Tag: Credit Suisse

Stocks and Crypto Are Under Attack by Banks and Hedge Funds

Stocks and Crypto

Stocks and crypto are falling.

SPY stock (S&P 500) has fallen below $400 per share and is now down more than 17% this year to date.

Bitcoin is down more than 37% this year and has fallen below $30,000 again.

Banks and hedge funds have been selling off both the stock and crypto markets as the need for liquidity rises.

Will stocks and crypto go back up again?

Let’s discuss it.

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Banks and hedge funds tank the markets

Banks and hedge funds have been responsible for essentially every market crash in history.

But nothing has truly been done about the systemic risks caused by these financial institutions.

Today we’re seeing the collapse of both stocks and crypto.

Massive selloffs in the market are providing liquidity to institutions in order to keep their losing short positions open.

On top of these fire sales, the amount of shorting has increased to hedge against losses from last year’s bull run.

Short sellers lost billions of dollars last year when the ‘meme stock’ frenzy took over Wall Street.

Today, hedge funds are liquidating the markets to keep up with increased margin requirements this new year.

But at what cost?

Investors invested in great companies are losing money not because of business fundamentals, but because of the lack of regulation in the financial system.

Crypto developers say crypto crash was coordinated

LUNA and UST developers said this week’s crash was caused by a coordinated attack from hedge funds and big banks.

It comes as no surprise since hedge funds and big banks have been colluding to short specific stocks in the market.

The fed has opened investigations looking into these serious issues.

Goldman Sachs’ dark pools are currently under investigation, Archegos founder Bill Hwang was recently arrested with 11 criminal counts, and the list goes on.

Subpoenas went out to several hedge funds and banks earlier this year – one of the hedge funds under investigation is Citadel, according to Bloomberg sources.

Word is spreading on Twitter and Reddit and BlackRock and Citadel are responsible for the massive selloffs in the crypto market too.

Deeper due diligence is being done on this matter.

Citadel or not, coordinated attacks on securities is something the government should be taking seriously.

Will stocks and crypto bounce back?

It’s difficult to look ahead when the markets are bleeding, after all you are seeing your net worth drop quicker than it took for it to reach new heights.

If you’re worried about today’s markets, you might have been introduced to a short-term way of investing.

While certain plays could be short-term trades, majority of the market tends to be a long-term speculative game.

We bet that the companies we’re investing in will do great over the span of 10 years or so and let the markets go through the ups and downs, at least in the case of the stock market.

Crypto has and will always have greater potential than it has previously seen.

And crypto heads know this.

Is this the end of the stock and crypto markets?

Absolutely not.

What we’re seeing today has happened several times over the course of both markets.

After a climb, there’s always some setback that scares investors momentarily.

But if there’s something we can always learn from historic patterns, it’s that stocks and crypto have always gone right back up and set even bigger all-time highs.

Is now the perfect time to buy?

is now the perfect time to buy stocks and crypto?
Is now the perfect time to buy stocks and crypto?

It seems both stocks and crypto are having a difficult time finding a bottom.

And trying to time it has always proven that no one can time the markets perfectly.

Searching for a good entry point could just as likely end up hurting you if the markets were to suddenly go through a reversal.

Skilled long-term investors know that when the markets are red, you buy and hold.

Because the price of securities always goes up after a dreadful period of nonstop downtrend.

The upcoming reversal will have you wishing you’d have stocked up on stocks and crypto today.

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Related: Are Institutions Preparing to Close Short Positions in AMC?

Peabody Receives a $534 Million Margin Call: Goldman Steps In

Peabody Margin Call
Peabody Margin Call – Global margin calls will happen in every corner of the financial sector

Leading global pure-play and Fortune 500 company Peabody received a $534 million margin call.

The Australian benchmark coal price is up more than 400% in the past 12 months, hitting $425.

Peabody was not prepared and got slammed with a $534 million margin call.

The sum is more than half the cash the company had at the end of December 2021.

Margin calls are beginning to happen left and right and we’re going to discuss it.

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Welcome to Franknez.com – if you haven’t already joined the newsletter be sure to do that below. I’m publishing daily market news to keep you informed.

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Margin calls in the coming weeks

The Russian-Ukraine conflict is affecting global markets sparking margin calls in every corner of the finance sector.

Russia’s war in Ukraine has further fueled a rally in coal driven by a squeeze on global energy supplies.

Chinese tycoon Xiang Guangda is currently facing an $8 billion margin call after Nickel prices skyrocketed to $100,000 per ton.

Nickel surges to $100,000 per ton

Xiang Guangda tells banks he has no intention in reducing his positions.

The short seller is requiring a coordinated bank bailout including the participation of JP Morgan.

The London Metal Exchange halted trading in nickel on Tuesday morning after prices spiked as much as 250% in two days, driven by brokers rushing to close out short positions after holders of bearish bets struggled to make margin calls.

Credit Suisse News: Margin call tension rises

Credit Suisse margin call

The Swiss bank Credit Suisse is also imposing margin calls on investors exposed to Russia.

The invasion of Ukraine has left wealthy individuals invested in Russian assets with frozen accounts and demands for more collateral.

Tension really began to pick up when Russia was removed from SWIFT.

