank system. They just strip off anything that's not part of the main core business, and then they backstop that core business to stop the rot, and then it just kind of—

yeah, it'll be interesting, I guess. So what, like, this big restructuring plan that Credit Suisse are trying to— that, that are, that are actioning has got a few different elements to it. I mentioned the bad bank idea. They're not calling it a bad bank. Internally, it's called the Capital Release Unit. Um, it's a bad bank, uh, where you kind of siphon off and separate your kind of high-risk toxic debt. Um, they're also going through cost cutting. Uh, they're trying to reduce spend by 15%. So that's reduced spend by 2.5 billion Swiss francs. So part of that is laying people off. So 9,000 roles they're looking to lay off. That's over 52,000 workforce they're looking to reduce IT spend. They're selling off stuff that's peripheral like hotels, office buildings, and so on, that sort of stuff. But then the other big one is about the investment banking. Arm, which is considered a bit more risky. But, um, what they've done it— and it's a little— again, it's a little bit suspect this. So there's a guy called Michael Klein, who's this— is like one of the biggest— he's like the Rain Man. He's like one of the biggest dealmakers globally, uh, M&A dealmakers I'm talking about. So he was the one who, um, who pulled off the Barclays takeover of Lehman Brothers, post-bankruptcy that is, in 2008. He did the big giant Dow Chemical deal with DuPont. He did the Glencore-Extrata deal. Some of the biggest deals ever, it was him. And he's got this boutique, M&A boutique that he operates. Right? Separate to that, he was also sat on the Credit Suisse board. And now the Credit Suisse board basically decided, I know what great plan for the restructuring. Let's take our investment banking division, spin it off as a separate entity. We still own it, but we'll kind of make it a separate entity. Then we'll buy Michael Klein's M&A advisory business to create this super boutique M&A firm. So Michael Klein then stepped off the board for the— to enable the board to then make that decision, because it would have been a conflict of interest. And then they basically are paying him $175 million to basically buy his boutique, um, as I said, to create— and what it would do, their idea was it would create a a boutique M&A firm that's like 3 times bigger than the next biggest boutique, but it's not as big as the big giant investment banks like Goldman Sachs and JP Morgan, right? So the idea is you have this, this super boutique that could, with Michael Klein's reputation, could become quite a powerful player. So it sounds good on paper, right? But, um, I think probably what will happen is that gets sold off entirely, um, and becomes its own separate entity. Um, but yeah, we'll see.

So let's, um, to wrap things up, let's— aside from the kind of global de-risking that's been very much apparent over this anxiety on Credit Suisse, it has sparked a huge dovish response in Fed expectations, and the odds of the 50 basis point hike to come today from the ECB dropped dramatically. The entire curve expectations for ECB action has collapsed. Perhaps even more notably, in the US, Fed hike expectations, they've plunged as far as the 22nd of March, the Fed meeting coming next week. It's a coin toss now between unchanged hike 25. 7 days ago, 8 days ago, we were at hike 50. Even more so in September, the market is now priced for 60 basis points of cuts.

Yeah, um, I mean, if you take Europe first, I'm just— whilst you were talking now, I was just looking at the German 2-year bond yield. Um, The German 2-year bond is called the Schatz, which is still one of the best-named securities out there on the planet. So the yield on that dropped from 3.3% last week. This is 3.3%, and it bottomed out at 2.3% yesterday. I can't explain to you how big a move that is.

Does that make you miss your trading day? You're sat on the terminal. That would have been like a career day, right?

Ah, potentially I'd have been all over that. Yeah, that, that would— that's like—

that's why you're a bit antsy the other day, because normally you're a very cool, calm customer, but I reckon you had your eyes on that 2-year yield and that's why you were being a bit fruity in the office the other day.

