Posts Tagged ‘Credit Suisse’

CREDIT SUISSE: 5 REASONS TO STAY BULLISH NEAR-TERM

CREDIT SUISSE: 5 REASONS TO STAY BULLISH NEAR-TERM

Smiling Businessman Looking Down at a Toy Bull on a Table and Imitating Its Horns

Courtesy of The Pragmatic Capitalist 

Credit Suisse recently reiterated their call to buy the dips (see here for the original call).   Despite being bearish overall on 2010, they maintain that the first half of 2010 could be a fairly constructive year for equities (see their full year outlook here).   In the near-term, they continue to like stocks due to 5 primary reasons.

Over the last few months the markets have been roiled by sovereign debt fears, China tightening fears, Fed actions, and bank regulation.  Credit Suisse says these fears are all overblown.

First, they say the fears in Greece are substantially overblown and will not lead to a global bond funding crisis:

1) Fears of a global sovereign credit crisis are overdone: US, Japan and German bond yields have fallen, as has gold (hardly the sign of a funding crisis). The problems in peripheral Europe are akin to those of California in the US: Severe deflation is required, but the problem is confined. A global bond funding crisis will not be seen, in our opinion, until private sector credit growth returns (probably in 2011)—government interest payments as a % of GDP are still low, at 1.3% of GDP in the US. The risk, in our view, is that the UK could end up with a minority government, which might bring forward a UK funding crisis.

Second, CS says the fears about China are overdone.  Growth remains robust in China.  Other countries can only wish to have such a problem.  As of now, it is not a major concern:

2) Worries about China  tightening:  We believe China is likely to grow at around 10% until there is major economic, as opposed to financial, overheating, which would be reflected in a sharp acceleration in wage growth and export price inflation.

A lot has been said about the end of quantitative easing and what will occur in bond markets when the Fed stops buying.  CS says demand for bonds will remain high regardless of the Fed’s actions.

3) The end of QE: We think banks will replace central banks as


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CREDIT SUISSE: BUY THE DIPS – THE BEAR ISN’T HERE YET

CREDIT SUISSE: BUY THE DIPS – THE BEAR ISN’T HERE YET

Courtesy of The Pragmatic Capitalist

Polar bear

Strategists at Credit Suisse entered 2010 with a very cautious tone and an outlook similar to our own – 2010 would be a year of halves.  The first half would be a continuation of the trends that helped the market surge in 2009 while headwinds would build near H2 2010 and result in market declines.   The recent downturn in stocks hasn’t changed their outlook and they view the sell-off as a buying opportunity (see JP Morgan’s similar outlook here as well as Raymond James’ outlook here).

The team’s tactical indicators are mildly bullish at current levels and quickly approaching levels that were buys in 2009:

Our tacticals are mildly supportive of equities:

Interestingly, the % of nyse stocks trading above their 10-week MA (currently at 32%) is around similar levels where market bottomed during recent corrections (end of Oct it troughed at 30%, in early July 09 at 37%). Normally a buy signal is when this indicator falls below 20% but perhaps most of the correction has already occurred??

CS1 CREDIT SUISSE: BUY THE DIPS   THE BEAR ISNT HERE YET

Sentiment data also supports their bullish thesis as the majority of investors remain net bearish:

CS2 CREDIT SUISSE: BUY THE DIPS   THE BEAR ISNT HERE YET

Like us, Credit Suisse sees continuing strong trends in the earnings picture which makes it very difficult to formulate a thesis for a substantial decline in stocks.  Credit Suisse notes the very strong trend in earnings expectations, the high level of “better than expected” earnings and the uptrend in the upgrade cycle.  Bespoke recently noted the outperformance on Monday’s over the last few months.  This has been largely due to the upgrade cycle.  Yesterday alone, there were 41 upgrades of S&P 500 firms versus 13 downgrades according to Briefing.com.  One of the primary reasons we focus a great deal of our research at TPC on the earnings cycle is due to the high influence analysts have on the market.  According to Credit Suisse, analysts on average, upgrade stocks for 11 months prior to the beginning of a new uptrend in the bull market cycle.  This means we could see a strong continued trend in upgrades until Q2 of 2010 – roughly around the same time where we believe earnings outperformance will…
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Credit Suisse Halted, Announces Settlement And $536 Million Fine

Credit Suisse Halted, Announces Settlement And $536 Million Fine (CS)

Courtesy of Joe Weisenthal at Clusterstock/Business Insider

General Views Of Credit Suisse In Frankfurt

It appears to be a settlement and a massive fine being paid to Andrew Cuomo. 