Banks in the United States are losing cash quick.

Citigroup disclosed in its annual report that it has nearly $10 billion in exposures to Russian counterparties, including loans, reverse repo agreements and cash deposits. 

Morgan Stanley’s next gen emerging markets fund (MFMIX) has also been exposed to Russia with nearly $16.6 million frozen due to Russian sanctions.

Schwab’s fundamental emerging markets large company index ETF (FNDE) has also been affected with 12.7% being exposed to the Russian stock market.

Peabody receives a 10% loan from Goldman

Peabody receives a 10% loan from Goldman Sachs
Goldman Sachs steps in with 10% loan – Peabody Margin Call

Peabody shares plunged 17% after announcing the margin call, taking a chunk out of the gains they had made in recent months as the coal market boomed.

Margin calls could increase if the coal market moves higher.

Senior VP for coal markets at Rystad Energy Steve Hulton says prices could reach $500 per ton.

Peabody arranged a $150 million credit line with Goldman Sachs although the bank announced in 2019 that it would phase out financing for coal.

Peabody’s margin call is only a glimpse of what’s coming to various institutions in the markets worldwide.

And in the states, retail investors are waiting for hedge funds’ number to be called.

Will banks be able to inject liquidity into hedge funds?

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As banks and hedge funds’ assets continue to lose their value, will banks be able to inject liquidity into hedge funds when they need it?

Leave a comment below with your thoughts.

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Credit Suisse News: Margin Call Tension Rises in Global Markets

Credit Suisse Margin Call
Tensions rises – Credit Suisse News – Credit Suisse margin calls investors

Credit Suisse is triggering margin calls on clients that use Russian resources as collateral.

With Russian assets falling in value, it’s causing a domino effect that’s going to affect all global ties to Russia.

Margin calls are going to affect banks and financial institutions to close and liquidate their positions.

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Welcome to Franknez.com – margin calls are on the horizon. And it’s going to tank the stock market even lower.

Let’s dive right into it!

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Wealthy individuals face frozen accounts

wealthy individuals face frozen accounts

The invasion of Ukraine has left wealthy individuals invested in Russian assets with frozen accounts and demands for more collateral.

In a margin call, banks ask investors to add cash or securities to a portfolio that typically includes borrowed funds when the market value drops below margin requirement.

The bank can forcibly liquidate clients’ holdings if they are unable to deposit the funds.

Credit Suisse told PBI that its position in the matter remains unchanged.

“Credit Suisse serves its clients while complying with all applicable laws and regulations, including any sanctions from relevant authorities,” the firm said.

This isn’t affecting just Europeans; Credit Suisse is imposing margin calls in the U.S. too.

How is this affecting investors in the U.S.?

Getting rid of Russian assets is a big problem for hedge fund managers in the U.S.

Russia’s central bank retaliated by banning Russian brokers from selling securities held by foreigners.

Furthermore, Russian Prime Minister Mikhail Mishustin said the country will temporarily stop foreign investors from selling Russian assets.

Hedge funds in the U.S. holding Russian assets are in a big mess right now.

Margin call tension is causing liquidation in many areas of the market.

U.S. hedge funds will be forced to liquidate positions or hedge their plays, further overleveraging short positions.

Financial institutions in the U.S. exposed to Russia

Morgan Stanley - Credit Suisse AMC Margin Calls
Morgan Stanley – Credit Suisse AMC Margin Calls – Credit Suisse News Bloomberg

Citigroup disclosed in its annual report that it has nearly $10 billion in exposures to Russian counterparties, including loans, reverse repo agreements and cash deposits. 

Citigroup stock is down more than 11% year-to-date.

Morgan Stanley’s next gen emerging markets fund (MFMIX) has also been exposed to Russia.

Nearly $16.6 million is frozen due to Russian sanctions.

That’s 13.6% of the total net assets of $122 million in the fund.

Schwab’s fundamental emerging markets large company index ETF (FNDE) has also been affected.

Out of the $4.8 billion in assets, 12.7% have been exposed to the Russian stock market.

Related: Regulators are taking Morgan Stanley and hedge funds to court

Credit Suisse aids U.S. probe of rivals Morgan Stanley and Goldman Sachs

Hedge fund FBI raids
Morgan Stanly and others under investigation – Credit Suisse AMC relations? Credit Suisse News Bloomberg

Credit Suisse is trying to help the U.S. Department of Justice build a case to block trading against rivals Morgan Stanley and Goldman Sachs, REUTERS.

The bank delivered a presentation to the U.S attorney’s Office in New York flagging issues leading to the collapse of Archegos Capital.

Archegos Capital was a private family office, also known as unregulated hedge funds, that caused banks to lose billions of dollars.

Banks and hedge funds are currently under investigation by the Justice Department for illegal trading activities.

Two of these banks under investigation are Morgan Stanley and Goldman Sachs.

One hedge fund has been raided by the FBI for flooding the market with fake orders to drive the price of stocks down.

It comes as no surprise Credit Suisse is imposing margin calls on investors but also attacking its rivals.

Credit Suisse news Bloomberg

What does this mean for shareholders?

Leave your thoughts in the comment section below.

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