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Comment by mnadkvlb | Hacker News Reader

I am a bit surprised and a bit unhappy that last week SNB said they gave a credit line to credit suisse after which i put a bit of money. And in one day after that, they did this merger without a shareholders vote. I would have honestly been happier as a swiss taxpayer and investor in both UBS and CS to lose my money in CS and let this piece of junk fail instead of bundling it to ubs now. Now i get UBS share to ratio 22.48 CS shares to 1 UBS. First thing every investor (including me) in UBS will do tomorrow is to get out of UBS, so even though currently i get say .74 chf per share, i won't be surprised if UBS is down 20% tomorrow or even 50 or who knows how much.

I would have been happier, if they just nationalized the bank and unwound it, even if i got less pennies per dollar invested or even zero. Now we will get another bank that will be holding the baggage. Amazing :|

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Any bet on these banks was very speculative.

You had a huge upside if things worked out.

Instead, you predictably lost the bet and still got paid some compensation in the fire sale.

Not a bad play and not a bad outcome if you went in with your eyes open.

I fully agree, no question about the risk. I would honestly have the investors lose it than depositors.

The thing i am unhappy about, to reiterate myself, is bundling CS to UBS. I am invested in UBS as well, and guess what, i will lose way more on that investment due to this forced merger.

If the govt. just unwound the assets slowly, it won't affect a relatively healthy bank, which was saved in 2008.

I hope i am wrong, but i feel like ubs prices are gonna fall like a knife at the opening tomorrow, unless the SNB starts buying it.

From a distance (I don't live in Switzerland and I'm not invested in any shares) this looks like a drowning man (CS) risking to drown its own "saviour" (UBS).

Bondholders in an otherwise well-capitalised bank being wiped will be interesting. It makes sense. But it also means you should dump bank debt, even if the bank is safe, if they’re vulnerable to idiot Saudis mouthing off.

This changes the maths on the pricing of a lot of the bank bonds - CS had $17bn worth ... and a market cap of only 10bn a few months ago.

https://www.reuters.com/business/finance/credit-suisse-write...

Didn’t think about the inversion in paying off Credit Suisse shareholders. The entire EU CoCo scheme may have just unraveled.

Cocos should have converted to shares, which would have probably doubled / trebbled / more the float, then the proceeds of the sale disbursed. Either way would have been ~10c in the dollar for all parties? Either way a CoCo is not the same product (from the perspective of a buyer) as it was assumed to be last week.

It does look a bit like they have just done the full cycle of insolvency to bankruptcy to selling off the pieces and distributing the proceeds in a 48 hour window. UBS are (effectively) not buying "Credit Suisse", they are buying the post bankruptcy assets (which somehow had a market cap of ~7bn at the close of market trading and Friday).

Obviously for a to-big-to-fail bank you cant go through all the steps.

Does Switzerland not have receivership? The American model of freezing the bank and then dealing with non-depositors later seems such a better model.

I assume the intention is to reassure the market, but it actually looks like blind panic.

This is what blows my mind, i did not expect that. Normally would have expected to get the last crumbs to stockholders. This whole spiel honestly feels super rushed and done in panic.

Of course, I can't blame anyone. Its easy for me to say anything chilling on a couch behind a screen. Cant imagine the stress the regulators and board went through to get this out before monday morning to plug the disaster waiting to happen if CS just went belly up blocking businesses and everyone involved with CS.

Lets hope this stops soon.

My mate told me there was a scruffy looking dog in the 4:15 that was a sure thing, the bookies had it at 750-1 but still, what would they know right?

I am a bit surprised and a bit unhappy that the 10k I bet on that mutt turned out to be a losing bet. Why didn't someone warn me?

I agree with the sentiment.

But on the other hand, I think CS brand and culture is more toxic than its balance sheet.

I would like to be in the paratroopers squad cleaning the CS.

Exactly this. They took one toxic bank and made it into a bigger one. No one wants to hold UBS after this.

Buying CS last week was quite literally buying a lottery ticket… UBS though, yeah.

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