Hey guys, it's Sasha UBS Just posted the biggest ever quarterly profit for any Bank on the planet ever earning 29 billion dollars. And of course, on March 19th one quarter ago UBS just happened to acquire Credit Suisse when UBS agreed to bike race who is the Swiss Government passed emergency laws literally overnight to enable the transaction to take place. They also immediately announced that because Credit Suisse is so horribly insolvent, all bondholders of 81 bonds immediately lost a hundred percent of their Investments. The total amount that Credit Suisse owed in 81 bonds that were written off with no scrutiny with no due process with no analysis was 17 billion dollars.

So At the start of the quarter, UBS Got to write off 17 billion dollars that they would otherwise have had to pay out because there was absolutely no way that they could possibly afford to pay their money to the bondholders. And just three months later, they announced a quarterly profit of 29 billion dollars, which was more than double the previous record set by JP Morgan in 2021. The story originally was that there was just not enough money to pay those bondholders. So the Swiss government just they had no choice but to tell everyone who had one of those bonds to off.

and of course, absolutely nobody. Nobody could have seen this one coming. Credit Suisse Is a publicly traded company. It has shareholders.

So how the does a public company that has shareholders just get sold at a 60 discount over the weekend with hundreds of billions of dollars in extra perks being given to this other company Because you know usually when that happens when a company is being sold, the shareholders of the company, the shareholders of the bank get to vote. You know, would you like to go and lose 60 of your investment by being sold to UBS Or is there maybe a better way? Okay, maybe some random guy on YouTube saw it coming, but mass media were busy reporting that UBS is doing this deal under duress. They're getting a really bad deal. They would much prefer not to do this deal.

There was evidently a giant pile of horseshit smothered all over this because we have just seen the biggest orchestrated theft of money by a bank in history. Out of the 29 billion dollars worth of profit in the last quarter, 27.9 billion came directly from the acquisition of Credit Suisse from unraveling assets and 1.1 billion came from Ubs's old banking business. So this acquisition that was really bad for UBS earned UBS a profit equivalent to roughly six years worth of profits and about 25 quarters worth. Before they made this acquisition.

If UBS paid out every single 81 Bond holder in full, they would have still posted a 12 billion dollar profit, which would always be a world record. anyway. and remember that UBS paid 3.8 billion dollars, three and a half billion francs to acquire Credit Suisse it was basically given to the them for free. I said at the time that this valuation is a grotesque.

It is ridiculous. This is an absolute pistake. The shareholders were robbed in plain Daylight by the Swiss government because they got nowhere near the fair value for the share not even remotely close. Remember UBS paid that 3.8 billion dollars for the whole bank and then just three months later looked at their acquisition, looked at what they just bought, and accidentally found out that they magic 28 billion dollars just out of thin air.

Wow! and remember how the Swiss government said that it was so bad that they had to offer financial help to UBS in order for them to do this deal. It was pacing the obvious at the time that this is complete, you can go and watch my previous video where I say as much. the Swiss government gave UBS a 10 billion dollar guarantee on any credit losses that they were going to experience as a result of the Takeover The first 10 billion was covered by the government and this was National Bank then gave UBS another 100 billion dollars worth of quality via liquidity line basically free cash flow to help through this very painful and very difficult time. As UBS announced their earnings, they said that they will now not need to use the government's 10 billion loss guarantee or the 100 billion dollar liquidity line.

Apparently just three months later, it turns out nobody could have seen this one coming. It just turns out that after all, when they bought Credit Suisse basically for free, the bank was actually worth more than nothing. I Know that nobody trusted the source banking system much before. it's all murky, obscure and Shady but what the actual is going on here? It was obvious when this acquisition was true that it is a scam.

Because no due diligence was carried out. it was impossible to carry it out in one day, which is how long this whole thing took. It turns out that if maybe the Swiss government didn't intentionally Rush this deal to make it happen in one day, then maybe somebody would actually look at the numbers, maybe do some actual analysis and realize that the valuation is out not by a little bit, but by an order of magnitude despite Credit Suisse being a steaming pile of garbage at the same time. UBS just made 10 times as much money in profit in the first quarter after the acquisition as they spend on the purchase.

which shows that the valuation was at Pitt State Global while Credit Suisse bondholders and credits with shareholders got completely UBS stock is at 46. Since this acquisition, that reminder was really bad for them before. Credit Suisse was basically forced into bankruptcy and the acquisition. by UBS they had a shareholder Equity of 45 billion Swiss Francs about 51 billion dollars.

Although they weren't performing very well, their net asset value was increasing at the time up by 1.2 billion Francs In the 12 months to Q4. So Credit Suisse had 51 billion dollars worth of equity, give or take. UBS paid 3.4 billion francs for the bank and the result is that they just posted a good will of 29 billion dollars. If you had those two together, you get 32 billion dollars.

