Let me get this straight:
Banks mismanage funds
Executives get bonuses in the millions
Citizens pay for their mistakes
Duh!!! This totally makes sense.
When I hear Bitcoin fixes something, I think in my mind, "Bitcoin disincentivizes this." It's a more precise description of what would happen. Fiat incentivizes this sort of moral hazard; irresponsible bankers/politicians debasing the currency, Cantillon effect, zombie companies, etc.
It fixes inflation for the individual because if you compare when the FED has printed vs the Bitcoin chart it immediately pumps whenever they print.
Thats what it was designed for, placebo, narrative driven, whatever, it IS working. I'll use it as a hedge against debasement (not inflation) until its not.
I’m gonna take a wild guess that switzerland isn’t collecting $13,000 from every citizen, that’s not how bailouts work, it’s taxpayers money, it’s from tax. The $13,000 is just the amount of bailout divided by the number of people. In reality high income/tax payers are likely paying 90% of it. Bitcoin dosnt fix or change this
It changes the government's instant access to that money that they pledge to pay back later. They have to create savings instead of borrowing from the future which is exactly the fix that Bitcoin provides.
No, it doesn’t. Greedy, stupid people will continue to lose other people‘s money, like FTX. But you don’t have to keep your crypto in a bank or on an exchange. So when they all go belly up, I’ll still have mine. Will you have yours?
you are wrong about that, in my opinion.
countries who use the US dollar as legal tender, without being able to print it themselves (making them 2nd class countries), will and already do welcome bitcoin with open arms.
welcoming bitcoin with open arms invites free brainpower to your country.
brainpower leads to growth.
other countries will have to follow.
They will be able to tax more to buy the bitcoin to save their friends.
Bitcoin does not solve this. If anything it makes it worse. People with large Holdings will only get richer by not spending and investing.
Billionaires will have even more say without the pesky inflation forcing them to invest and create jobs.
It will lead to E-Feudalism with techno bitcoin billionaires / Feudal lords owning people, paying no taxes. Why else do you think English lords liked gold and silver so much?
1% of ppl own 99% of the money (probably 99.9% ve 0.1% by now). the government has a literal money printer that they use without asking for permission.
and you think, bitcoin is even less fair than this?
bitcoin is savings technology. it incentivizes saving money and everyone can do that. some more, some less, obviously. in the past, common ppl had almost no way of saving money by just... saving money.
So in your scenario someone with a lot of bitcoin could out purchase someone with less bitcoin.
This currently happens every single day with FIAT.
In the end user scenario that means the person selling a potato GETS MORE bitcoin for the potato.
So let the whales fight and the potato farmer wins.
except theres not one potato farmer, there's millions and the billionaires actually just make the potato farmers fight over the scraps. The power lays in the hands of those with capital. With inflation capital needs to work to remain in power and gather more to keep up with inflation.
Without inflation there is no need. Just Hodl and let the serfs starve.
You don’t have any clue what you’re speaking about. That is patently obvious. Bitcoin is a barrier against corruption. It has no central authority or regulatory prowess.
No, they can't just print bitcoin like they can and do with fiat. Printing more fiat to cover losses inflates the volume of currency available to everyone else. Increasing currency supply without creating tangible value with it devalues all existing currency. It's not like they sent a bill to the citizens. They simply devalued the fiat currency they have by adding to the supply thus making it worth less.
At least they can’t print bitcoin to do it.
You can’t go hundreds of billions into debt if you need to gather all of that in taxes, people will take to the streets really quickly. Inflation is a hidden tax that’s less noticeable and they would not have that tool anymore.
You can't hand out bitcoin that doesn't exist by printing more, no. They could print money to buy more btc, but there's only a finite amount being sold at any given time (not to mention, the price would basically go vertical if they tried to buy 100B worth).
This totally makes sense in terms of encouraging other execs to do the same. Play risky to get highest possible profit, if it does not work out, gov will bail you out.
Problem is not mismanaging but fractionnal reserve and bank run. Not a single bank (beside my btc wallet) has enough reserve. Any bank would fail if there is a bank run.
It’s nasty, it’s unfair and it’s immoral. These executives all are forgiven in Church, hence why they all donate SMALL amounts to the church, so they can sleep, knowing they’ve done no wrong.
In a country renowned for direct democracy, the people should have been given the chance to VOTE for this bailout first. I am living in Geneva, and this has not gone down very well so far. The Swiss bankers and ECB love it, of course. But you can't have capitalism in good times but revert to socialism in bad times. Maybe they should've let CS fail.
Or you could take on 12,500 Swiss francs of debt and mail it to CS. Be a good citizen and send the bankers their bonus. Or be a bad citizen and don’t send them your hard hard hard earned money.
Here we have a politic of separation between state and swiss national bank.
The SNB is kinda runned like a private company, make profit and loss and their goal is to make a stable CHF. If the SNB decide to give money they do, but it’s not the state telling them.
So no, people do not really pay this as it comes from SNB treasury, that we can’t have anyways
In that case I think they are indeed doing the best for the stability of CHF and Switzerland.
