In this solo episode of The Market Maker, host Anthony Cheung provides a concise market update focusing on two headline stories. First, he examines Goldman Sachs’ aggressive entry into the crypto space following the FTX collapse, highlighting the bank’s investment in 11 digital‑asset firms, the creation of a small crypto‑options desk, and its view of the fallout as both a recruitment opportunity and a long‑term strategic pivot. Cheung also notes Goldman’s upcoming blockchain simulation product slated for Q1. Second, he explains Credit Suisse’s recent 4 billion‑franc (≈$4.3 bn) two‑leg capital increase, the rights issue mechanics, the involvement of the Saudi National Bank, and how the raise is intended to fund restructuring, asset‑bank exits, and 9,000 job cuts, which has temporarily lifted the stock about 3 % despite a year‑to‑date decline of roughly two‑thirds. The episode also promotes a Retrader competition that lets listeners replay historic market volatility events, and concludes with a light‑hearted World Cup quarter‑final prediction between England and France, forecasting a 1‑1 draw and England winning on penalties. The tone remains conversational yet analytical, with a measured optimism about Goldman’s crypto ambitions and a cautious view of Credit Suisse’s restructuring progress.
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Okay, hello and welcome to episode 94 of The Market Maker. And again, I am being left solo for this one. Piers, I believe, might actually even be on a plane as we speak. He's flying back from Sydney, Australia. He's been out there all week with our client Citadel and Credit Suisse. So, uh, unfortunately for him, he's not been sunning himself on the beach. He's been actually doing some work, so all good. Um, but yeah, in this episode I'll, I'll keep it fairly brief. I just want to touch on really two points. It's been fairly quiet, I would say, on the, the macro front. Nothing too exciting, certainly if you can cut through the noise of mainstream media and not get too head turned by UK house prices moving down to their slowest, uh, or fastest deceleration, let's say, since the financial crisis. Or if you can escape the, uh, Harry and Meghan Netflix release headlines, then you're doing a better job than I at this point. It's hard to, uh, to fight through the noise. But yeah, I'm going to talk a little bit about Goldman Sachs and crypto, and I'm also going to talk about why Credit Suisse shares are actually up today, outperforming the market. And so that's what's on the agenda. But before I begin, if you follow us on our social channels, you might have seen that we have launched a Retrader competition this week. Retrader is a mobile app and we've basically captured the tick data from the CME Exchange in Chicago and accelerated time into a compact 2-minute retrade of a real historical event in markets from 2022. And yeah, there's been a ton of those big episodes of volatility, but I picked 3: the invasion of Ukraine, UK mini-budget, and also then the situation that happened with U.S. inflation and subsequently interest rates. So all you need to do is follow the link wherever I share this episode. If you just go to the show notes, it'll take you straight to the competition registration form. And you need to just complete all 3 games. It doesn't matter about your P&L, the— as long as you complete all the games. A winner will be picked at random. The deadline's the end of this year. The winner will be announced at the beginning of 2023, and the winner will get a fully sponsored place on our Summer Analyst Training Program. So yeah, go for it. I wish you well. But yeah, let's dive in and let's talk a little bit about Goldman's and crypto. And the reason why this came into the spotlight this week— Reuters released an exclusive article talking to the US investment bank, and it comes at an interesting time because obviously at the moment the dust has kind of somewhat settled on the FTX fiasco, albeit I keep seeing, keep seeing him doing interview rounds at the moment. He's definitely milking the moment, um, is our, our SBF. But Why is, why is Goldman's name tied to this? Well, first thing is the relative easy picking. And what I mean by that is that the implosion of FTX has heightened the need for essentially trustworthy, regulated cryptocurrency players. And big banks have seen this as an opportunity to basically pick up some of that, that flow. Now, you know, you might think, well, if I'm trading Bitcoin, why do I need trustworthy, regulated crypto players. Well, that's it. We're talking about institutional flow, which makes up the largest proportion of volume. And obviously, just given what's happened, it really has laid bare the situation currently that we have with other players in the market like your FTX. But then you step that up, you've got Binance, but then you've got these other more traditional regulated parties like your Goldmans, for example. And so they've just hoovered up a lot of that business. So it's been positive for them in that regard. Um, their view, according to their head of digital assets who spoke earlier this week at Goldman's, was saying that, look, while this is a setback obviously in terms of sentiment— FTX was kind of like the poster child, it was quite central to the ecosystem, um, there's no doubt that that's had an impact on broader sentiment— but the point he was making is, look, the underlying technology continues to perform. And that's what Goldman is positioning themselves for as a long-term strategy pivot. And Goldman has invested in 11 digital asset companies. They provide everything from, you know, compliance, cryptocurrency data, blockchain management. And, you know, if you want to see the kind of breakdown of all of these different investments, then just jump over to my, my LinkedIn account and check out one of the posts I