So about 19 billion short of that 51 billion 19 billion that just mysteriously disappeared. Which is funny because that just happens to be extremely close to the 17 billion dollars that was written off in those 81 bonds. Plus, you know, a couple of billion, but what's a couple of billion between friends? eh? Some people might point out that Credit Suisse was in trouble already. It was about to go bankrupt, so the price reflected the risk the UBS was taking on.

and the Swiss government and financial regulator Finma are bound by a fiducial duty by illegal Duty too. Well, you know, um, not commit really obvious fraud. But for whatever reason, the entire deal was forced to be struck over a weekend. Um, the bank was in trouble for several months beforehand.

There was plenty of time for somebody to do something. It was announced at the end of the weekend on a Sunday evening. No alternative bids were considered. Absolutely no other options were thought through.

There was no consideration whether perhaps any other bank, maybe outside Switzerland or any other investors would be up for paying more than seven percent of the book value which you know would be maybe Fair There was absolutely no consideration as to whether you know the shareholders. the owners of the bank could possibly have any say on whether this sale was fair. The option of nationalizing Credit Suisse was never considered, even though the government was happily taking on all of the risk associated with UBS buying it now. Exactly zero due diligence done.

and it was intentional because everyone who was involved in this deal is corrupt and is now taking a slice of the most obscene the bank profit the world has ever seen. UPS took on no risk at all when they bought Credit Suisse And the truth is, they knew exactly what they were doing. They knew they were being given free money by the government. But above and beyond that, the Swiss government gave them free liquidity and guaranteed another 10 billion with of losses.

That's a pretty nutty deal. When Credit Suisse only had 264 billion dollars worth of loans, most of which were very low risk, the government guaranteed a total loss rate of 4 which pretty much eliminated any credit risk for UBS on the entire portfolio that they were buying. 81 bondholders are currently suing the Swiss gangsters sorry, sorry, I think I misspoke this was government for stealing their money. Their argument is that at the time when bonds were written down to zero, the assumptions made by the Swiss government over the unit.

the three seconds that they spent thinking about it. those assumptions were wrong and if the right assumptions were used, the bond devaluation would not have happened and emergency laws would not have had to be in passed in order for the shareholders to not be able to vote on it. You know to them all over so that UBS could go and post a new record. A new world record Profit double the previous one.

We can now see that just three months later they are. Of course, the people suing are completely right it their money was stolen and it was given to the bankers for no apparent reason whatsoever. But the problem is that they are suing in the Swiss government who orchestrated this whole thing in Swiss court. So I really wouldn't hold my breath if I was a criter Swiss 81 bondholder.

Those same chords didn't seem to have any issue with the way the acquisition was forced through. They didn't seem to have any issue with emergency laws being passed with absolutely no debate. doesn't seem to have any issue with the owners of a business not having a say in their business being sold. They didn't seem to care that it took less time to push the deal through than it would actually take a person to read the legal merger agreement.

The interesting question now is whether foreign governments will now designate this deal as grotesque State help for UBS which is essentially exactly what it is, because if that happens, UBS might very quickly find out that business in the US and business in the EU is going to be a lot harder. Where you know, rules on state help are pretty strict and here's the thing. if this was government let Credit Suisse collapse. That would definitely be worse.

There is no argument here. that's not the point I'm making the issue is that the way that they solved this problem reeks of corruption, smells really bad of backroom deals, and of greed. The system is rotten, and this is not confined to Switzerland. No.

Bank in the world can sustain a full-on bank Runway 40 or 50 of the depositors just turn up to take their cash. Something we saw happen with U.S Banks and the U.S authorities seem to just watch from the sidelines at Silicon Valley Bank First Republic Silvergate and Signature Banks all collapsed one after another. The regulator did not seem to care before it all went down that some of these Banks were incompetently managed. Being very heavily dependent on crypto, The Federal Reserve also didn't seem to care that its own interest rate increases went beyond any stress testing that they themselves did on U.S Banks forcing this whole problem to happen.

Bonds that those Banks held on their balance sheet on low rates lost value because nobody wants to go and buy a bond paying low yields when you can go by shining new ones that pay 10 times as much. So, obviously all of the stuff that they acquired before race starting going up Suddenly wasn't worth as much as when they first bought it. So the bank suddenly became illiquid just because of the Fed rate hikes and no other reason. And If the Fed did not think that bit through before it went.

South If they did not consider, you know if they forgot to think about what would happen to Big U.S Banks when interest rates went up at the fastest rate in history, including the spring and summer when there was absolutely no justification for more rate hikes. What else did they forget to take account of? What else did they just accidentally forget to think about? You know, did anyone at the FED consider the impact on corporate real estate debt? Did anyone in the FED consider the impact on unsecured retail debt? Did anyone at the FED consider what would happen if a wage price spiral started as regular people struggled to pay their bills? Well, I Guess not because those things are not as important as lining your pockets through dirty backroom deals.