Moody's Cuts U.S. Banking System To Negative

There are pros and cons of bond credit ratings.

Pros:

1. Transparency: The bond credit rating system provides transparency in the bond market. Investors have access to unbiased information about the credit quality of the bond issuer, which enables them to make informed investment decisions. This helps to maintain market efficiency and minimizes information asymmetry.

2. Standardization: Bond credit ratings are standardized, which means that ratings agencies use a standardized methodology to evaluate the creditworthiness of bond issuers. This standardization increases the accuracy and consistency of credit ratings among different issuers and reduces the potential for confusion or manipulation.

3. Accessibility: Bond credit ratings provide a readily available source of information to investors who may not have the resources or expertise to conduct their own credit analysis. This provides a level of accessibility to the bond market that would not otherwise exist.

4. Risk Mitigation: Bond credit ratings provide a risk mitigation mechanism to investors who can use them to make more informed investment decisions. By assessing the risk associated with investing in a specific bond, investors can avoid bonds that are more likely to default and mitigate their risk exposure.

Cons:

1. Conflict of Interest: Bond credit ratings are issued by rating agencies, which are for-profit organizations. As such, there may be a conflict of interest between the rating agency and the entity being rated, which may impact the accuracy and impartiality of the rating.

2. Over-Reliance: Investors may become over-reliant on bond credit ratings, sometimes without conducting their own independent credit analysis, which may lead to overlooked risks or unfounded assumptions.

3. Lack of Timeliness: Bond credit ratings are typically updated infrequently, sometimes only once a year or less. This means that the ratings may be outdated before they are updated, leading to possible misjudgments or missed opportunities.

4. Narrow Scope: Bond credit ratings do not provide a comprehensive analysis of an issuer's overall credit health, such as off-balance-sheet activities, contingent liabilities, and external market factors. This means that investors may need to conduct their own independent credit analysis to fully understand the risks associated with a bond investment.

Peoples should be aware of these pros and cons, conduct their own credit analysis( if possible ), and use bond credit ratings as one of many pieces of information when making investment decisions. Additionally, regulatory bodies should continue to monitor the accuracy, impartiality, and transparency of rating agencies to help maintain the integrity of the bond market. :)
 
All eyes are on Switzerland right now. They've got about 12-24 hours to complete a complicated Swiss government-brokered deal between the countries two largest banks, UBS and Credit Suisse.

There's been an offer put forward for UBS to buy CS for about $1 billion; however, CS's largest investor(s) has so far rejected because -- wait for it -- they think the offer is too low. This comes after CS has reported lost about $10 billion in deposits within the last week.

Worth noting that CS is a significant player in global markets and financial centers, including the United States. If CS looks like it's about to collapse, this could easily spark a contagion event. This is some serious shit. Hopefully it gets worked out. Link to the story below.

They've settled at $3 billion. I think that's dollars, rather than Swiss francs.
 
Looks like UBS credit default swaps are still rising.

This could still have an ugly outcome.

Brace for possible impact.
Yeah, they did seriously need to settle this over the weekend before trading opens, and they did, for $3 billion. WSJ.

I like excitement as well as the next person, but I'd like all this to stop. We've got troubles enough with politics, we don't need the economy to go blooie. Again.
 
Yeah, they did seriously need to settle this over the weekend before trading opens, and they did, for $3 billion. WSJ.

I like excitement as well as the next person, but I'd like all this to stop. We've got troubles enough with politics, we don't need the economy to go blooie. Again.

It's probably too late to stem whatever hemorrhaging that's going to occur. I suspect some pressure on UBS tomorrow.

I'm also not sure regional banks have seen the last or the worst of capital flight. Swiss banks are blaming US regional banks for delivering CS's knockout punch. S&P is giving First Republic another downgrade, which is going to make it tougher for them to function and do normal banking activities.

Worth pointing out this is no longer a *regional* banking problem. Credit Suisse was one of 30 systematically important banks worldwide. This infection is starting put pressure on the big boys.
 
It's probably too late to stem whatever hemorrhaging that's going to occur. I suspect some pressure on UBS tomorrow.

I'm also not sure regional banks have seen the last or the worst of capital flight. Swiss banks are blaming US regional banks for delivering CS's knockout punch. S&P is giving First Republic another downgrade, which is going to make it tougher for them to function and do normal banking activities.

