Credit Suisse Default Swaps Widen, Bonds Sink as Optimism Fades
Comment of the Day

March 16 2023

Commentary by Eoin Treacy

Credit Suisse Default Swaps Widen, Bonds Sink as Optimism Fades

This article from Bloomberg may be of interest to subscribers. Here is a section: 

Support from the Swiss National Bank, which offered as much as 50 billion francs ($54 billion) from its liquidity facility, had brought some temporary relief to Credit Suisse and risk gauges for the broader European banking sector. That fizzled amid comments from the European Central Bank that some of the region’s lenders could be vulnerable to monetary policy tightening, followed by its decision to proceed with a planned half-point increase in interest rates.

The continued selloff signals more action may be needed to arrest a collapse in confidence that’s prompted clients to step back from the Swiss lender and banks to shield their finances from the potential fallout. While the panic surrounding Credit Suisse has so far shown little sign of infecting the broader financial system, any further turmoil would pose a significant risk for markets already on edge amid soaring interest rates and rampant inflation.

Eoin Treacy's view

I have always been intrigued by the idea of Aleph null. It’s the infinity of infinities [ℵ0]. The set of natural number is infinite, but so is the set of even numbers, and so is the set of uneven numbers. There is also an infinite number of times a single number can be divided. Most of the time that is an academic novelty but when it comes to confidence and bailouts infinity matters. 

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