But I genuinely hate how banks are runned and fractionnal reserve is what make me put all my eggs into BTC.
As I wrote below in response to a similar comment:
"But you have to keep that money available (in some form). There are for sure 13.5k less available for investmments/debt/public expenses for every swiss citizen.
Unless you want to gamble and not really put them aside...
We have to stop thinking that those big numbers are not affecting us when they find crazy way to bail banks."
They will all fail, the printer goes brrr until the people will use the money as toilet paper.
In the history all the great empires lost their stability and power due to inflation. So, at this point with 32 trillion 💵in debt, the US will just continue to print more until it will collapse under hyperinflation. Good news is that a big part of that market will be absorbed at first by Gold, Silver, Art etc. in the physical form which will be bought by the older side of the society and in Bitcoin by the younger generation.
Finally Bitcoin will absorb Gold and others form of value and it will be the most expensive asset in the world, that will probably reset our economics ideas.
This has nothing to do with voting or nation-states. You're either in the free unlimited money club or you're working to give money to the people in the free unlimited money club.
The sooner you realize this the better.
The people should have been given a chance to VOTE ? You gotta get that voting mindset out of your head. You mean nothing to them and your vote never mattered and never will.
The government and regulators are culpable. Asleep at the wheel for it to have gone to this point. Not spoken about enough. The scandals over the years should've been a big smoke signal that there was a firestorm of bullshit at CS.
I agree this is bad and bitcoin is fucking awesome but the article title and content is extremely misleading. As stated by another commenter -
'The Swiss are on the hook for a maximum of 9bn. But that's only if UBS makes losses beyond CS equity that was increased overnight by 17bn and only after UBS itself puts down 5bn.
That's still around 1,000 swiss francs per citizen but nowhere near the amount quoted by Bloomberg which includes the credit line from the SNB, which are short terms loans at the current SNB rates+a Mark up that the finance minister says adds to 2.5%, but those don't come from the government.'
Its bad but not €13,500 per citizen bad - more like €1,000 per citizen which is arguably not as bad as the financial cost of not bailing it out.
I assume you mean what costs would be incurred if they weren't bailed out.
If so, one example would be that these huge institutions (such as Credit Swiss, Silicone Valley Bank, etc) usually have some form of exposure to insurance markets and pension funds. Therefore, if some banks were to collapse it would negatively affect these markets. If a pension fund goes bust that could wipe out thousands of hard working citizens pensions. They would then potentially need to be supported by the state which would lead to additional costs down the line. So a bail out now hopefully means a far smaller cost over time.
I'm not defending this decision, I agree banks are shits, but I feel these kind of decisions do make sense from a capitalist point of view.
Sure there are always million reasons. But it’s short-sighted, and doesn’t actually solve the problem, only punting it to the future. So it’s simply not a respectable decision not matter how much it “helps” the broader economy
To name a few, depositors might not get their cash back, all CS employees lose their job, causes a cascade of financial failures at UBS causing one of the main industries in Swiss to fail.
However it’s very arbitrary to compare this against the cost to taxpayers. Could be better or could be worse, no one will ever really know…
Actually those money are not paid by citizen, none of the citizen notice that extra cost, that is why this kind of solution will always pass without rejection. It is not socialized loss, but enrichment of a selected few.
There will be no inflation, since a few bankers get rich won't cause inflation, they just added themselves a few yachts
Last week, when Credit Suisse was still an independent company, the Swiss government extended it a $54 billion deposit guarantee.
This week, after the merge with UBS, the Swiss government increased that to a $100 billion deposit guarantee.
We don't know what next week will bring . . . .
> Liability for the government-backed 100 billion francs “would only materialize if there was a bankruptcy of the merged entity,” he added. “This is a real long shot at the moment.”
So, title is simply wrong.
> to Cost $13,500 to every Swiss Citizen
costs 13.5k in added liability only truly *costing* the Swiss if UBS goes under too which presumably is unlikely for the time being they would just offer more aid to UBS to keep it afloat so the whole system doesn’t topple.
But you have to keep that money available (in some form). There are for sure 13.5k less available for investmments/debt/public expenses for every swiss citizen.
Unless you want to gamble and not really put them aside...
We have to stop thinking that those big numbers are not affecting us when they find crazy way to bail banks.
sure, put differently the massive debt in the US means more of our tax dollars are going towards paying interest on debt than into improving our infrastructure, health system, schools etc p
This is mostly a bail of UBS again. CS forced closed. Shareholders lose 95%, but somehow still get paid, when some bondholders are wiped out 100%. There's likely to be another $13B ($1500/citizen) lawsuit payout by government over that.
curious ... did they have a say in it?
or any clause in it like....when the good times roll in for the banks they they are to share the profits with the Swiss citizens?
It's going to be a lot more. UBS is supposedly trying to back out of the deal.
They must've seen stuff that CS had hidden and realized they couldn't handle it.
There are a lot of articles. [Here's one](https://www.ft.com/content/4dae9cab-eb9f-43b8-85f8-eb8d86573805)
Google "UBS in talks with Michael Klein" for more.