Here’s the full announcement:

Credit Suisse confirms that it is in advanced settlement discussions with the New York County District Attorney’s Office, the United States Department of Justice, the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York, and the Office of Foreign Assets Control ("OFAC"). The discussions relate to a previously disclosed investigation into US dollar payments during the period 2002 to April 2007 involving parties that are subject to US economic sanctions. As part of the settlement, Credit Suisse is likely to pay a total of USD 536 million combined.

Credit Suisse has previously disclosed the investigation by US authorities and that it was conducting an internal review into certain US dollar payments involving countries, persons or entities that may be subject to US economic sanctions. In December 2005, Credit Suisse decided to exit the business in question and subsequently proactively undertook an extensive independent investigation into the Zurich-based payment activity and other practices, working closely and constructively with regulators and US authorities. Credit Suisse’s internal review has now been concluded and discussed with these and other government authorities including Credit Suisse’s main regulator, the Swiss Financial Market Supervisory Authority, FINMA.

Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses, and takes this matter extremely seriously. Credit Suisse has enhanced its procedures to prevent practices of this type from occurring in the future. In particular, Credit Suisse:

  • Terminated its business with all OFAC-sanctioned parties in 2006, including closing its representative office in Tehran;
  • Enhanced its global compliance program by, among other things, appointing a global sanctions compliance officer, establishing competency centres and designating individuals responsible for coordinating and monitoring compliance with sanctions programs and enhancing its global policies, procedures and employee training programs, which will continue to be regularly reviewed for effectiveness; and
  • Enhanced sanctions filters screening designed to cover incoming and outgoing transactions.

While Credit Suisse had recorded provisions for this matter through the end of the third quarter of 2009, it expects to record an additional pre-tax charge of CHF 445 million in the current quarter, which is estimated to be approximately CHF 360 million after tax.

 


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THE RALLY IS COMING TO AN END

THE RALLY IS COMING TO AN END

Courtesy of The Pragmatic Capitalist

Great interview here with Robert Parker, Vice Chairman of Asset Management at Credit Suisse.  He believes the market rally is due for a 10%+ pullback heading into November:

 


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CORRUPTION: Credit Suisse’s Charter MUST BE REVOKED

CORRUPTION: Credit Suisse’s Charter MUST BE REVOKED 

Credit SuisseCourtesy of Karl Denninger at The Market Ticker

Again, "WTF"?

A Swiss bank that used its Cayman Islands’ branch to engage in what a US federal judge has branded “predatory lending practices” is being investigated by the US authorities.

Senior officials of Credit Suisse, Switzerland’s second largest bank, are facing claims that they pocketed millions of dollars by dishing out loans that were impossible to repay.

Impossible to repay? What’s the judge say about this?

Credit Suisse has now been accused of loaning the money in an unorthodox and lucrative deal for the bank that federal bankruptcy judge Ralph B. Kirscher described in May this year as a case of “naked greed” that “shocks the conscience of this court.”

This was a bunch of low-level employees, or even middling staff, right?  Uh, wrong:

Brady Dougan, the Chief Executive Officer of Credit Suisse First Boston, and Hans-Ulrich Doerig, Chairman of the Board of Directors, received the subpoenas along with past and current Executive Board officials and Credit Suisse’s Board.

“Bank officials have testified that Credit Suisse created a Cayman Islands ‘branch’ in 2005 to sell these loans.

“In reality, there was no phone and no staff in the bank’s phony branch.

“They used the Caymans to circumvent US banking laws and to issue inflated loans that Credit Suisse executives called a ‘gravy train’ in internal memos.“

What?!

