This is not an obituary – but a story about markets. Hans-Jeorg Rudloff, who passed away earlier this week, was the dominant figure of the Eurobond market. His insights and vision were extraordinary – understanding how markets worked, how to dominate them, and setting the foundations for today’s $120 trillion global market!

UBS’s new $3.5 Bln ATI CoCo Bond was 10 times oversubscribed. It conclusively demonstrates the market not only has no memory, but very little understanding either. This is not a good time to be the very bottom of the bank subordination ladder.

It’s International Talk Like A Pirate Day, which will make it interesting for UBS trying to persuade once-bitten, twice-shy investors to buy new AT1 CoCo Bond after what happened to Credit Suisse investors.. “Arrr… You know it makes sense, young Jim-me-lad… Shiver-me-timbers… “

First Republic’s numbers show how close it came to failure – it’s a saga of stale management and bad banking, but reinforced by the pace of rumour and sigh on social media. Will it happen again? Blain’s Rules on Bank Investment may help you avoid the bad’uns..

Just how vulnerable are banks to further contagion and crisis? With inflation still running loose, central banks still set to hike, while consumer and corporate pressures mount, the banking crisis may only just have started.

The “rescue” of Credit Suisse, thereby averting a European banking  crisis, is getting less comment than the nixing of its $17.5 bln of CoCo Bonds. I’ve been warning about CoCos since 2011. Finally I got something right!

Credit Suisse is in the headlines for all the wrong reasons. Confidence in the bank is zero. The Swiss National Bank has provided a backstop, but a sale looks likely of the bank that just can’t get it right.

There are lessons from the public humiliation of Kwasi Kwarteng for governments and corporates around the globe. If we are going to address the looming economic crises – then governments, central banks and financial instutions need to be on the same page. 

Markets were shaken but unstirred by the collapse of Greensill and the Archegos unwind trades. Credit Suisse is the ultimate loser of the two scandals – reputationally damaged and holed below the water line.  The bank is paying the price of years of flawed management, poor risk awareness. and its self-belief it was still a Tier 1 global player. Its’ challenge is to avoid becoming the Deutsche Bank of Switzerland – which it will struggle to do without a radical and unlikely shakeout.

As Greensill and Archegos roil markets and cause losses, they beg the question – who is next? Why is 2021 turning into the year the scams are unravelling? Will leverage on leverage trigger wider implosion or will it be something else, like liquidity?