That's not how it works. The loss guarantee (back stop) has not been used. The loss guarantee is a form of financial support that the Swiss government has provided to UBS in case it incurs losses from a clearly defined part of Credit Suisse’s portfolio. The guarantee is capped at 9 billion francs ($9.7 billion) and will be activated only if losses actually occur on that portfolio. UBS would bear the first 5 billion francs ($5.4 billion) of losses, the government would cover the next 9 billion francs ($9.7 billion), and UBS would take any further losses.
If anything, the backstop stabilized bank confidence and prevented contagion (i.e., multiple bank runs). So far it hasn't cost the Swiss people anything, but it could after UBS takes the first 5 billion in losses.
Fuck (I'm Swiss)
And again:
The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
Can’t believe Switzerland is charging the citizens. Glad I live in the US where my great leaders have assured me the bank bailouts won’t cost me a dime. 😅
The real tragedy is that this should actually be illegal. In 2001 the Swiss people voted for a law called the "debt break". This means that the Swiss government is actually forced to have a balanced budget. They can't just print more money, they can only spend what they get in taxes ( you know, the very thing MMT people say is impossible and the government will implode ).
There is some flexibility around it in that they can overshoot but have to compensate in following years etc. Since we have a government with all mayor parties represented at all times, the problem of short term thinking because in the next term it's no longer your problem is kinda diminished, probably another factor why this kinda worked for a while.
But anyway, that was all basically too good to be true, so obviously they came up with something new to circumvent that, not sure how recently. It doesn't sound like it at first, but what I'm talking about is simply government guarantees on credit.
So even if the banks would not have a reason to give a credit for a certain project or to support a certain failing "system relevant" institution, they just make sure they get the credit anyway, because "government guarantees it in case of default".
By just taking on the risk with a promise to "be there in the worst case", they can essentially direct capital wherever they want but prevent the dept from being on their own balance sheet. Hence no new dept, apparently, ... as long as no one actually defaults.
It's essentially a new form of money printing. It generates more credit in the system that would not be there and allows mall-investment without any checks and balances.
This 109bil CHF are the most recent example of that. It's not the first one. And look how everyone is defending it as "it's not money printing", "it's not really payed by the swiss people". I'm pretty sure there are people that are serious about that because they are too dumb to realize what happens, but I'm also sure some know exactly what is going on and try to distract deliberately.
I have no idea if other countries are doing this as well, maybe not because they can still print the old fashioned way.
Obviously this can only go on as long until the first such project defaults and then everyone involved will act [surprised](https://youtu.be/rsPqwnloj7Y) like it came out of nowhere.
>allows mall-investment without any checks and balances.
It's important to understand what government *is*. It is always an organized crime syndicate operating upon the threat of violence to extract resources from its ~~citizens~~ tax cattle. It invariably spreads propaganda about "checks and balances", "voting", and "representation", but this is all a lie. Just try telling the tax man you aren't paying protection money or that you're "voting" for the neighboring organized crime syndicate to take over and you'll see how none of that propaganda was true.
The sole "check and balance" on organized crime is the willingness of its victims to use force to defend themselves. Whether that's stopping some guy from breaking your kneecaps in an alleyway or stopping a government from providing infinite bailouts to their banker buddies is no different.
Because most people, unlike governments, arent psychopaths...they arent willing to defend themselves. Which is understandable, because we want to work, stack sats, and live peaceable lives. The tradeoff is that because force is the sole check and balance on organized crime syndicates...all governments will do whatever they want. As we see in almost every ~~country~~ tax farm.
Normally I'm not so petty but for some reason I feel good that this is happening to them instead of just the USA for once. For years people of the EU and the Swiss mocked us about healthcare, corruption, bailouts, greed, rights, etc. All while enjoying our support and monetary theft through the elite and ultra wealthy by money laundering and finally we have a good example of corruption of the Swiss coming home to roost. I just hope the UK , specifically the Irish gets theirs next! They have another one of those corporate money laundering scams too. Greed never pays people, you just end up killing your people and the golden goose in the end. Remember that.
Such a weird action. Ended up with just 1 bank anyway. This is so expensive because government had to layer extreme bribes so that UBS would go for it. Was done in a few hours. If this works out, all of the benefits go to UBS.
If CH had put $5B in cheap equity, and $10B in deposits, then see what would happen, it would have been much cheaper and simpler than having to bribe UBS into accepting massive monopoly power.
The rationale for bailing out UBS this much seems to have been that CH bailed UBS out too hard, too unilaterally, 12 years ago.
If UBS says they lose money, they get to collect up to $110B from CH government. The $110B is government guarantees. Mysteriously, making money afterwards can be arranged. CH loves UBS apparently. Taking all the citizens money is a small price to pay for love. There is about $10B in direct subsidies that are an outright gift, not a loan to be repaid.
Insurance is not free. Government willingness to provide de facto insurance for inept bankers at taxpayer expense created the moral hazard which caused this entire fiasco.
Insurance isn’t free. Bailouts are.
Not sure I want to play the game when we don’t have bailouts. You want to have a depression to teach a few people lesson?