The allegations here are that this institution’s directors, including the Chairman of the Board and its Chief Executive Officer were both involved in setting up a branch in the Cayman Islands that had no staff and no phones?

This makes two Swiss banks.

First we had UBS that ran a "private bank" for "special" US Citizens who didn’t want to pay their taxes and which, it is alleged, actually conspired with some of them to do things like hide diamonds in toothpaste tubes while crossing the US Border so as to secret out wealth without the IRS knowing about it.

Some few thousand (about 10%) of those "wealthy" US citizens were threatened with being "outed" (and presumably will be) but the rest…. well, there’s no enforcement there, right?

Now we have a judge that has said something…
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NOT YOUR CONVENTIONAL BULL MARKET

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NOT YOUR CONVENTIONAL BULL MARKET

bull, bull marketCourtesy of The Pragmatic Capitalist

Credit Suisse analysts must have been furious Monday morning.  After working all weekend on a brand new upgrade of the U.S. equity markets they needed one more day to touch up the report before issuance.  Lo and behold, Government Sachs beat them to the punch with their own upgrade of U.S. equity markets on Monday morning.  Poor guys because it’s one heck of a good report.  Credit Suisse not only upgraded their outlook on U.S. stocks (new S&P target of 1050), but issued an excellent piece on why this bull run is unlikely to be similar to past bull markets.

They list 6 reasons to be less optimistic in the long-term and why this will almost certainly be a W shaped recession (they currently believe we are on the first V so expect a double dip down in 2010). The 6 reasons will sound awfully familiar to regular readers, but CS does a nice job of condensing them:

1) There is over $7 TRILLION in excess leverage in the system:

cs1 excess leverage is $7 trillion

2) Global housing prices are still too high:

cs2 IMF house price overvaluation

3) U.S. housing inventories could hinder home prices for another 2-3 years:

cs31 US excess housing inventory

4) Global growth going forward is likely to be below trend:

1.   a lower investment share of GDP tends to lead to lower investment growth;
2.   the demographics are clearly deteriorating (the working age population is declining in Europe from next year and is contracting by nearly 1% pa in Japan)
3.   there is more red tape / regulation.

cs4 oecd estimates of potential growth

5) Margins are likely to contract further:

1.   corporate tax rates may have to rise
2.   emerging markets are causing commodity prices (the input costs for developed market companies) to be structurally higher.
3.   more red-tape / regulation.

6) There is no big cap bull market theme:

Each bull market typically needs a different driver. We believe that the new key themes of the new bull market are the Non-Japan Asian consumer and technology.  Yet, European equities don’t have strong exposure to this theme.

Source: Credit Suisse

Photo: Toro Bronce, the statue in Downtown Manhattan in honor of the Bull Financial Markets, originally posted to Flickr by James & Vilija at http://flickr.com/photos/15238715@N00/224568741, at Wikipedia.

 


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Credit Suisse Deemed “Predatory” Lender, Gets The Equitable Subordination Axe

Courtesy of Tyler at Zero Hedge

Credit Suisse Deemed "Predatory" Lender, Gets The Equitable Subordination Axe

In the latest twist of the Yellowstone Club bankruptcy saga, presiding Judge Kirscher ruled that investment bank Credit Suisse which had lent $375 million in first lien debt to the bankrupt club had engaged in predatory lending, and the resulting lien backing the loan would become subordinated equitably subordinated to virtually everyone including unsecured creditors. Can’t be good for those recovery prospects. According to court filings, the smart CS lending syndicate had lent the money to Yellowstone without even requesting audited financials, among other "curious" decisions, all in the pursuit of the $7.5 million lender fee.

Here is what Kirscher had to say about this rare precedent:

"The only plausible explanation for Credit Suisse’s actions is that it was simply driven by the fees it was extracting from the loans it was selling, and letting the chips fall where they may. The only equitable remedy to compensate for Credit Suisse’s overreaching and predatory lending practices in this instance is to subordinate Credit Suisse’s first lien position to that of CrossHarbor’s super-priority debtor-in-possession financing and to subordinate such lien to that of the allowed claims of unsecured creditors."