did this week. It's a really great diagram I found of all of these different investments. And I think it's really interesting for you to see how these banks are positioning for the future, uh, and definitely to get a bit of under— better understanding of how a more traditional-based bank is approaching the technological shift that we're going through at the moment. Now, the other thing here, the other offshoot of the FTX debacle, is the fact that Goldman sees this as a great recruitment opportunity If you think about it, looking at the broader tech space, November was brutal for tech job cuts. I was just looking at the numbers before I came on to do this. And if you just took Meta, Amazon, and Twitter alone, you're talking about 30,000 job cuts in one month. Now, if you look at the year to date so far and looking at just the tech sector, you're talking at about 100,000 jobs. So there's definitely an ability to pick up Engineers, for example, at this present point in time, Goldman himself, the head of digital assets, has said his team's kind of fine at the moment. I think their team overall is about 70. I think they've got a 7-strong crypto options derivatives trading desk, so that's pretty small, but they are building out their private distributed ledger technology at the moment. And on that side of things, talking about blockchain, uh, yeah, can't wait for Q1 to come around because we are going to be launching our blockchain simulation, and that's going to be hitting the tape, going out to the masses in Q1. So yeah, super excited to get that out to all of our clients. But yeah, so overall, the main crux of this is that, you know, now sentiment's kind of steadied a little bit in the wake of that FTX meaningful moment in the kind of milestones of crypto adoption. It's been quite interesting to just see that those major players there have just been picking at the bones. And actually, you know, one company's loss is another company's gain in this instance, and Goldman's definitely has been a part of that. All right, the other thing is Credit Suisse. I said that their shares were up, they're up about 3%, recording this on, on Friday morning. So they're actually outperforming the market, which sounds a bit odd because their shares have obviously been hammered of late. But Credit Suisse have just completed a 4 billion franc two-pronged capital increase, so So dollar terms, talking about $4.3 billion US dollars. Investors agreed to buy 98.2% of the stock on sale in a rights offer to raise about 2.25 billion Swiss francs, and the remainder of the stock will be sold in the market at or above the offer price of around 2.52 francs a share. The rights issue was the second leg of the bank's capital raising, so The firm already raised 1.76 billion francs through a private placement last month to investors, including the Saudi National Bank, which will become the largest shareholder with just under 10%. Obviously, why is all this happening? I think it's pretty obvious. Shoring up their finances to address investors' concerns is the main thing after billions in losses over the past two years. Recent client defections and asset outflows have been fairly violent, as we know, in recent months. So the funds are going to help pay for the exit, uh, for, or for the firm to exit from large parts of its investment bank, and also the 9,000 job cuts and the various packages that go along with that as well. So their shares are up, um, and again, why, why do a, a rights issue like this? Well, it's a good way to kind of tap into your existing shareholders when there's a time of general weak sentiment perceived around your company from external, uh, parties who then you would otherwise go to to raise capital. So in this way, it's a way of trying to plug the hole. And, you know, would you want to participate in that, uh, that rights issue? Well, this is all to do with the belief or not whether you think that they can pull off this aggressive restructuring plan that's already been tabled. And so, yeah, at the moment they're off their lows, but in context, they're up about 3% at the moment today, but for the year-to-date performance, they are still, um, down around two-thirds of where they were trading at the beginning of the year. So still heavily discounted. And then final thing to mention, of course, is the football. The World Cup obviously still going, and despite lots of shocks, exits from big names like Germany, Spain, England are still alive and kicking, uh, and they're going to be playing France, of course, in the quarterfinals this weekend. So I've got a couple of stats for you, the winner of which will go on to face either Portugal or Morocco. So could be a very interesting prospect of moving further through the tournament should we progress through France. It'll be the first time the two sides have met in a knockout round of a men's major tournament. England, looking at the stats, because obviously being an analyst I have to throw some of these at you, uh, England do hold the upper hand. They've had 31 previous meetings with 17 wins compared to France's 9, but 10 of those victories were before 1950. England have lost 4 times and won only twice this century, so History has flipped. More recently, France might have the edge here. The teams have met twice at World Cups, with England winning on both occasions, actually. 2-0, of course, in the infamous 1966 where England won their sole title, and then England won 3-1 in 1982 as well. So there you have it. Now, who— what do I think is gonna be? Well, look, I've plugged in, uh, into my, my model and it's churned out that the end result is going to be 1-1, penalties, England win. I'll leave it at that. All right, have yourself a great weekend. Uh, check out the show notes for the Retrader competition entry form, and yeah, I'll speak to you next week. All right, take care.