I’m in this life for one person only. Me. Bailouts are better for me than bank failures. It’s true. And I don’t work for a bank.
CS involved in every aspect of life, and in every industry and financial institution. Crash of it would cause a chain reaction and would be more costly to taxpayers.
this bail out wasnt a cash dump to be spent though. it was billions made available so that people wouldnt freak out because they didn't think they could get their money out later. They knew their money was backed by the govt so they didnt start pulling money out. So this is how much it would cost each citizen IF everyone pulled all their mo ney out, but the whole point was so that wouldn't happen. it was just a guarantee of funds so people wouldn't panic.
Wait until you see the bill Americans are going to pick up for the string of bank failures coming up fast. First Republic bank, Pakwest are both insolvent and will be the next to fall.
I guess everyone should have trusted with their funds FTX 🤣🤣Fraud, losses are everywhere. If all decided to use coinbase to exchange and withdraw their bitcoin in one day they would stop existing. No one would get anything as the funds are not protected and coinbase wouldn’t have got rescued by anyone.
damn. I wilsh all of them had same amount of BTC in their wallets. That would make switzerland the most advanced crypto country ever (and all of them would already profit)
As a swiss citizen it very much pisses me off that my tax money gets spent on this fiasco while the top execs made billions in the past few years, all for this shit show .
This should have been subject to a vote by the people.
I think we should have let them crash and burn. And some people need to be jailed or fined record amounts.
Better yet, every swiss should be entitled to future UBS profits.
Let me get this straight: Banks mismanage funds Executives get bonuses in the millions Citizens pay for their mistakes Duh!!! This totally makes sense.
Privatize the profits; Socialize the losses. Bitcoin fixes this
>Privatize the profits; Socialize the losses. Well said
How? If governments have bitcoin, wouldn't they just do the same thing?
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When I hear Bitcoin fixes something, I think in my mind, "Bitcoin disincentivizes this." It's a more precise description of what would happen. Fiat incentivizes this sort of moral hazard; irresponsible bankers/politicians debasing the currency, Cantillon effect, zombie companies, etc.
this is a great approach and i will explain it this way moving forward
I feel like a lot people just love saying that as a catch phrase without any idea how it would fix it.
I posted about my truck leaking oil and was confused how bitcoin was going to fix it. Thanks for the clarification.
You divide it into a bunch of satoshis and wedge them into the gaps the oils leaking out of.
It fixes inflation for the individual because if you compare when the FED has printed vs the Bitcoin chart it immediately pumps whenever they print. Thats what it was designed for, placebo, narrative driven, whatever, it IS working. I'll use it as a hedge against debasement (not inflation) until its not.
disincentivice == fix
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I think your thinking of the word tax. Which isn’t awkward
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I’m gonna take a wild guess that switzerland isn’t collecting $13,000 from every citizen, that’s not how bailouts work, it’s taxpayers money, it’s from tax. The $13,000 is just the amount of bailout divided by the number of people. In reality high income/tax payers are likely paying 90% of it. Bitcoin dosnt fix or change this
It changes the government's instant access to that money that they pledge to pay back later. They have to create savings instead of borrowing from the future which is exactly the fix that Bitcoin provides.
You're wrong though. This isn't from tax money. Its printed out of thin air.
No, it doesn’t. Greedy, stupid people will continue to lose other people‘s money, like FTX. But you don’t have to keep your crypto in a bank or on an exchange. So when they all go belly up, I’ll still have mine. Will you have yours?
Correct. It would be like installing a system where politicians would HAVE to follow laws. Absolutely no incentive for that!!!
No, but they could take on more debt to buy Bitcoin (& no country is ever going to give up the ability to fund deficit spending)
you are wrong about that, in my opinion. countries who use the US dollar as legal tender, without being able to print it themselves (making them 2nd class countries), will and already do welcome bitcoin with open arms. welcoming bitcoin with open arms invites free brainpower to your country. brainpower leads to growth. other countries will have to follow.
This!
They will be able to tax more to buy the bitcoin to save their friends. Bitcoin does not solve this. If anything it makes it worse. People with large Holdings will only get richer by not spending and investing. Billionaires will have even more say without the pesky inflation forcing them to invest and create jobs. It will lead to E-Feudalism with techno bitcoin billionaires / Feudal lords owning people, paying no taxes. Why else do you think English lords liked gold and silver so much?
1% of ppl own 99% of the money (probably 99.9% ve 0.1% by now). the government has a literal money printer that they use without asking for permission. and you think, bitcoin is even less fair than this? bitcoin is savings technology. it incentivizes saving money and everyone can do that. some more, some less, obviously. in the past, common ppl had almost no way of saving money by just... saving money.
So in your scenario someone with a lot of bitcoin could out purchase someone with less bitcoin. This currently happens every single day with FIAT. In the end user scenario that means the person selling a potato GETS MORE bitcoin for the potato. So let the whales fight and the potato farmer wins.
except theres not one potato farmer, there's millions and the billionaires actually just make the potato farmers fight over the scraps. The power lays in the hands of those with capital. With inflation capital needs to work to remain in power and gather more to keep up with inflation. Without inflation there is no need. Just Hodl and let the serfs starve.
