Domingo Halliburton
Handmade in USA
Something didnt seem right in the action and its been down for months. Probably losses in oil and gas.
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Boiler Room: The Official Stock Market Discussion
Something didnt seem right in the action and its been down for months. Probably losses in oil and gas.
Futuristic Eskimo
All Star
Just bought some SPY puts, April 15th $200 strike, for protection.
Futuristic Eskimo
All Star
Credit Suisse CEO Blindsided as Bank Added to Risky Positions
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said the firm’s traders had ramped up holdings of distressed debt and other illiquid positions without many senior leaders’ knowledge, helping lead to a first-quarter loss in the markets business.
“This wasn’t clear to me, it wasn’t clear to my CFO and to many people inside the bank” when the firm laid out a strategy in October, Thiam, 53, said Wednesday in a Bloomberg Television interview. “There needs to be a cultural change because it’s completely unacceptable,” adding that there had been “consequences” for some employees.
Tidjane Thiam speaks on March 23.
Photographer: Simon Dawson/Bloomberg
The Zurich-based lender’s holdings of distressed debts, leveraged loans and securitized products, including collateralized loan obligations, triggered $258 million of writedowns this year through March 11, after $495 million of losses in the fourth quarter, according to a presentation. The bank said it sold off a quarter of its distressed holdings and more than half of its CLO positions and is exiting some of those businesses.
Trading revenue may drop 40 percent to 45 percent in the first quarter, the bank said. The drop could have been worse, as Thiam said he found out about the positions in January and moved to limit the damage. If he had known the extent of the issues in October, the plans he laid out at that time would have been affected, he said.
“A lot of the problems in the investment bank have been that people have been trying to generate revenue at all costs,” Thiam said in the television interview with Francine Lacqua. “People were reluctant to reduce it because it would’ve exposed their cost problem.”
‘Ugly Ducklings’
In October, Thiam defended the bank’s credit and securitized products units that he said are viewed negatively as “ugly ducklings” because they require so much capital under new rules introduced since the financial crisis. The CEO said shrinking the businesses could create more problems and that he didn’t mind allocating capital to the units if they generate acceptable returns, as they did in 2014, while his head of global markets, Timothy O’Hara, also stood by the units.
“We also intend to defend our highly profitable securitized products and credit franchises,” O’Hara said in October. “Securitized products is one of the strongest client positions of any business in the firm, while also being one of our most consistently profitable businesses within global markets.”
The restructuring plans announced in October have so far failed to convince investors, with the shares losing about 41 percent of their value in that period.
“There was clearly an active decision to retain illiquids that CS took which other firms didn’t take,” Huw Van Steenis, a bank analyst at Morgan Stanley, said to Thiam on the conference call. “It was a surprise to everyone in the first place that you kept them.”
Credit Suisse said Wednesday it’s now targeting 6,000 job cuts in 2016, up from 4,000 it had previously planned, and aims to cut risk-weighted assets in the trading unit by another 20 percent to $60 billion. The firm plans to exit most of the distressed credit, European securitized product trading and long-term illiquid funding.
The CEO said the bank has taken steps to avoid any more surprises.
“I’m confident that we have good processes in place to try and ensure that this never happens again,” Thiam said in the interview. “I can never say never.”
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said the firm’s traders had ramped up holdings of distressed debt and other illiquid positions without many senior leaders’ knowledge, helping lead to a first-quarter loss in the markets business.
“This wasn’t clear to me, it wasn’t clear to my CFO and to many people inside the bank” when the firm laid out a strategy in October, Thiam, 53, said Wednesday in a Bloomberg Television interview. “There needs to be a cultural change because it’s completely unacceptable,” adding that there had been “consequences” for some employees.
Tidjane Thiam speaks on March 23.
Photographer: Simon Dawson/Bloomberg
The Zurich-based lender’s holdings of distressed debts, leveraged loans and securitized products, including collateralized loan obligations, triggered $258 million of writedowns this year through March 11, after $495 million of losses in the fourth quarter, according to a presentation. The bank said it sold off a quarter of its distressed holdings and more than half of its CLO positions and is exiting some of those businesses.
