Hey, this is Tom and we got some breaking news: UBS is now confirmed to buy Credit Suisse The deal is happening 3.2 billion dollars and according to reports, they're going to finalize everything to get this deal done and closed. Buy breakfast on Monday which is pretty insane given the fact that these deals sort of take like a year to carry out normal time, but these are obviously not normal times in this video. Everything you need to know about this deal, how it's going to be structured, how it's going to work out, what's going to happen to the shareholders, what's the potential of a contagion in Europe and potentially in the banking industry in the US Everything you need to know. But first of all, don't click nothing, Don't smash nothing and don't buy nothing.

And now let's get started. So three days ago I posted a video saying that credit Twist will be sold to UBS. Despite the reluctance of the latter to take this deal, it will be forced upon UBS by the Swiss government by making this deal super sweet and impossible to refuse. kind of a make him an offer they can refuse Vinnie sort of thing.

So basically it's exactly what happened. So it's not like I'm a genius. There's not a lot of options out here. I Mean the bank was going on there and it was either going to be sold to Deutsche Bank which had interest, but the Swiss will never sell it to the Germans or they have to nationalize this and that they don't want to do so.

The only option is UBS by making this deal impossible to refuse. So the current market cap of Credit Suisse is about seven to eight billion dollars. Credit Twist is being sold to UBS for 3.2 billion. You do the math, but it's pretty much less than half price.

On top of that, the Swiss government is going to make sure that up to nine billion dollars of BS and that's that Credit Twist has gotten themselves into will be born and recouped and actually taken care of by the Swiss government. So up to 9 billion dollars of stupid mistakes made their credit to us is now the government's problems and not Ubs's thing to worry about. On top of that, the government is extending a hundred billion dollars loan to Credit Suisse under the management of UBS to sort their act together. I Think this deal is impossible to refuse for UBS and that's why it's actually happening.

On top of that, the Swiss government is actually circumventing the whole shareholder approval democracy, free market thing and they're basically overriding the shareholders. Nobody's asking the shareholders of Credit Suisse Nothing. This deal is happening and it's happening fast faster than the heart attack. In fact, I've never seen a merger happen this fast in my life.

I Mean this usually takes 6 to 12 months in a normal time. But then again, as I said, these are not normal times. And in case you're wondering, what's going to happen to the shareholders of Credit Suisse Well, they're getting a haircut for every 22 shares of Credit Suisse They're getting one share of UBS which is about half of the financial value that they held on the eve of this deal, they are getting a massive massive shortcut. But on the other hand, if you chose to invest your money in a company that got involved in tax evasions, money laundering, corporate Espionage archaicos Capital Etc et cetera et cetera.

I mean what were you thinking I mean this was bound to happen Now, the more important stuff that happened over the course of this deal actually materializing is that the Swiss Finance Minister held the press conference with the Chairman of Credit Suisse in which they all basically blew smoke up of everybody's ass. So the Swiss Finance Minister explained how this is not a bailout. Of course she called it a financial solution which I found very, very funny. Yes, it is a financial solution which is called a bailout.

You guys just spelled them out. You extended a hundred billion dollars of credit and nine billion dollars of guarantees and gave it to them at Half Price without asking the shareholders that is available. Ladies and gentlemen. Also, they admit that Credit Suisse was on the brink of collapse and bankruptcy, which we kind of knew, but that was never confirmed until now now.

Alex Lehman which is the Chairman of Credit Suisse funny name by the way, given what was going on right now. So Alex Lehman I'm sure there's no connection to the Lehman Brothers, but Alex Lehman The Chairman of Credit Swiss was also in that press conference explaining how this whole thing happened because of the U.S banking collapse. So basically he was saying that the collapse of Silicon Valley Bank collapsed credit twists and how the Americans are at fault of this, etc etc. which is probably one of the most laughable arguments I've heard in my lifetime.

Because look, you're ignoring a few important critical facts, if that's what you want to argue. Number one: Credit: Swiss lost 38 of their deposits 38 of their deposits in the last three months of 2022, long before the U.S Banking Crisis. Number two: they lost seven billion dollars in 2022, which is the most they've lost in the year and actually the entire profits they had in the previous decade. And they managed to lose five or five point five billion dollars in the Archangos capital.

Scandal Basically, where everybody find out that they had no risk, no idea what they were doing with the money, and they just had PWC their own auditor file an adverse opinion on their own financials. So I Don't think none of this has to do with the U.S banking collapse because everything I just pointed out happened way before the U.S banking collapsed. So I find that argument a little bit laughable, but what do you expect from the chairman of Credit Suisse I mean not the best management. Now let's talk about the risk of contagion.

Is this a risk of contingent for the U.S Banking Sector For the global banking sector, let's talk about it. So I guess the short answer is no and I Want to show you a little bit Why look the top three banks with the most amount of uninsured deposits in the United States Before the collapse, they were Silicon Valley Bank Signature Bank First Republic All of them de facto are bankrupt including First Republic that got bailout, but that's a whole different story. Now on the flip side of that, the top three bank with the least diverse business lines are Silvergate Silicon Valley Bank and Signature Bank. Now you get where I'm going with this.

So as you can see, these four Banks Silicon Valley Bank Silvergate, Signature Bank and First Republic are very unique cases that all got destroyed including First Republic Now if you ask anybody in the banking industry, what is the stinkiest, worst performing Bank out of all the globally important Systemic Banks out there, and that's actually a definition Well Everybody's going to say in the past five years Credit Swiss In the past two years credit twist. In the past year, Credit Swiss Credit Swiss was substantially effectively the least performing the worst performing globally important Systemic Bank in the world for years. I'm gonna go as far as saying in the past 20 years, So to see that collapse, it's just kind of finally you get finally this thing collapsed. How they stayed in business for so long with all the scrubs they had.

Nobody knows. But finally, it's over. So as far as a global contagion banking collapse, no, you will see consolidation. You will see mergers smaller Banks weaker Banks definitely.

But as far as the global collapse of the banking system, no, that's not happening. And I actually want to say I Was kind of surprised by the speed at which both the U.S regulators and the Swiss Regulators moved on. This both swept in on the weekend and sorted that stuff out. Not an easy thing to do, especially if you know their history.

These are not fast moving organizations. So I think that contributed to the fact that everything kind of played itself out. I Think now where the final stretch we're getting out of it, ready to move on to the actual problem which is inflation. And if you're still here at this point in the video, well, that means you're an OG on the channel and that means I Want to talk to you I Want you to check out stock MVP In case you haven't yet, a lot of you have, but for those of you who are kind of on the fence, look, you can try it out for a whole week for free.

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