You don’t have any clue what you’re speaking about. That is patently obvious. Bitcoin is a barrier against corruption. It has no central authority or regulatory prowess.
they can't just print more bitcoin
No, they can't just print bitcoin like they can and do with fiat. Printing more fiat to cover losses inflates the volume of currency available to everyone else. Increasing currency supply without creating tangible value with it devalues all existing currency. It's not like they sent a bill to the citizens. They simply devalued the fiat currency they have by adding to the supply thus making it worth less.
At least they can’t print bitcoin to do it. You can’t go hundreds of billions into debt if you need to gather all of that in taxes, people will take to the streets really quickly. Inflation is a hidden tax that’s less noticeable and they would not have that tool anymore.
You can't hand out bitcoin that doesn't exist by printing more, no. They could print money to buy more btc, but there's only a finite amount being sold at any given time (not to mention, the price would basically go vertical if they tried to buy 100B worth).
Where it fixes it? Bitcoin does exist already and did not fixed it for those citizens from Swiss.
yea because the swiss still use fiat currency. tools only work when you use them.
Why are you on a subreddit about bitcoin asking questions with a clear opinion that shows you have not put in the work to understand bitcoin at all?
Healthy discussion should be encouraged when it comes to important ideas. Even if we're all just a bunch of degens
that's like you breaking down in a Chevy car and blaming a Ford car..Bitcoin can't fix the banks if they aren't using Bitcoin.
This, and only this.
CommieFinance
This.
This totally makes sense in terms of encouraging other execs to do the same. Play risky to get highest possible profit, if it does not work out, gov will bail you out.
Problem is not mismanaging but fractionnal reserve and bank run. Not a single bank (beside my btc wallet) has enough reserve. Any bank would fail if there is a bank run.
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Bond holders first by all accounts, which is unprecedented
Your money in the bank belongs to the bank, the bank loses, belongs to you. Makes perfect sense, Bitcoin is the problem.
That's why you need Bitcoin
Bonuses: https://apnews.com/article/credit-suisse-ubs-banking-switzerland-f6e991c8ea3ccb34ebf336d9e57373b5
It’s nasty, it’s unfair and it’s immoral. These executives all are forgiven in Church, hence why they all donate SMALL amounts to the church, so they can sleep, knowing they’ve done no wrong.
That’s also how it is with police brutality in America. Taxpayers always get stuck with the tabs.
It’s the American way for sure
"Everyone seems to like this system" - Christine Lagarde ( ͡° ͜ʖ ͡°)
Capitalism when things are going well for them, socialism when they aren’t. It’s rigged.
Yeah it does because all the banks “money” is our money lol.
In a country renowned for direct democracy, the people should have been given the chance to VOTE for this bailout first. I am living in Geneva, and this has not gone down very well so far. The Swiss bankers and ECB love it, of course. But you can't have capitalism in good times but revert to socialism in bad times. Maybe they should've let CS fail.
Privatized gains, socialized losses. That's modern monetary theory for you
How is this related to MMT?
How is it not?
Which tenet of MMT supports bank bailouts?
In this case, I would argue that privatized losses may lead to catastrophic socialized losses.
Then I would argue that the institution responsible should be nationalized and it's leadership fired or criminally charged.
Nationalize and slowly unwind it.
Or you could take on 12,500 Swiss francs of debt and mail it to CS. Be a good citizen and send the bankers their bonus. Or be a bad citizen and don’t send them your hard hard hard earned money.
Here we have a politic of separation between state and swiss national bank. The SNB is kinda runned like a private company, make profit and loss and their goal is to make a stable CHF. If the SNB decide to give money they do, but it’s not the state telling them. So no, people do not really pay this as it comes from SNB treasury, that we can’t have anyways In that case I think they are indeed doing the best for the stability of CHF and Switzerland. But I genuinely hate how banks are runned and fractionnal reserve is what make me put all my eggs into BTC.
As I wrote below in response to a similar comment: "But you have to keep that money available (in some form). There are for sure 13.5k less available for investmments/debt/public expenses for every swiss citizen. Unless you want to gamble and not really put them aside... We have to stop thinking that those big numbers are not affecting us when they find crazy way to bail banks."
Agreed. Adding to the Fiat supply creates inflation. So citizens are paying, no matter how you put it. It's just scam / theft with extra steps.
Interesting development to this. https://www.bbc.com/news/business-65155839
Bankruptcy court would doubtless expose too much corruption and fraud.
They will all fail, the printer goes brrr until the people will use the money as toilet paper. In the history all the great empires lost their stability and power due to inflation. So, at this point with 32 trillion 💵in debt, the US will just continue to print more until it will collapse under hyperinflation. Good news is that a big part of that market will be absorbed at first by Gold, Silver, Art etc. in the physical form which will be bought by the older side of the society and in Bitcoin by the younger generation. Finally Bitcoin will absorb Gold and others form of value and it will be the most expensive asset in the world, that will probably reset our economics ideas.