Trading revenue may drop 40 percent to 45 percent in the first quarter, the bank said. The drop could have been worse, as Thiam said he found out about the positions in January and moved to limit the damage. If he had known the extent of the issues in October, the plans he laid out at that time would have been affected, he said.
“A lot of the problems in the investment bank have been that people have been trying to generate revenue at all costs,” Thiam said in the television interview with Francine Lacqua. “People were reluctant to reduce it because it would’ve exposed their cost problem.”
‘Ugly Ducklings’
In October, Thiam defended the bank’s credit and securitized products units that he said are viewed negatively as “ugly ducklings” because they require so much capital under new rules introduced since the financial crisis. The CEO said shrinking the businesses could create more problems and that he didn’t mind allocating capital to the units if they generate acceptable returns, as they did in 2014, while his head of global markets, Timothy O’Hara, also stood by the units.
“We also intend to defend our highly profitable securitized products and credit franchises,” O’Hara said in October. “Securitized products is one of the strongest client positions of any business in the firm, while also being one of our most consistently profitable businesses within global markets.”
The restructuring plans announced in October have so far failed to convince investors, with the shares losing about 41 percent of their value in that period.
“There was clearly an active decision to retain illiquids that CS took which other firms didn’t take,” Huw Van Steenis, a bank analyst at Morgan Stanley, said to Thiam on the conference call. “It was a surprise to everyone in the first place that you kept them.”
Credit Suisse said Wednesday it’s now targeting 6,000 job cuts in 2016, up from 4,000 it had previously planned, and aims to cut risk-weighted assets in the trading unit by another 20 percent to $60 billion. The firm plans to exit most of the distressed credit, European securitized product trading and long-term illiquid funding.
The CEO said the bank has taken steps to avoid any more surprises.
“I’m confident that we have good processes in place to try and ensure that this never happens again,” Thiam said in the interview. “I can never say never.”
Domingo Halliburton
Handmade in USA
SNST claims to have assets over a $1 billion and has a market cap under $5MM.
Domingo Halliburton
Handmade in USA
Starboard trying to kick out the whole board of yahoo.
Domingo Halliburton
Handmade in USA
I didnt realize what a piece of shyt Yahoo's core business is. The only value is the Alibaba stake and Yahoo Japan
Futuristic Eskimo
All Star
Just bought some SPY puts, April 15th $200 strike, for protection.
Kicking myself for going short SPY instead of USO
Does anybody know around what post to refer back to, to get info on starting to invest? Downloaded Robinhood already.
I assume Stocktwits is another app yall use to get info? CNBC?
I assume Stocktwits is another app yall use to get info? CNBC?
Domingo Halliburton
Handmade in USA
I do look at twitter and CNBC. You can refer back to the first post of this thread. I like to point people to reddit.com/r/investing. Check out the sidebar on the right. It has a bunch of thread of people asking the same question you are and has recommended sites and books.
88m3
Fast Money & Foreign Objects
88m3
Fast Money & Foreign Objects
Domingo Halliburton
Handmade in USA
Credit Suisse said Wednesday it’s now targeting 6,000 job cuts in 2016, up from 4,000 it had previously planned, and aims to cut risk-weighted assets in the trading unit by another 20 percent to $60 billion. The firm plans to exit most of the distressed credit, European securitized product trading and long-term illiquid funding.
The CEO said the bank has taken steps to avoid any more surprises.
“I’m confident that we have good processes in place to try and ensure that this never happens again,” Thiam said in the interview. “I can never say never.”
Michael Lewis harps on this all the time. these CEOs have no idea the risks they're bank is running. And half the time they do it while running it into the ground.
Domingo Halliburton
Handmade in USA
where you been? square was the first mover in this space years ago. canucks don't have square?
Domingo Halliburton
Handmade in USA
core business does $3 bill a year.
this whole value in this thing is the alibaba stake and hopefully (for their shareholders' sake) hiding it from US taxes...that's only justification for a $35 billion valuation or whatever it is...problem is you can't short it because it's probably getting bought and this Starboard thing will be a moot point.
seeking alpha is great