The U.S. and global economy are in a fragile position right now. Many economists believe we’re on our way to a recession, and the JPMorgan CEO says we’re headed toward something worse. Now Graham Stephan, a real estate investor and personal finance expert, has warned that the worst economic collapse could be coming.
In a recent video on his YouTube channel, Stephan discussed signs that two of the world’s major banks are in trouble. Although there are mixed opinions about how bad the situation is, it’s important to be aware of what’s going on and to get ready financially.
Credit Suisse is in bad shape
Credit Suisse is one of the largest banks in the world, with over $1.5 trillion in assets under management. That’s enough to place it among a small group of globally systemic banks, meaning banks that are vital to the global economy. Investor confidence in Credit Suisse has plummeted. The bank’s stock has fallen over 90% from its all-time high, and over 50% in the last year alone. It has gotten to the point where the CEO has been sending out memos to reassure staff, while also explaining the bank is facing a “critical moment.” But what’s going on with Credit Suisse? Over the last decade-plus, the bank has been plagued by legal issues and failed investments. Here are some of the most problematic examples:- Credit Suisse paid a $5.28 billion fine in 2017 for sales of mortgage-backed securities during the 2008 financial crisis. In the settlement, the bank admitted it knew it was selling loans that were likely to fail.
- It forfeited $536 million in 2009 for violating the International Emergency Economic Powers Act.
- It pleaded guilty to assisting U.S. taxpayers in filing false returns and paid a fine of $2.6 billion in 2014.
- It lost $5.5 billion in 2021 from its dealings with the Archegos Capital Management hedge fund. A report found the loss was due to fundamental failures on the bank’s part.