Yeah, a bit of— I have to say that, yeah, that, that's like— that's one of the biggest moves I've ever seen. Yeah, I was a little bit Why, if I was still sat at my trading desk anyway? Look, don't forget that the interest rate, the ECB's interest rate is 3%, and we were expecting prior to all of this then to raise to 3.5%. Right. So the 2-year yield should reflect really roughly the expectations of what the central bank's interest rate is going to be. So the fact is now trading, it's bounced a little bit, it's now trading at 2.5%. So yeah, to your point, it's like not only are markets now saying that central banks are not going to be able to hike anymore, they're going to have to start cutting. Now, I think that's a bit extreme. I think we're still in the eye of the storm here. And I think that reactions and behaviors have got carried away a little bit. So whilst I do believe that central banks are going to have to just go, hang on a minute, We need to just steady the meeting today in Europe, the Fed's meeting next week. What are they going to do? I personally think it makes sense to just pause. Let's just not hike and let's just make sure this SVB thing and this Credit Suisse thing doesn't become bigger. And if and when that's the case, which I think that will be the case, then right, the meeting after, let's just— things have settled down, let's get back to thinking about inflation and right, we can make some better decisions. Okay. So I think it definitely makes sense to pause just at this moment. I mean, the ECB, they made classic errors in the past. So in 2011, they hiked interest rates in April of 2011 and July of 2011, which then triggered the massive kind of eurozone debt crisis. So in the past, they have made the error of hiking anyway, even though we've got this sudden flare-up of risk and we're not quite sure how it's going to play out. So they should learn their lesson from that and go, right, we're just going to step back. Doesn't mean we're not going to hike in the meeting to come. We're just saying, look, we're just going to pause. So I think the idea of rate cuts, I just— unless this turns into a big crisis, which it could do, but I don't think that's likely, then inflation is going to stay high and they're not going to be able to cut rates. But we're in this panic at the moment and it's spread across all markets. I mean, crude oil dropped below $70. That's WTI crude. I mean, that's like saying, you know, that's like recession risk kind of thing, right? Where you're thinking, right, demand for oil is going to drop. So we're below $70. That's the first time we've been below $70 since 2021. Uh, gold, safe haven asset, of course, has rallied, you know, well over $100. Um, you know, as I was saying, you know, yields on these safe haven debt products have dropped as prices have gone up. You definitely have this broad-based global risk-off with a particular high sensitivity to, um, the banking sector. And like, indices that are more exposed to the banking sector, like you take the FTSE 100 for example, well then that index has suffered more than most because they've got a higher proportion of banking stocks in the index, right? So the FTSE 100 has come off super sharply. Um, but yeah, I, I'd say let's see whether this 50 billion Swiss franc injection is going to do the job or not. And if not, it's going to happen quickly. Could be by the end of the week it's actually not worked, and fine, we get a UBS scenario, or we get— it might be over the weekend, probably. Where you're going to get a UBS deal brokered, you're going to get— or you're going to get the Swiss government stepping in and buying equity, or what have you.

Yeah, I think one of the, the things that really stood out throughout this whole conversation is when you were talking about some of those percentages of the other banks and the size that they've declined. I can't help but immediately just have the feeling that that's just so overdone. That's such a behavioral move. It'd be interesting to see, because come what may with Credit Suisse, they are a systemically, um, important financial institution. So they— that it's not going to cause that kind of, uh, you know, if you're new to markets, that Lehman moment is not going to happen, um, because of the regulatory infrastructure in place, because of what we've seen last night. So yeah, could it get worse? Sure. But yeah, I I don't know, that just felt— those percentages, I'm— I didn't see all of those. They were really quite shocking. Yeah, how aggressive that move was. So, um, and the other people I've seen more of this week than, than usual with our team is the tech team. Had a lot of the tech team sniffing around my desk the last 48 hours asking me about, um, what's been going on. Uh, and so I thought, well, that's a bit odd. So I, you know, fired up Coinbase.

Ah yeah, quick look.

Oh, that's why Bitcoin's up, you know, 20% or whatever it was, is TradFi burns.

So yeah, well, I saw the— well, what's interesting about that though, I mean, that is true now, right? But actually, when SVB Bank went, went south, Bitcoin was off 10%, which I thought was quite ironic. Um, anyway, it has now rallied. So yeah, Bitcoin is actually trading— actually, the highest, just about to— yeah, the highest since summer of 2022 here, because we trade up towards $25,000 on Bitcoin. So yeah, yeah, the tech team are all over that.

All right, well, look, let's wrap it there. I hope you enjoyed that episode. Please do make sure that you follow the channel if you're not already doing so. Leave us a review and rating, be much appreciated. And thanks for listening. We'll see you next week.

Catch you later.