Deprcon warning

UBS, Credit Suisse and contagion

As we anticipated on Wednesday, Credit Suisse will be bought by UBS, as we noted on Saturday. Swiss government will participate with a loss backstop of $9 billion.

Yet, markets have not taken the news well, which is unsurprising, because the merger (or the ‘shotgun wedding’) confirms that we are in another global financial crisis (GFC 2.0). This month’s Deprcon Outlook, published next week, will be a special issue on the GFC 2.0. Our analyst has already uncovered troubling data on the state of U.S. and European banks, which we will report in the Outlook.

Here are some of the implications of the merger of UBS and Credit Suisse.