Worth pointing out this is no longer a *regional* banking problem. Credit Suisse was one of 30 systematically important banks worldwide. This infection is starting put pressure on the big boys.
I know you are right. Thanx for info. There's a happy thought (not) -- pressure on UBS?? Oh, dear, another day sitting in front of Bloomberg? I hope not.

I was quite upset in 2008 (and I should have been!) so really, I'd rather we not have this going on. Well, it is what it is, whatever that may be.
 
Another thing they're trying to keep "low key" is the price of gold.

They are telling us the real spot price...but the ups & downs are skewed.

If gold is up $40 it will say it's up $15 (even though the spot price is correct).

I've taken to writing down the price of gold each morning and at market close...so I can compare for myself.

Market close on friday spot price was $1,998

Tomorrow morning it will probably say gold = $2,250 (up $30)

Spot prices are wholesale prices, and yes it just keeps on climbing. The average yearly baseline not all that long ago was around $820.
 
Swiss banks are blaming US regional banks for delivering CS's knockout punch. S&P is giving First Republic another downgrade, which is going to make it tougher for them to function and do normal banking activities.
Well, let's be fair, they are right, of course. Duh! We did do it. Same with Bear Stearns and Lehman Bros causing trouble in 2008. If they are saying we are a problem for the financial world, they have a case.

I myself blame Peter Thiel, Elon's partner originally in the money machine PayPal. He was doing a capital call for a venture company and calling in and depositing into SVB billions from other banks, apparently what these people do for their clients' funding. ---------- And suddenly, he says, mysterious "delays" occurred, and "glitches." Yeah, I see his issue with sympathy ----------- he investigated, and was NOT happy, and within an hour (this was on the Wednesday) zapped a really lot of money, a really lot, outoutout and also called some friends. And that was that. So much for SVB.

I want to read more about this Peter Thiel thing. And doubtless will, in five years when the books get written.
 
Everybody got their big-boy pants on?

I feel things are about to get dicey. Central banks around the world are making moves to shore up the system before Asian markets open.
 
Was lookin' for a proper link...

"Central banks involved in the dollar swaps will “increase the frequency of 7-day maturity operations from weekly to daily,” the Fed said in a statement coordinated with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank."

 
Well, let's be fair, they are right, of course. Duh! We did do it. Same with Bear Stearns and Lehman Bros causing trouble in 2008. If they are saying we are a problem for the financial world, they have a case.

I myself blame Peter Thiel, Elon's partner originally in the money machine PayPal. He was doing a capital call for a venture company and calling in and depositing into SVB billions from other banks, apparently what these people do for their clients' funding. ---------- And suddenly, he says, mysterious "delays" occurred, and "glitches." Yeah, I see his issue with sympathy ----------- he investigated, and was NOT happy, and within an hour (this was on the Wednesday) zapped a really lot of money, a really lot, outoutout and also called some friends. And that was that. So much for SVB.

I want to read more about this Peter Thiel thing. And doubtless will, in five years when the books get written.

Call me a communist, but this is what happens when we create a strong billionaire class. When 1% of the population controls a disproportionate amount of wealth, working stiffs in Ohio and Indiana can be doing everything right with their money and career choices, and it won't matter because some arrogant flamboyant un-American pansy bitch in San Francisco can fuck it right up.
 
I know you are right. Thanx for info. There's a happy thought (not) -- pressure on UBS?? Oh, dear, another day sitting in front of Bloomberg? I hope not.

I was quite upset in 2008 (and I should have been!) so really, I'd rather we not have this going on. Well, it is what it is, whatever that may be.

Asian markets open soon, eh? :) They usually react *after* Western markets, though.
 
Everybody got their big-boy pants on?

I feel things are about to get dicey. Central banks around the world are making moves to shore up the system before Asian markets open.

And don't necessarily sleep easy if Asian markets don't react, either. The shit tends to hit the fan in the US first, though since we're dealing with EC banking, Europe might be the canary in the coal mine. Maybe around 4 or 5 a.m. as you're grabbing your first cup of Folgers...that's when we'll know.
 
Call me a communist, but this is what happens when we create a strong billionaire class. When 1% of the population controls a disproportionate amount of wealth, working stiffs in Ohio and Indiana can be doing everything right with their money and career choices, and it won't matter because some arrogant flamboyant un-American pansy bitch in San Francisco can fuck it right up.
Oh, dear, you aren't talking about our beloved Elon Musk, I hope. :omg:
 
Vice president during the last banking crash....

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President during today's banking crash....

1679346109112.jpeg
 

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