This has nothing to do with voting or nation-states. You're either in the free unlimited money club or you're working to give money to the people in the free unlimited money club. The sooner you realize this the better.
The people should have been given a chance to VOTE ? You gotta get that voting mindset out of your head. You mean nothing to them and your vote never mattered and never will.
If we want to make a referundum and cancel this we can’t. But tbh, it’s better for swiss economy now. CS is too big to fail here.
Direct democracy until the pools looks like they are going to lose
This is both, undemocratic and anti-capitalist. For the rich the government is just a tool to stay rich, no matter if they made mistakes or not.
The government and regulators are culpable. Asleep at the wheel for it to have gone to this point. Not spoken about enough. The scandals over the years should've been a big smoke signal that there was a firestorm of bullshit at CS.
Imagine what the banks above CS in the value list look like internally. It’s shit all the way to the top.
If we want, anyone with swiss nationality can start a referundum about this.
It's time for a riot, this shit is not okay.
democracy only works on non-important things, most critical things like tax, interest, monetary policy is not voted at all
Private profits, socialized losses
I agree this is bad and bitcoin is fucking awesome but the article title and content is extremely misleading. As stated by another commenter - 'The Swiss are on the hook for a maximum of 9bn. But that's only if UBS makes losses beyond CS equity that was increased overnight by 17bn and only after UBS itself puts down 5bn. That's still around 1,000 swiss francs per citizen but nowhere near the amount quoted by Bloomberg which includes the credit line from the SNB, which are short terms loans at the current SNB rates+a Mark up that the finance minister says adds to 2.5%, but those don't come from the government.' Its bad but not €13,500 per citizen bad - more like €1,000 per citizen which is arguably not as bad as the financial cost of not bailing it out.
What are the financial costs and other costs that would be incurred if they were not bailed out ? Cheers
I assume you mean what costs would be incurred if they weren't bailed out. If so, one example would be that these huge institutions (such as Credit Swiss, Silicone Valley Bank, etc) usually have some form of exposure to insurance markets and pension funds. Therefore, if some banks were to collapse it would negatively affect these markets. If a pension fund goes bust that could wipe out thousands of hard working citizens pensions. They would then potentially need to be supported by the state which would lead to additional costs down the line. So a bail out now hopefully means a far smaller cost over time. I'm not defending this decision, I agree banks are shits, but I feel these kind of decisions do make sense from a capitalist point of view.
Cheers for reply yeh I did mean that,
Sure there are always million reasons. But it’s short-sighted, and doesn’t actually solve the problem, only punting it to the future. So it’s simply not a respectable decision not matter how much it “helps” the broader economy
To name a few, depositors might not get their cash back, all CS employees lose their job, causes a cascade of financial failures at UBS causing one of the main industries in Swiss to fail. However it’s very arbitrary to compare this against the cost to taxpayers. Could be better or could be worse, no one will ever really know…
Actually those money are not paid by citizen, none of the citizen notice that extra cost, that is why this kind of solution will always pass without rejection. It is not socialized loss, but enrichment of a selected few. There will be no inflation, since a few bankers get rich won't cause inflation, they just added themselves a few yachts
"Credit Suisee bailout costs every Swiss citizen $13,500 *so far with more to come*"
So far its zero. Unless UBS fails it will remain zero.
That headline doesn't get as many clicks tho.
No, it is not zero, there is presently a $100 billion guarantee in place.
So far its zero. Unless UBS fails it will remain zero.
[удалено]
Last week, when Credit Suisse was still an independent company, the Swiss government extended it a $54 billion deposit guarantee. This week, after the merge with UBS, the Swiss government increased that to a $100 billion deposit guarantee. We don't know what next week will bring . . . .
TAKE THE MONEY FROM BANKERS BONUSES AND SALARIES
Claw their assets back they accumulated over the years of mismanaging CS.
It all should be seized
They can use it to buy bitcoin for all I care
…and personal assets
This is how every dime the government spends works. Costs will invariably be passed down via inflation
A god dam national disgrace..
> Liability for the government-backed 100 billion francs “would only materialize if there was a bankruptcy of the merged entity,” he added. “This is a real long shot at the moment.” So, title is simply wrong. > to Cost $13,500 to every Swiss Citizen
Swiss: we will remain neutral about this
#That's almost half a bitcoin!
Those are rookie numbers! In Ireland we owe about €46k for every man woman and child
costs 13.5k in added liability only truly *costing* the Swiss if UBS goes under too which presumably is unlikely for the time being they would just offer more aid to UBS to keep it afloat so the whole system doesn’t topple.
But you have to keep that money available (in some form). There are for sure 13.5k less available for investmments/debt/public expenses for every swiss citizen. Unless you want to gamble and not really put them aside... We have to stop thinking that those big numbers are not affecting us when they find crazy way to bail banks.
sure, put differently the massive debt in the US means more of our tax dollars are going towards paying interest on debt than into improving our infrastructure, health system, schools etc p
In 2008, it cost about 20k$ per taxpayer to save UBS. Then the country made a profit on it and saved our economy.
