Bank error
Scandal in the Alps
Good morning, skillful investors. This is your Stock Market Rundown for October 11th, 2023. Thanks for joining me once again. Let’s dig in:
TODAY’S TOP STORY: CREDIT SUS 💶
Formerly an iconic institution with a 167-year history, Credit Suisse ceased to exist as an independent public company earlier this year—a pathetic story of a once-giant brought low by reckless risk-taking.
Credit Suisse has been implicated in an exhausting array of scandals—from underwriting Chinese frauds, to laundering money for Bulgarian coke dealers, to destroying documents related to Russian oligarchs’ yachts.
Years of mismanagement and losses erupted into crisis, as stresses in the overall banking system spurred billions in customer outflows. The stock price plunged faster than an Olympic skier descending the Matterhorn.
Credit Suisse, the #2 Swiss bank, agreed to be acquired by UBS, the #1 Swiss bank, for $3 billion. They didn’t so much volunteer to be acquired as they were voluntold to do so by regulators, who moved to prevent contagion seeping into global financial markets.
The bleeding continues at Credit Suisse as it strives to stabilize: its most recent financial report warned of more than $2 billion of imminent losses. UBS is continuing to operate Credit Suisse as a separate bank for now.
Why? For the same reason you might hesitate to drag a couch you found at the side of the road, into your living room… distressed banks can cause the balance-sheet equivalent of bedbugs.
SO WHAT ELSE IS GOING ON?
Disney, suffering from sparse crowds, is offering discounted kids’ tickets to boost traffic. Pro tip: eat your $18 footlong hot dog after you ride the Tron Lightcycle roller coaster.
Japanese robot-makers have designed a badass bot that looks like something out of an 90s anime. Ideal for interplanetary defense, or moving boxes in an Amazon warehouse.
We once feared we’d eaten our last crab rangoon at PF Chang’s, but nature is healing: food service employment has rebounded back to pre-pandemic levels.
Fed chair Jerome Powell says there is a “long list” of risks to the US economy over the next few months. From labor unrest to rising energy costs, the US economy is starting to resemble a bug in search of a windshield.
Strapped consumers are skipping beef to save at the grocery store, but now chicken prices have spiked too thanks to poultry companies idling plants. Lentil alfredo, anyone?
That’s it for today, my friends; see you tomorrow morning. Yours in capitalism, The Axe