Credit Suisse, Blackrock and Goldman Sachs all have a few things in common. They are all financial institutions which have some investors very worried as more and more rumors surface about a possible unstable market and problems ahead.
Credit Suisse group (down around 50% so far this year) has some analysts and industry sources saying that they could be on “the brink” of destruction, while others familiar with this matter say that the firm is well capitalized and can survive any conditions the markets throw at it next.
Broader market conditions see to be generally improving so far this week, although the entire market already took a massive hit this year and things are only looking to get worse as more and more data surfaces. America’s gross national debt has now exceeded $31 trillion for the first time ever. (NYT) Data like this coming out is only making the general public more and more anxious about the consequences of big banks, and the FEDs decisions.
The key issue to whether or not some of the biggest banks can or cannot survive could be their strategy to weather the storm the market is currently experiencing.
With the largest institutions in the world utilizing margin and leverage at critical levels during the bull market, the reality of liquidity being removed now is settling in.
The main concern with the situation we are in right now is if or if not banks and creditors have the liquidity to “weather the storm” as broad liquidity continues to tighten as the Fed continues to raise interest rates.
Below is a screen shot from a twitter user sharing some of the biggest banks in the world and how much they hold in derivatives currently.
Blackrock INC is also on the radar as a lot like Credit Suisse, Blackrock has an enormous about of assets under management. Accounting to WIKIPEDIA: “BlackRock, Inc. is an American multi-national investment company based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world’s largest asset manager, with US$10 trillion in assets under management as of January 2022”
As seen down below, Blackrock INC is down around 30% so far this year, which is right on par with the Nasdaq more or less but could concern many investors.
Only time will tell us the fate of all the largest financial institutions in the world and if or if not which of them will make it out of this current market, but stay tuned for what’s happening next.