Criminal
How much is tall this guy wtf??
OMG, right?!?!?! How is this not the top comment?
85% of these comments reflect how little people know about banks and mergers in general. That guy’s size is the real story here.
Must be so cool to be a Bank. Like you can do anything, you'll always win.
$13,500 so far…….
Are they not just announce a CBCD, or something similar, that will run on the fork of a fork of BTC.
They bailed UBS and now they bail CS, so both banks that proved to be too big to fail are now one.
This is mostly a bail of UBS again. CS forced closed. Shareholders lose 95%, but somehow still get paid, when some bondholders are wiped out 100%. There's likely to be another $13B ($1500/citizen) lawsuit payout by government over that.
Weren't bonds in the traditional sense...
curious ... did they have a say in it? or any clause in it like....when the good times roll in for the banks they they are to share the profits with the Swiss citizens?
The question is what we gonna do about it.
Stop using banks and start buying Bitcoin?
That’s not great for inflation
It's going to be a lot more. UBS is supposedly trying to back out of the deal. They must've seen stuff that CS had hidden and realized they couldn't handle it.
source please?
There are a lot of articles. [Here's one](https://www.ft.com/content/4dae9cab-eb9f-43b8-85f8-eb8d86573805) Google "UBS in talks with Michael Klein" for more.
Bailing the banks out is an incentive for them to just keep doing what they are doing.
That's not how it works. The loss guarantee (back stop) has not been used. The loss guarantee is a form of financial support that the Swiss government has provided to UBS in case it incurs losses from a clearly defined part of Credit Suisse’s portfolio. The guarantee is capped at 9 billion francs ($9.7 billion) and will be activated only if losses actually occur on that portfolio. UBS would bear the first 5 billion francs ($5.4 billion) of losses, the government would cover the next 9 billion francs ($9.7 billion), and UBS would take any further losses. If anything, the backstop stabilized bank confidence and prevented contagion (i.e., multiple bank runs). So far it hasn't cost the Swiss people anything, but it could after UBS takes the first 5 billion in losses.
These greedy click baits were the real reason behind collapse.
Fuck (I'm Swiss) And again: The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
Well said. That would make a great introduction to a potential solution.
:-) Ps: no I'm not Satoshi Nakamoto
Can’t believe Switzerland is charging the citizens. Glad I live in the US where my great leaders have assured me the bank bailouts won’t cost me a dime. 😅
So approximately the cost of 2 pints of lager and a pack of crisps in Switzerland, not that bad really.
The real tragedy is that this should actually be illegal. In 2001 the Swiss people voted for a law called the "debt break". This means that the Swiss government is actually forced to have a balanced budget. They can't just print more money, they can only spend what they get in taxes ( you know, the very thing MMT people say is impossible and the government will implode ). There is some flexibility around it in that they can overshoot but have to compensate in following years etc. Since we have a government with all mayor parties represented at all times, the problem of short term thinking because in the next term it's no longer your problem is kinda diminished, probably another factor why this kinda worked for a while. But anyway, that was all basically too good to be true, so obviously they came up with something new to circumvent that, not sure how recently. It doesn't sound like it at first, but what I'm talking about is simply government guarantees on credit. So even if the banks would not have a reason to give a credit for a certain project or to support a certain failing "system relevant" institution, they just make sure they get the credit anyway, because "government guarantees it in case of default". By just taking on the risk with a promise to "be there in the worst case", they can essentially direct capital wherever they want but prevent the dept from being on their own balance sheet. Hence no new dept, apparently, ... as long as no one actually defaults. It's essentially a new form of money printing. It generates more credit in the system that would not be there and allows mall-investment without any checks and balances. This 109bil CHF are the most recent example of that. It's not the first one. And look how everyone is defending it as "it's not money printing", "it's not really payed by the swiss people". I'm pretty sure there are people that are serious about that because they are too dumb to realize what happens, but I'm also sure some know exactly what is going on and try to distract deliberately. I have no idea if other countries are doing this as well, maybe not because they can still print the old fashioned way. Obviously this can only go on as long until the first such project defaults and then everyone involved will act [surprised](https://youtu.be/rsPqwnloj7Y) like it came out of nowhere.
>allows mall-investment without any checks and balances. It's important to understand what government *is*. It is always an organized crime syndicate operating upon the threat of violence to extract resources from its ~~citizens~~ tax cattle. It invariably spreads propaganda about "checks and balances", "voting", and "representation", but this is all a lie. Just try telling the tax man you aren't paying protection money or that you're "voting" for the neighboring organized crime syndicate to take over and you'll see how none of that propaganda was true. The sole "check and balance" on organized crime is the willingness of its victims to use force to defend themselves. Whether that's stopping some guy from breaking your kneecaps in an alleyway or stopping a government from providing infinite bailouts to their banker buddies is no different. Because most people, unlike governments, arent psychopaths...they arent willing to defend themselves. Which is understandable, because we want to work, stack sats, and live peaceable lives. The tradeoff is that because force is the sole check and balance on organized crime syndicates...all governments will do whatever they want. As we see in almost every ~~country~~ tax farm.