What is hilarious is the disclosure of how CS determined the transaction fee in YC case: turns out the ultimate fee depended, literally, on a coin toss: CS had asked for a 3% transaction fee, while Timmy Blixseth wanted 2%, and the two settled the matter by flipping a coin to decide the final rate (Tim won). It will be interesting, as many more comparable criminal cases emerge and like disclosure swims to the surface, just how underwriters sat down with issuers in the current market squeeze to determine not only what the fees should be (roll of the die? tea leaves?), but how to skrew the shorts as much as possible. We will be waiting and watching.


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Phil's Favorites

Oil Glut Overshadows Geopolitical Risk In 2020

Courtesy of Nick Cunningham via OilPrice.com

The risk of oil supply disruptions from around the world has diminished, and rising non-OPEC production provides a “solid base from which to react to any escalation in geopolitical tension.”

In its January Oil Market Report, the International Energy Agency (IEA) said that there is plenty of oil sloshing around, despite the U.S. and Iran nearly going to war.

“We cannot know how the geopolitical situation will play out over time, but for now the risk of a major threat to oil supplies appears to have receded,” t...



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Zero Hedge

Oil Glut Overshadows Geopolitical Risk In 2020

Courtesy of Nick Cunningham via OilPrice.com

The risk of oil supply disruptions from around the world has diminished, and rising non-OPEC production provides a “solid base from which to react to any escalation in geopolitical tension.”

In its January Oil Market Report, the International Energy Agency (IEA) said that there is plenty of oil sloshing around, despite the U.S. and Iran nearly going to war.

“We cannot know how the geopolitical situation will play out over time, but for now the risk of a major threat to oil supplies appears to have receded,” t...



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The Technical Traders

Energy Continues Basing Setup - Breakout Expected Near January 24th

Courtesy of Technical Traders

After watching Crude Oil fall from the $65
ppb level to the $58 ppb level (-10.7%) over the past few weeks, we still
believe the energy sector is setting up for another great trade for skilled
investors/traders.

We are all keenly aware that Winter is still
here and that heating oil demands may continue to push certain energy prices
higher.  Yet Winter is also a time when
people don’t travel as much and, overall, energy prices tend to weaken
throughout Winter.

Over the past 37 years, the historical monthly breakdown for Crude Oil is as follows:

December: Generally l...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Citigroup lifted Caterpillar Inc. (NYSE: CAT) price target from $145 to $170. Caterpillar closed at $147.87 on Thursday.
  • UBS cut Twitter Inc (NYSE: TWTR) price target from $37 to $35. Twitter shares closed at $34.19 on Thursday.
  • Morgan Stanley boosted the price target for Yum! Brands, Inc. (NYSE: YUM) from $113 to $118. Yum! Brands closed at $102.16 on Thursday.
  • Jefferies lifted the price target on Ventas, Inc. (NYSE: ...


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Kimble Charting Solutions

Tesla About To Run Out Of Energy Here? Short-Term Peak Possible?

Courtesy of Chris Kimble

Tesla (TSLA) has been screaming higher of late, as very impressive gains have taken place.

Is Tesla about to run out of energy/take a break/experience some selling pressure? A unique price setup is in play, that bulls might want want to be aware of.

This chart applies Fibonacci to the 2016 lows and 2017 highs at each (1). The impressive rally of late has it testing its 161% extension level, based upon those price points.

At the same time, it is hitting its 161% extension level, it finds itself at the top of a 7-year rising channel, with momentum hitting the highest ...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The new year of 2020 has gold is poised to break out higher. Why is gold going higher? Maybe the FED's economists can explain .... or not.

Maybe these could be on the list:

- FED repo hundreds of billions a day.
- ECB made up tools to keep the European banks solvent.
- A sugar high stock market with Apple Inc and Microsoft looking like Bitcoin 2017.
- The US bond market is NOT confirming a strong stock market.
- Corporate profits have flat lined for 3 years while stocks soared each year.
- Knowing an US election year needs stimulus, and a lower US dollar is a first choice.
- China deal, will have a currency element to make it easier to do business. Lower US dollar.



Gold Gann Angle ...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview for decades. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, Foxocracy: Inside the Network&...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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