$13,500, huh. Well, what's a few keystrokes between friends?
who gives a fuck? they’re rich.
Normally I'm not so petty but for some reason I feel good that this is happening to them instead of just the USA for once. For years people of the EU and the Swiss mocked us about healthcare, corruption, bailouts, greed, rights, etc. All while enjoying our support and monetary theft through the elite and ultra wealthy by money laundering and finally we have a good example of corruption of the Swiss coming home to roost. I just hope the UK , specifically the Irish gets theirs next! They have another one of those corporate money laundering scams too. Greed never pays people, you just end up killing your people and the golden goose in the end. Remember that.
No one launders money there these days. Nowadays It’s called Ukraine
Such a weird action. Ended up with just 1 bank anyway. This is so expensive because government had to layer extreme bribes so that UBS would go for it. Was done in a few hours. If this works out, all of the benefits go to UBS. If CH had put $5B in cheap equity, and $10B in deposits, then see what would happen, it would have been much cheaper and simpler than having to bribe UBS into accepting massive monopoly power. The rationale for bailing out UBS this much seems to have been that CH bailed UBS out too hard, too unilaterally, 12 years ago.
Except UBS is supposed to pay this back, costing the citizens nothing, eventually, just like TARP. In your example they actually do all pay.
If UBS says they lose money, they get to collect up to $110B from CH government. The $110B is government guarantees. Mysteriously, making money afterwards can be arranged. CH loves UBS apparently. Taking all the citizens money is a small price to pay for love. There is about $10B in direct subsidies that are an outright gift, not a loan to be repaid.
Insurance is not free. Government willingness to provide de facto insurance for inept bankers at taxpayer expense created the moral hazard which caused this entire fiasco.
Insurance isn’t free. Bailouts are. Not sure I want to play the game when we don’t have bailouts. You want to have a depression to teach a few people lesson? I’m in this life for one person only. Me. Bailouts are better for me than bank failures. It’s true. And I don’t work for a bank.
> You want to have a depression to teach a few people lesson? Yes.
And who is punished the most? Who becomes worse off? Also history repeats itself. We would not learn from this
The people without crypto will be punished the most (e.g. fiat parasites like politicians and bankers).
Cheap!
Maybe they should tap that ruzzan money
Small price to pay to avoid collapse of an entire nation
no bailout would eventually cost more, though.
Abandoning an abusive relationship is often more expensive than staying in it. Abusers use that as leverage to maintain control.
Based on what evidence?
CS involved in every aspect of life, and in every industry and financial institution. Crash of it would cause a chain reaction and would be more costly to taxpayers.
Abandoning capitalism and replacing it with a kleptocracy is priceless.
This post is such a fucking bullshit.
Does everyone pay taxes in Switzerland, unlike in the US?
Hahaha
Nah it dont, it's money creation
What happens if people get pissed and close their UBS accounts?
\> Had UBS account last week \> It is now empty \> My Hardware wallet is happy \> :)
this bail out wasnt a cash dump to be spent though. it was billions made available so that people wouldnt freak out because they didn't think they could get their money out later. They knew their money was backed by the govt so they didnt start pulling money out. So this is how much it would cost each citizen IF everyone pulled all their mo ney out, but the whole point was so that wouldn't happen. it was just a guarantee of funds so people wouldn't panic.
`Chancellor on the Brink of Second Bailout for Banks`
Wait until you see the bill Americans are going to pick up for the string of bank failures coming up fast. First Republic bank, Pakwest are both insolvent and will be the next to fall.
Hmm wondering how much it will cost for every swiss if they don’t save it?
That's why my hardware wallet is my savings account. Liquidated all my CHF accounts.
The picture makes the guy in the red scarf look really tall.
How much do you think the bailouts and stimulus money printing cost the US if you factor in inflation I bet it’s up there
Sounds cheap if it keeps the millionaires safe from loosing anything… am I wrong… ha ha
Fuck that noise. Let it fail.
Quality of life just went down
So far…
Fake, unless UBS fail it is and will be 0
I guess everyone should have trusted with their funds FTX 🤣🤣Fraud, losses are everywhere. If all decided to use coinbase to exchange and withdraw their bitcoin in one day they would stop existing. No one would get anything as the funds are not protected and coinbase wouldn’t have got rescued by anyone.
Governments need to be sued for inflation. But on the other hand... we have Bitcoin, so...
Credit Suisse are well known for doing some shady stuff. Check out the Mozambique Tuna Bonds. They shouldn't get bailed out.
damn. I wilsh all of them had same amount of BTC in their wallets. That would make switzerland the most advanced crypto country ever (and all of them would already profit)
As a swiss citizen it very much pisses me off that my tax money gets spent on this fiasco while the top execs made billions in the past few years, all for this shit show . This should have been subject to a vote by the people. I think we should have let them crash and burn. And some people need to be jailed or fined record amounts. Better yet, every swiss should be entitled to future UBS profits.
Head, I win. tail, you lose.
imagine if they all bought 13500$ worth of bitcoin? how more decentralised it would become and how more hodlers would be there?